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TMI Blog2019 (2) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... on 56 of the Act has been considered on a wrong notion. Instead of relative as provided by the statute “blood relative” has been considered by the Learned AO and as a result whereof addition was made which is absolutely erroneous as rightly pointed out by the Learned CIT(A) as it reflects from the order impugned. Thus, in the absence of any infirmity in the order passed by the Learned CIT(A) we decline to interfere with the same. Hence, the Revenue’s appeal is dismissed. - Income Tax (Search & Seizer) Appeal Nos.128 & 129/Ahd/2016 - - - Dated:- 24-1-2019 - Shri Pramod Kumar, Vice President And Ms. Madhumita Roy, Judicial Member For the Appellant : Shri R. C. Danday, CIT-D.R. For the Respondent : Shri M. K. Patel, A.R. ORDER PER Ms. MADHUMITA ROY - JM: These two instant appeals filed by the revenue are against the order dated 28.01.2016 passed by the Commissioner of Income Tax (Appeals) - 12, Ahmedabad [Ld.CIT(A) in short] for Assessment Year (AY) 2008-09 2009-10 arising out of the order u/s.153A r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 27.02.2015 passed by the DCIT Central Circle -2, Baroda with the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 23.11.2006 6,00,00,000 848692 2. 16.10.2007 5,00,00,000 973868 3. 06.05.2008 5,00,00,000 107949 The said gift amounts were received from one Shri Narotam Sekhsariya. A show-cause was issued directing the assessee to prove the identity, creditworthiness and genuineness of the above transaction mentioned as gift. In reply, the assessee categorically mentioned that the said Shri Narotam Sekhsariya was the brother-in-law of the assessee being the founder of Ambuja Cements Ltd. and remained its Managing Director till recently. Shri Narotam Sekhsariya was the 40th richest Indian according to Forbes.com. Details of his net worth and the credential were also mentioned in the said reply dated 23.01.2015 as filed before the Assessing Officer. However, the assessee was further directed by the Learned AO to produce the donor before him to prove the genuineness of the transaction of 16 crores along with evidence of his identity, creditworthiness and genuineness of transaction. The assessee thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also been doubted by him since the assessee was adopted son of Shri Narayan Prasad Nopani and Chandradevi Nopani. He thus relied upon the order passed by the Learned AO. 4. The Learned Counsel appearing for the assessee submitted before us that though the assessee is an adopted child under the Hindu Law, mainly Hindu Adoption and Maintenance Act, 1956 the assessee is having same status as of the own child of a spouse in this case, Mr. and Mrs. Nopani. Apart from that, the genuineness and creditworthiness of the donor since categorically explained by the assessee before the authorities below so as to prove the genuineness of the transaction, the question of making addition does arise. He, therefore, rely upon the order passed by the Learned CIT(A). 5. We have heard the respective parties, perused the relevant materials available on record. We find that the Learned AO came to a finding that there was no specific reason to give the said amount of ₹ 16 crores in total to the assessee by the said Shri Narotam Sekhsariya. While making an addition to the tune of ₹ 5,00,00,000/- for the year under consideration the Learned AO inter alia observed as follows: .d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding genuineness of this transaction. i. Fact narrated in the para g above has also been supported by the page no. 17, 18, 20 of Annexure BI-1 of seized documents. In this document exactly same has been submitted by the assessee in the office of Tehsildar, Jhunjhunu, Rajasthan. 5.6 From all the above proceedings, discussion, facts and circumstances there are compelling reasons for not considering the alleged gift transaction as a genuine transaction between relatives as prescribed in section 56 of Income Tax Act, 1961. As the exemption from considering the transaction as nontaxable is not proved the whole of the amount of ₹ 5,00,00,000/- is taxable income of assessee as Income From Other Sources. Accordingly, addition of ₹ 5,00,00,000/- is made under the head Income From Other Sources u/s 56 of the Act and added back to the total income of the assessee. Penalty proceedings u/s 271(l)(c) of the Act are being initiated separately for concealment of income. 6. In appeal, the Learned CIT(A) deleted such addition made by the Learned AO with the following observation: 12. In view of the above, I further recognize the fact that Nalini and appellant both be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts and confirmation of the donor establish doubtlessly and satisfactorily the identity and capacity of the donor and the genuineness of the transaction. The appellant clearly and fully discharged the onus. Though thereafter the AO asks the appellant to produce the donor, the appellant only ensures attendance by donor's AR with further confirmation, assessment orders and bank-statement of the donor. The AO has thereafter not made any enquiry nor brought any adverse material on record and not provided any further opportunity to explain any further aspect to the appellant, and still holds against the appellant without discharging her onus and also without clarifying how submission of the appellant is not acceptable. Moreover, vide appellant's submissions reproduced in para 7 above, each objection of the AO in the assessment order and further in remand report including the absence of gift deed has been satisfactorily met by the appellant. The observations of the AO about what gifts the donor has generally made or what happens in normal Hindu family etc are wholly irrelevant to decide the issue. Similarly, the observation of trie AO with regard to complex financial transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relative when explanation (ii) and (viii) are read, as required, together, I have perused the provisions- I firstly find, as submitted by the AR, that there is no mention of blood relative in the whole section. Receipts exceeding Rs, 50,000/- without consideration is taxable u/s 56 unless saved by proviso. Explanation defines relative , and as per clause (ii) read with clause (vii), the sister's husband is also a relative. Thus, 1 am in absolute agreement with the Ld. AR that the Ld. AO's attempt to some-how read blood relative in proviso, when plainly and clearly only relative is mentioned and is defined in proviso to s. 56, shows that the Ld, AO has misread the provisions and applied the same unreasonably. 1 am satisfied, in view of my earlier finding after quoting from Hindu Adoption and Maintenance Act, 1956, in para 12 above that the receipts from Shri Narottam ikhsaria are clearly covered by clause (a) of proviso to s. 56(2) read with explanations (ii) and (vii). Thus, it is held that the gifts of ₹ 5 crore in both the yeas received from Narottam Sekhsaria, being from a relative , i.e. brother-in-law of the appellant, is not taxable u/s 56. The gifts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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