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TMI Blog2004 (12) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... er s. 143(1)(a) and in the remaining cases where assessments were completed under s. 143(3), were sought to be reopened under s. 148 of the Act. The assessees have questioned the reopening of the assessment on jurisdiction as well as disputed the additions on merits of the case. 3. The main argument of the learned counsel for the assessee is that the AO has accepted the nature and sources of the gift. According to him, the AO having decided not to subject the impugned gifts to addition under the Act, based on the material produced before him, the present proceedings is a result of mere change of opinion and there is no substantial material or evidence to support the reassessment proceedings under s. 148 of the Act. The reopening of an assessment after six years is based on certain presumptions and fishy enquiries conducted behind the back of the assessee. The AO has failed to give the alleged enquiry report which was the very basis for forming the belief under s. 148 of the IT Act. The issue of notice under s. 148 of the Act is prima facie illegal and is not warranted in the facts and circumstances of the case. According to the learned counsel, the reassessment proceedings are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessees in each of these cases have received foreign gifts from friends and relatives through regular banking channels and they have given confirmation letter, which is placed at p. 16 of the paper book. The certificate issued by the State Bank of Hyderabad confirmed the inward remittance, which is placed at pp. 29 to 31 of the paper book and capital account showing gifts received from abroad etc., which were all filed at the time of assessment, which revealed all the details of the impugned gifts, clearly show that the AO has accepted these gifts as genuine. There was no failure on the part of the assessee to disclose the material facts necessary for formation of the belief that the gifts were genuine. The Department has absolutely no material to show that those genuine gifts are bogus in nature or the assessees have introduced their own unaccounted incomes as foreign gift receipts. There are evidences to show that the gifts were genuine ones received from friends and relatives abroad and they have all confirmed the transactions and there was absolutely no material to show that these were hawala transactions and also to disbelieve the foreign gifts. 4. The learned counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the donor is wanting, the gifts cannot be accepted as genuine transactions and they are liable to be added as part of the income. Reference was made to the decision in the case of Sajan Dass Sons vs. CIT (2003) 181 CTR (Del) 581 : (2003) 264 ITR 435 (Del), in this regard. 7. We have carefully gone through the records, considered the rival submissions and also gone through the discussions in the impugned order. We shall now discuss thoroughly the facts in the case of Shri Ramesh K. Shah, which are almost identical in all the other cases. 8. Now, coming to the aspect of jurisdiction, the reasons recorded by the AO in this case, which are found at p. 18 of the assessee's paper book, are as under: During the previous year relevant to asst. yr. 1996-97, the assessee claims to have received a gift of Rs. 10,44,000 (foreign currency of 30,000 US $) from Prakash N. Shah. Consequent to s. 132(2) in the assessee's group of cases, enquiries were conducted and the Foreign Taxation Division of the Department according to which the donor is not available in the address furnished by the assessee nor he has the ability to make such gift. As the genuineness of the gift is not establishab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 143(3) of the Act. The records amply demonstrate that the assessees in all these cases have filed elaborate and sufficient details to prove the genuineness of the gifts as well as the capacity of the donors. These gifts have originated from the respective bank accounts of the donors. 11. In fact, the matter relating to gifts was examined by the Enforcement Directorate of Government of India, a copy of the report is filed before us. We find nothing in the report to indicate that the gifts were in any way irregular in nature nor they were not genuine. In fact, a reading of the said report shows that all the procedures/regulations and other formalities for receipt of the gifts have been complied with and there is nothing illegal in these gifts. The only aspect it does not indicate is about the capacity of the donor. The AO just for the purpose of making enquiries as to all these things cannot reopen a concluded assessment. For the completeness of the records, the contents of the notice issued to Shri Ramesh K. Shah, one of the assessees herein, is produced hereunder: "F. No. Enq. DC-8(1) 2002-03 Office of the Dy. CIT, Circle-8(1), Bangalore, dt. 12th Dec., 2002 To Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld have made some more enquiries and for making those enquiries, the assessment cannot be reopened. In other words, the Department cannot seem to be improving its case. The assessee has given all particulars to the AO including the address, details of the remittances and reasonable material to show the capacity of the donors to make the alleged gift. 13. In the background of these things, the Department should have some material to show that the gifts themselves were not genuine or there was lack of capacity on the part of the donor, which, as already discussed, could not be the subject-matter of dispute when the AO issued the notice as extracted above in the earlier paragraph. 14. In the facts and circumstances of the case, we are of the opinion that reopening of assessment is bad in law and is a result of change of opinion. We, therefore, vacate the impugned orders. 15. Coming to the merits of the case, in each of the cases, the assessee has filed confirmation letter and has received the gifts in the normal banking channels. Enquiries were conducted by the Enforcement Directorate under the Foreign Exchange Regulations Act, which has given a report that there is nothing i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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