SMT. MEERA KAPOOR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Facts:

(2.) THE present appeal under section 260A of the Income Tax Act, 1961 (hereafter called "the Act") is directed against the order dated 20.03.2008 by the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'C'. By the impugned order, ITAT upheld the addition of ' . 31 lacs made by the Assessing Officer (AO) holding that the appellant had failed to establish the creditworthiness and genuineness of the transaction of the impugned gift. As regards certain other gifts worth ' . 74,914/ - the Tribunal restored the matter back to the A.O. The ITAT upheld the validity of the notice under section 148 of the Act, thereby dismissing the cross objections filed by the appellant. The question of law urged on behalf of the assessee is regarding the correctness of the ITAT's order, upholding the addition, and also refusing to interfere with the re -opening of assessment, by the AO. The year under consideration is 1995 -96; the appellant had, during the period, received a gift worth Rs. 31 lacs from an NRI, Shri Jagjit Singh Kochar. The gift was received by way of Cheque no. 522348 dated 09.09.1994 drawn from the donor's NRE A/c No. 19912012 with the Bank of America, New Delhi. The appellant deposited the cheque in her savings bank account, and the amount was subsequently used by her for opening a fixed deposit on 03.02.1995. The appellant filed a return of income under Section 139(1) of the Act declaring the total income of ' . 2,32,130/ -. The return was processed under Section 143(1)(a) of the Act on 29.02.1996. Thereafter, the ACIT, Circle 30(1), New Delhi initiated reassessment proceedings under Section 147 and issued notice dated 28.03.2002 under Section 148 of the Act. The appellant was examined by the A.O. on 10.03.2003. During the reassessment, the A.O. doubted the creditworthiness and genuineness of the gift. The gifts received by the appellant including ' . 31 Lacs from the NRE A/c of the Donor and the domestic gifts worth ' . 74,914/ - were deemed to be her income and were added under Section 68 of the Act. The order of the AO was challenged before the Appellate Commissioner [CIT(A)]; the latter upheld the validity of the notice under Section 148 but directed that the addition of ' . 31,74,914/ - be set aside, holding that the appellant had proved the genuineness of the gifted amount. Aggrieved, the revenue appealed to the ITAT, which upheld the addition of Rs. 31 lacs made by the A.O. Further, the Tribunal upheld the validity of the notice under Section 148 and dismissed the cross appeal of the Appellant on that score, and also allowed the revenue's appeal on merits.

(3.) THE appellant relied on the judgment of the Supreme Court in CIT v. Kelvinator of India Ltd., : (2010) 2 SCC 723 wherein it was held that the Assessing Officer shall have the right to re -open assessment u/s 147 of the Act only if there is 'tangible material' to show that income has escaped assessment. The Assessing Officer shall not be allowed to arbitrarily re -open assessment. It was also urged that the notice served under section 148 of the Act is defective.