TMI Blog2014 (10) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... uman conduct and the AO had rightly held the gifts to be non-genuine and taxed as income – thus, the order of the CIT(A) is set aside – Decided in favour of revenue. - ITA No. 976/JP/2011 - - - Dated:- 26-9-2014 - Shri R. P. Tolani And Shri T. R. Meena,JJ. For the Petitioner : Shri Rajesh Ojha For the Respondent : Shri Manish Agarwal ORDER Per R. P. Tolani, JM This is an appeal filed by the Revenue against the order of the ld. CIT(A)- II, Jaipur dated 17-08-2011 for the assessment year 2001-02 wherein the solitary ground raised by the Revenue. On the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in deleting the addition of ₹ 9,25,000/- made by the AO on account of unexplained gift without appreciating the facts of the case and deficiencies pointed out by the AO. 2.1 The brief facts of the case are that the assessee is a proprietress of business dealing in cotton cloth manufacturing and manufacture of Refined Lubricating Oil. During the course of assessment proceedings, various additions have been made including the impugned gifts. Since we are concerned with the issue of gifts only, therefore, the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily by following observations. E ..(A) Shri Vinod Garg and Shri Pramod Garg (Donors) both gave the alleged gifts as per the wish of their mother. As such the gifts made by these two donors cannot be said to have been voluntarily. (B) Smt. Varsha Badaya stated to make this gift to assessee because the assessee required the money and she being assessee's niece helped her in difficult times. So it can be very well concluded that this gift was also not made voluntarily and was made as per assessee's wish. (C) Smt. Babita Ahir stated that she made the alleged gifts with the intentions of getting bigger reciprocal gift from assessee. This shows that assessee must have lured her for making the alleged gift. Thus Shri Vinod Garg and Shri Pramod Garg made the gifts not by own volition but as per the wish of their mother in lieu of the services rendered by the assessee to their mother. Nature of services has nowhere specified. The AO was of the alternate view that services rendered by the assessee to their mother fell under the inclusive meaning of Money s worth . Thus there was quid pro quo. 2.4 Smt. Varsha Badaya had also made the impugned gift in consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income to support her family. It was quite incongruous that when her family is entirely dependent on her interest income whey they gifted away such a huge amount of her capital to the assessee which was against normal human conduct. The assessee and Smt. Babita Ahir both claimed to know each other very well but Smt. Babita Ahir could not give the details of the residential address of the assessee donee. Further more, she stated that the assessee is a housewife where the fact of the matter and the statement of the assessee is to the effect that she is a business-woman and proprietress of the concerns. This demonstrates that there was total contradiction in the statements between the donor and the donee and their claims about the mutual relationships were found to be nonexistent. 2.10 The donors had limited income and the interest income was their major source which they parted way in favour a person who had practically no discernable relationship and donor was distinctly richer than the donees. All these observations and other details are cited by the AO in his body of the order at great length. The AO concluded his findings and added the amount by following observations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had discharged her onus. The AO s various observations are found by the ld. CIT(A) insufficient and it was held that the AO had no basis to conclude that the amount received by way of loan represented the unaccounted income of the assessee and it did not belong to the donor. (iv) Further reliance was placed on Hon'ble Jurisdictional High Court decision in the case CIT vs. Padam Singh Chouhan, 315 ITR 433 for the proposition that blood relation was not required between the donor and the donee to establish the genuineness of the gifts. The gifts were made out of natural love and affection which by itself was valid enough consideration to establish the genuineness of the gifts. The ld. CIT(A) deleted the impugned addition by following conclusion. Respectfully following to above decision and facts of the present case, I direct the AO to delete the addition of ₹ 9,25,000/- made on account of unexplained gifts since the appellant had submitted sufficient documentary evidences to discharge the onus that lay on her. The addition made by the AO on account of hypothetical observation could not be sustained. Accordingly this ground of appeal in allowed. 2.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness but they failed to comply with the same. Thus the promised evidence of creditworthiness in real terms remains missing from the record. This fact has been conveniently ignored by the ld. CIT(A). 2.14 The ld. DR further relied on the Hon'ble Supreme Court judgement in the case of CIT vs. P. Mohankala, 291 ITR 278 for the proposition that the burden is on the assessee to prove that the gifts received by the it are genuine and conform to the normal human conduct and attending circumstances and if that burden is not discharged then the gift can be added to the income of the assessee. The Hon'ble Supreme Court has also relied on the case of Sumit Dayal vs. CIT (supra) wherein the relevant finding of Hon'ble Supreme Court in the backdrop of the case of Sumit Dayal vs. CIT (supra) is as under:- The assessees did not take the plea that even if the explanation is not acceptable the material and attending circumstances available on record do not justify the sum found credited in the books to be treated as a receipt of an income nature. The burden in this regard was on the assessees. No such attempt has been made before any authority. All the decisions cited and referr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above facts and circumstances demonstrate that the assessee has failed to discharge her onus to demonstrate the gifts to be genuine as held by the Hon'ble Apex Court in the case of CIT vs. P. Mohankala (supra). 2.16 The ld. CIT(A) has allowed himself to be carried away by specious arguments of the assessee that a paper trail was reliable and the gifts were through banking transactions. The Hon'ble Punjab Haryana High Court in the case of Subhash Chand Verma vs. CIT (supra) has clearly held that mere identification of the donors and receipt of the gift through banking channel with paper trail is not sufficient to satisfy the requirements of a genuine gift. Thus looking at the assessee's case in the backdrop of Hon'ble Supreme Judgement in the case of CIT vs. P. Mohankala (supra) and the Hon'ble Punjab Haryana High Court in the case of Subhash Chand Verma vs. CIT (supra), the facts of the case fall within the parameters laid down by these authorities. Ld. CIT(A) by summary observation has held the AO s inquiries and observations as wrong by labeling them to be overemphasizing, irrelevant, immaterial, without recording any cogent reasons. Ld. DR Thus co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee counsel by any effective arguments except reiterating the arguments and written submission on same lines. 2.19 Apropos Hon'ble Gujarat High Court judgment in the case of CIT vs. Bhanwar Lal Sharma (supra), ld. DR contends that in this case, it has been only held that there was no perversity in the ITAT order. Therefore, no question of law arose by following observations. 14. We are conscious that various aspects discussed by both the Assessing Officer and CIT (A) were causing concern to those authorities. Gifts to assessee by 24 different unrelated persons, residing at different places in Mumbai on the same day, with the draft of huge sum from the same bank and deposit within a span of 2 to 3 days would raise the eyebrows. Their non-reply of letter u/s 133(6) and nonappearance of assessee personally may further strengthen such suspicion coupled with difference in economic strata of assessee and that of these persons. Yet, these questions do not cross the realm of suspicion to enter the sphere of proof, let alone the arena of convincing evidence.. Tribunal could with the aid of cogent reasonings convince us why such material proof was sufficient to accept the versi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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