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2014 (7) TMI 509 - AT - Income TaxLevy of penalty u/s 271(1)(c) of the Act – Invocation of section 68 of the Act – Held that:- The onus to prove the credit on the parameters is on the assessee, the discharge or not so thereof in the facts and circumstances of the case is largely a matter and, consequently, subject to a finding, of fact - the assessee’s case as totally unproved - The only ‘reason’ advanced by the assessee for the gifts is that he being a young man of 28 years, on the threshold of his career as a real estate developer, was helped with these funds - True, it could be, but only from very close and near and dear ones who would completely identify themselves with the assessee and his success - Surely, a gift under these circumstances would not be made to a strangers or relative stranger or perhaps even acquaintance but only to one with whom the donor enjoys a high level of personal relationship and emotional bonding - No relationship, however, has been specified in the instant case for any donor. Even the immediate source of the funds with the donors has not been explained, except in the case of Ram Lakhan Singh, Mumbai, in which case the same, i.e., the retirement funds, in almost their totality, disprove the assessee’s case rather than establishing the creditworthiness - for the three members of the Verma family, the amount gifted, as apparent from the bank accounts furnished, are sourced from loan funds - Apart from the legal issue of whether the same would qualify as a gift, which could only be of one’s own property, i.e., over which one has absolute rights, including of disposition, as well as the proprietary issue in-as-much as the bank had advanced funds only for business purposes, it raises serious doubts qua the genuineness of the gifts, besides in no manner establishing the credit-worthiness of the donors, if not actually disproving it – the credits claimed to be gifts, as unproved on the anvil of section 68 of the Act – Decided against Assessee. Inaccurate particulars furnished – Penalty u/s 271(1)(c) of the Act – Held that:- The genuineness of the gifts, again, remain completely unproved in the absence of any personal relationship being claimed, much less proved - the credits only represent laundering of his money by the assessee, masqueraded as gifts - The statutory presumption u/s. 68 is that the receipt is of income nature - no exception is forthcoming on the basis that the income, so brought to tax, is deemed as the assessee’s income, section 68 being in fact only a rule of evidence – thus, the levy of penalty is upheld – Decided against Assessee.
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