TMI Blog2007 (11) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... t worth, which he subsequently made while submitting the remand report to CIT(A) and in which he found them to be creditworthy. Thus, in absence of any enquiry or any material about their creditworthiness, the AO was not justified in holding that the donors creditworthiness was in doubt. Genuineness of the transaction of gifts: Mere fact that the gift was made of huge amount or of valuable property in absence of any other material to doubt the genuineness of the gift, will not be sufficient to treat the gift as non-genuine. Lack of blood relationship or family relationship or absence of occasion for making gift are again not the only considerations for treating the gift as non-genuine. Although these may, at times, be relevant corroborative considerations to establish the non-genuineness of the transactions, but by itself none of such factors can be sufficient considerations for treating the gift as non-genuine. In the instant case there is no evidence on record to show that the assessee had in any way at any time financially or otherwise helped the donors to gain in any manner by misusing her position as a public servant. There is no proof that the donee made any investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion stand fully explained by the assessee in the form of gifts which are found to be genuine by us for the reasons given above. Consequently, the grounds taken by the Revenue are rejected. In the result, Revenue's appeal is dismissed. Claim of standard deduction u/s 16(1) amounting to Rs. 30,000 we are of the view that the assessee is not entitled to claim deduction under s. 16(1). We hold so because there is no relationship of employer and employee existing in the facts of the recent case. The position has also been further clarified by CBDT in Circular. The mistake of claiming this standard deduction may not be intentional or deliberate as submitted by assessee's counsel but in our opinion since it is not legally admissible, it cannot be allowed as a deduction. Keeping in view the same we uphold the finding of the CIT(A) that the assessee is not entitled to standard deduction under s. 16(1) amounting to Rs. 30,000. The assessee fails on this ground. Hence, the grounds taken by the assessee in her appeal stand rejected. Consequently, this appeal is also dismissed. In the result, both the appeals, filed by the assessee as well as the Revenue stand dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the said survey no material relating to the assessee was however found. 4.3 In the assessment order, the AO, after making reference to various gifts received by the family members of the assessee, also noted the gifts received by the assessee during the assessment year under consideration. Details of these gifts are as under: Sl. No. Donor apos;s name address Amt. Rs. Cheque No. Date Bank 1. Mr. Pankaj Jain R/o KD-5, Kavi Nagar, Ghaziabad 2,00,000 171816 7-12-2002 Andhra Bank, Navyug Market, (Ghaziabad). 2. Sh. Ajay Agarwal, R/o KF-21, Kavi Nagar, Ghaziabad. 10,00,000 921359 7-12-2002 PNB, G.T. Road Ghaziabad 3. Sh. O.P. Khadaria, R/o B 1-D, DDA Flats, SFS Gulabi Bagh, Delhi. 1,00,000 592985 15-1-2003 State Bank of India, University Branch, Delhi. Details of immovable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee then she was under legal obligation to explain the nature of such entry and that the AO is not required to specifically prove as to what was the source from which the deposit was made. He further concluded that merely establishing the identity of the creditor is not enough and that the assessee has also to prove the capacity of the creditor as well as the genuineness of the gift. He was also of the opinion that merely by filing of the confirmatory letter, the assessee cannot be said to have discharged the onus that lies upon her nor the proof of payment by account payee cheque is enough. By placing reliance on the ratio of decision in the case of CIT vs. Korlay Trading Co. Ltd. (1999) 152 CTR (Cal) 17 : (1998) 232 ITR 820 (Cal) he also observed that mere filing of the income-tax details of the creditor is not enough to prove the genuineness of the credit. The AO, on the basis of the above observations, issued a letter dt. 16th Feb., 2006 to the assessee and intimated her that he was not satisfied about the genuineness of the gift as also about the creditworthiness of the donors and, therefore, proposed to assess the (sic) to add amount of gift as her income from undiscl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ... shall be charged to income-tax as income of the assessee of that previous year. There is no doubt that the amount has been found credited in the books maintained by the assessee for her business activity and, therefore, the cash of Rs. 2,00,000 received by her will be charged to income-tax under s. 68 r/w s. 56(1) of the IT Act. So far as the receipt of the immovable properties is concerned the assessee offered an explanation and the explanation furnished by her has not been accepted by me as mentioned above and, therefore, the same will be charged to tax under s. 69 of the IT Act, the amount shown (as so-called gifts in the form of cash or in the form of immovable properties) are in fact assessee's own money generated from undisclosed sources. Therefore, additions are made under the head income from other sources (as discussed above) r/w s. 69 (investment from undisclosed sources). 4.8 Thus, the AO made addition of Rs. 2,00,000 on account of cash gift made by Shri Pankaj Jain and addition of Rs. 40,68,450 on account of gift of immovable property i.e. C-57, Inderpuri, New Delhi made by Shri Ashok Kumar Jain and addition of Rs. 22,03,850 on account of gift of immovable p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nkaj Jain was Rs. 1,36,01,314 who made gift of Rs. 2,00,000. 4.12 The learned CIT(A) has considered the entire material in great detail in the appellate order. He has narrated the grounds on which the AO has rejected the creditworthiness of the donors and the genuineness of the gift transaction. He has narrated' the submission of the assessee by making reference to the authorities on which reliance was made by the assessee for assailing the order of the AO and after considering the same, he has deleted the additions. 4.13 The learned CIT(A) has firstly, considered the common ground relating to all the three gifts and additions made on account of the same. These common points raised by the assessee before him are as under: 1. The appellant on various occasions asked the AO to supply the copies of the statements given by the donors, however the same were not supplied to the appellant in clear violations of the principles of natural justice. 2. The appellant had cited certain decisions of various Tribunals, High Courts during the course of the assessment proceedings, however, the AO without appreciating that it is obligatory to point out by good and acceptable reasonin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the gifts received by the assessee cannot be questioned on the ground of no 'occasion' and no 'relationship'. It would also be relevant to mention that the only requirements for gift are that there should be transfer, by one person to another, of any existing movable or immovable property. Further, the transfer should be voluntary, and, should be made without consideration of any money. The same should be out of natural love and affection and the donee must also accept the said gift. 4.15 Thereafter, the learned CIT(A) has framed the following issues: (1) Whether the gifts of immovable properties received by the assessee from Shri Ashok Jain and Smt. Veena Jain were genuine. (2) Whether the gift received by the assessee of Rs. 2,00,000 from Shri Pankaj Jain was genuine. 4.16 Coming to the gift relating to property No. C-57, Inderpuri, New Delhi made by Shri Ashok Kumar Jain, the learned CIT(A), after considering the documentary evidence, including the details of income-tax affairs of the donor, his bank account, his affidavit certifying the gift, his statement recorded by AO and confirmation about the giving of the gift, his relationship with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim that the property gifted was assessee's income earned from undisclosed sources. On this count also the AO has failed miserably, compelling me to infer that he has rejected the claim of the assessee without any valid reason. Sarogi Credit Corpn. vs. CIT 1975 CTR (Pat) 1 : (1976) 103 ITR 344 (Pat) Further, as regards applicability of s. 69, I am of the opinion that it is not the assessee who has made the investment. The donor has paid the stamp duty twice, the assessment of the donor has not been disturbed, the donor and the donee are both accepting the factum of the gift. Further, the gift is also evidenced by documentary evidences like gift deeds, sworn affidavits, declarations before AO etc. The donor has also given explanation for immediate source of gift. In view of the totality of facts, in my opinion the donee has discharged not only the burden but also the onus east on him. On the other side the AO has failed miserably to lead any evidence in support of his claim, forcing me to conclude that the assessment is based on conjectures and surmises. 4.17 The learned CIT{A) thereafter considered the gift of property of C-58, Inderpuri, made by Smt. Veena Jain. Af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Co. In the light of the above, the genuineness of the gift is conclusively established, inasmuch as the identity and capacity of the donor, as well as factum of gift stand established. It is also trite law that once the donee furnishes the gift deeds and affidavits of the donors, they suffice to prove the genuineness of the gift. For this view I rely on the following judicial pronouncements. CIT vs. R.S. Sibal (2004) 187 CTR (Del) 291 Murlidhar Lahorimal vs. CIT (2006) 200 CTR (Guj) 109 Nek Kumar vs. Asstt. CIT (2004) 191 CTR (Raj) 207 : (2005) 274 ITR 575 (Raj) I am also of the opinion that once the initial burden of proving the genuineness of the gift and the creditworthiness of the donor was discharged by the assessee the onus shifted on the AO to prove, if he so alleges, that it was on the contrary an investment of the assessee. For this view I rely on the following judicial pronouncement. Sreelekha Banerjee vs. CIT (1963) 49 ITR 112 (SC) CIT vs. Daya Chand Jain Vaidya (1975) 98 ITR 280 (All) Not only that, I am also of the opinion that when a particular explanation furnished by the assessee and evidence in support thereof is adduced, the onus shifts on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has also placed reliance on the various authorities in support of the written submissions. 6.2 Besides the above, at the time of hearing the learned counsel for the assessee made reference to so many other authorities to show that the assessee had discharged the burden which lay upon her to prove the genuineness of the gift. 7. We have carefully considered the facts and circumstances relating to this matter and the rival submissions. The following facts remain undisputed: (1) The assessee had, received five gifts during the year under consideration which were examined by the AO. (2) Out of these, three gifts were received in the form of cash, totalling to Rs. 13,00,000 out of which the above gifts to the tune of Rs. 11,00,000 have been accepted to be genuine by the AO. (3) The third gift which was rejected by the AO, was received by the assessee from Sri Pankaj Jain. The main features relating to this gift are as under: (a) The gift has been made through account payee cheque; (b) The donor had confirmed the gift; (c) The assessee had filed gift deed as well as the affidavit of the donor confirming the gift; (d) The donor is assessed to tax. His statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he is still capable of giving. If the donee dies before acceptance, the gift is void 7.4 Sec. 123 of the Transfer of Property Act deals with the procedure relating to transfer of the property gifted. This provision is as under: 123. For the purpose of making a gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses. For the purpose of making a gift of movable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery. Such delivery may be made in the same way as goods sold may be delivered. 7.5 In view of the above definitions, following are the essential elements of gift: (1) Donor's intention to make a gift; (2) The gift should be made voluntarily and without consideration, by the donor; (3) Delivery of actual or constructive possession; (4) Acceptance of the gift by the donee or on his behalf. 7.6 In addition to the above, gift of immovable property has to be through a registered document, and transfer of immovable property is to be effected by a registered instrument signed by or on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transfer of any property from one person to another gratuitously while donor is alive and not in expectation of death............ 7.10 On the concept of gift we consider it proper to reproduce the observations of Lord Esher, M.R. made in Cochrane (1890) 25 QBD 57, which are as under: ............actual delivery in the case of a 'gift' is more than evidence of the existence of the proposition of law which constitutes a gift, and I have come to the conclusion that it is a part of the proposition itself. It is one of the facts which constitute the proposition that a gift has been made, it is not a piece of evidence to prove the existence of the proposition; it is a necessary part of the proposition, and, as such, is one of the facts to be proved by evidence. The proposition is not that the one party has agreed or promised to give, and that the other party has agreed or promised to accept. In that case, it is not doubted but that the ownership is not changed until a subsequent actual delivery............ The giving and taking............ are not evidence to prove that there has been a gift, but facts to be proved to constitute the proposition that there has been a gif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration of love and affection otherwise the word adequate would become redundant. 7.13 In view of the above judicial pronouncement it is clear that for all intents and purposes the validity of the gift, whether of movable or immovable property, is to be examined by satisfying the conditions laid down in ss. 122 and 123 of the Transfer of Property Act. From the same it follows logically that for income-tax purpose also the validity of gifts is to be examined in the light of the above referred provisions as has also been held by the Hon'ble Allahabad High Court in the case of CIT vs. Smt. Shyamo Bibi already referred to above. 7.14 In view of the above we have to examine as to whether these legal requirements, as laid down in ss. 122 and 123 of Transfer of Property Act are satisfied in the case of gifts made to the present assessee or not. So far as the gift from Shri Pankaj Jain is concerned, the transaction was carried out through account payee cheque and reflected in the bank account of the assessee, which is as per S.B. a/c No. 9195 in Union Bank ofIndia, Moti Bagh,New Delhi. The amount of Rs. 2,00,000 is gifted by Shri Pankaj Jain s/o Shri P.C. Jain, Kavi Nagar,Ghaziab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) for the first lime, which statement has seen reproduced by the AO on pp. 19 and 20 of the assessment order Sri Jain, in reply to question Nos. 19 and 20 submitted that he has made the gift through cheques, and the cheques of gifted amount were delivered to the donee. To clinch the issue we consider it proper to reproduce questions and answers from question Nos. 22 to 28, which are as under: Q. No. 22: Please explain the source through which the gifts were made to donees? Ans: I have, made these gifts through my regular bank account, copy of which has already been furnished vide letter dt.19th Dec., 2003. Q. No. 23: What to you understand by gifts, what do you consider the main ingredients of gift? Ans: Gift is a voluntary payment made by one persons to another. According to me sweet will is the main ingredient of gift. Q. No. 24: Whether the gifts to Ms. Mayawati and her relatives were made by you voluntarily or at the behest of any other person? Ans: The gifts were made by me at my will and it includes the common conscious of my family members. Q. No. 25: Do you also take advice of your uncles and more particularly of Sh. Ashok Kumar before giving any gifts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: Gift deed For Rs. 22,03,850 Stamp duty @ 8 per cent Rs. 1,76,308 Transfer duty @ 5 per cent Rs. 1,10,192 Rs. 2,86,500 This deed of gift is made atNew Delhion16th Nov., 2002by Smt. Veena Jain w/o Sh. Ashok Jain r/o KD-5, Kavi Nagar, Ghaziabad (UP), the donor, her heirs, successors, executors, administrators, legal representatives and assigns of the one part. In favour of Ms. Mayawati, d/o Prabhu Dass alias Prabhu Dayal r/o EA-44, Inderpuri, New Delhi-110012 (hereinafter referred to as 'the donee' (which expression shall mean and include, the donee, her heirs, successors, executors, administrators, legal representatives and assigns) of the other part; In the above manner the donor became the sole and absolute owner of the entire freehold property bearing No. C-58, constructed on freehold plot No. C-58, measuring 500 sq. yds., with terrace rights, situated in the area of the village Naraina in the abadi of an approved colony, Inderpuri, New Delhi for her bona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property in any manner whatsoever shall be null and void. 5. That the donor, after the gift of the said property, shall be left with no rights, interest or lien in the said property, which shall hereinafter become the exclusive property of the donee. 6. That the donee hereby accept the gift of the said property without any condition or reservation. 9.1 The donor Smt. Veena Jain filed affidavit to confirm the gift, which is as under: Affidavit Before the Asstt. CIT, Central Circle-II,New Delhi. Reg.: Income-tax case of Ms. Mayawati,New Delhirelevant to asst. yr. 2003-04 I, Veena Jain w/o Shri Ashok Kumar Jain r/o KD-5. Kavi Nagar,Ghaziabaddeclare on oath as under: 1. That my name is Veena Jain, reside at KD-5, Kavi Nagar,Ghaziabadand am fully acquainted with the facts of the case. 2. That during the financial year 2002-03 I have gifted an immovable property bearing No. C-58, Inderpuri, New Delhi valuing Rs. 22,03,850 out of natural love and affection to Ms. Mayawati d/o Shri Prabhu Dass alias Prabhu Dayal r/o EA-44, Inderpuri, New Delhi through registered deed dt.16th Nov., 2002. 3. That Ms. Mayawati is Dharam sister of my husband Shri Ashok Kumar Jai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: Gift deed For Rs. 40,68,450 Stamp duty @ 8 per cent Rs. 3,25,477 Transfer duty @ 5 per cent Rs. 2,03,423 Rs. 5,28,900 This deed of gift is made at New Delhi on 26th Dec., 2002 by Shri Ashok Jain s/o late Shri Mithan Lal Jain r/o KD-5, Kavi Nagar, Ghaziabad (UP), hereinafter referred to as the donor (which expression shall mean and include, the donor, her heirs, successors, executors, administrators, legal representatives and assigns) of the one part. In favour of Miss Mayawati, d/o Prahhu Dass alias Prabhu Dayal r/o EA-44, Inderpuri, New Delhi-110012, hereinafter referred to as 'the donee' (which expression shall mean and include, the donee, her heirs, successors, executors, administrators, legal representatives and assigns) of the other part; And whereas Sh Ashok Jain s/o late Sh. Mithan Lal Jain r/o KD-5. Kavi Nagar, Ghaziabad (UP) (donor herein) has got full rights, clear titles and absolute authority to sell and tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., with terrace rights, situated in the area of village Naraina in the abadi of an approved colony, Inderpuri, New Delhi shall be irrevocable and none of her legal heirs, successors, nominee and administrators shall have anything to do with the said property and any object raised by anyone in respect of this gift and/or the said property in any manner whatsoever shall be null and void. 5. That the donor, after the gift of the said property, shall be left with no rights, interest or lien in the said property, which shall hereinafter become the exclusive property of the donee. 6. That the donee hereby accept the gift of the said property without any condition or reservation. 10.1 The donor filed affidavit, which is as under: Affidavit Before the Asstt. CIT, Central Circle-II,New Delhi. Reg.: Income-tax case of Ms. Mayawati,New Delhirelevant to asst. yr. 2003-04 I, Shri Ashok Kumar Jain s/o late Shri Mitthan Lal Jain r/o KD-5, Kavi Nagar,Ghaziabaddeclare on oath as under: 1. That my name is Shri Ashok Kumar Jain, reside at KD-5, Kavi Nagar,Ghaziabadand am fully acquainted with the facts of the case. 2. That during the financial year 2002-03, I have gifted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not recorded any finding that the gifts were not made voluntarily or that the delivery of the possession of the properties gifted was not given to the donee. He has made absolutely no enquiries which would enable him to conclude that the transaction of gift were sham, false or not genuine. Thus, the validity of each gift remains unsustainable (sic). As the AO has doubted the genuineness of the gifts and creditworthiness of the donors we also consider it proper to discuss the relevant aspects regarding these allegations. 10.5 The AO has not only conveniently ignored the relevant documentary evidences produced by the assessee, but has based his conclusions on extraneous considerations. On going through the assessment order it is found that he has been unduly influenced by the fact that so many persons had made several gifts to the assessee and to her family members not only during the assessment year under consideration but also in preceding years and subsequent years. In this regard reference may be made to the details of gifts given on pp. 4 to 6 of the assessment order wherein he has considered the details of gifts made to the assessee and to her family members. It was submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Jain: 11. Smt. Veena Jain made gifts of immovable property, namely, C-58, Inderpuri,New Delhiworth Rs. 22,03,850 on16th Nov., 2002. The AO has shown in para 16 of the order that she made following payment to Smt. Usha by debiting from saving bank account No. 812 with Andhra Bank, Navyug Market, Ghaziabad. 14-9-2002 Rs. 7,50,000 14-9-2003 Rs. 2,00,000 6-9-2002 Rs. 5,00,000 6-9-2003 Rs. 5,00,000 11.1 The AO has also pointed out that Smt. Veena Jain took loans from various persons for purchasing the property. The position of loans as shown by the AO is as under: 3-5-2002 Rs. 5,00,000 Vivek Mangal 3-5-2002 Rs. 5,00,000 Sushma Mangal 29-5-2002 Rs. 10,00,000 Smt. Sushma Mangal. 11.2 By giving these details the learned AO has observed as under: It is difficult to believe that she has given gift of money and immovable assets by taking loans from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO the property i.e. C-57, Inderpuri,New Delhi, worth Rs. 40.68,450 was gifted to Ms. Mayawati on24th Dec., 2002. The position of payment made to the seller of the property prior to the date of purchase is as under: Date Amount 14-11-2002 10,00,000 Paid to Shri Jaideep for purchase of Property at C-57, Inderpuri, New Delhi. 9-12-2002 10,00,000 Paid to Shri Jaideep for purchase of Property at C-57, Inderpuri, New Delhi. 9-12-2002 13,00,000 Paid to Shri Jaideep for purchase of Property at C-57, Inderpuri, New Delhi. 12.1 The AO has also shown the position of loan taken by him which is as under: 28-6-2002 2,50,000 Ch. From Sh. Mahipal Singh 2-7-2002 10,00,000 Ch. From Mrs. Uma Jain W/o Late Sh. Satish Jain, 78, Puranakia, Lucknow. 12-7-2002 5,00,000 Ch. From Sh. Dhirendra Kumar Bharadwaj, Patpar Ganj, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission. Gift made by Shri Pankaj Jain: 13. The AO has observed that Shri Pankaj Jain made a gift of Rs. 2,00,000 after borrowing the amount from Blue Bells Finance Co. Ltd. The observations of the AO in this regard are as under: It is seen that the entire gift made by him is out of amount received from M/s Blue Bell Finance Co. It is surprising that the assessee has gifted the amount out of loan taken from this concern. Since there was no occasion for making the gift, the gifted amount is more than the income of the assessee, there is no relation between the donor and the donee I hold that it is only an arranged gift and an accommodation entry. 13.1 This finding of the AO has been found to be incorrect by the learned CIT(A) who has observed that the gift made by Shri Pankaj Jain was not out of money borrowed. He has also observed that the gift was by account payee cheque No. 171816, dt.17th Dec., 2002drawn on Andhra Bank for Rs. 2,00,000. 14. The above discussion goes to show that the AO has collected irrelevant details and has based his finding regarding genuineness of the transactions of gifts on these irrelevant and unconnected material which has little bearing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted requests. Since the assessee was not confronted with the statement recorded by the Addl. Director of IT, the assessee also took specific grounds to that effect before the learned CIT(A). In the written submission dt.10th Oct., 2006this request has been repeated which is as under: The appellant thereafter immediately asked the AO vide letter dt. 18th April, 2006, to supply the documents/statements on the basis of which the AO had drawn such inference but the AO did not confront the appellant with any such evidence/statement of donors in complete violation of the principles of natural justice. The appellant on various occasions asked the AO to supply the copies of the statements given by the donors, however, the same were not supplied to the appellant in clear violations of the principles of natural justice. 15.3 Thus, it is clear that the AO has considered the material against the assessee to which she was never confronted nor she was given copies thereof to meet out the adverse material, if any, being used against her. This is against the sound canons of natural justice. 15.4 In the case of M.S. Aggarwal vs. Dy. CIT (2004) 83 TTJ (Del) 692 it was held that the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mental state. The element of love and affection relate to emotions of a man. One may be impelled by his conscience or may be moved by emotions to part away with his wealth or property and to give the same to a particular person for whom he has developed love and affection. Such a desire can be developed at any time and on any ground. The factors which weigh for executing such desire are best known to the donor. It is not easy to make probe into such human psychology or human emotions which one may carry at the time of making such sacrifices. It has been stated by some of the donors that the assessee was engaged in the welfare of downtrodden and dalit in the society. May be the prompting motive were such appreciable deeds of social welfare of the problem of the weaker sections of the society, which made the donors to make gifts to her. Smt. Veena Jain has gone on record to say that the assessee was making a Sangrahalya and, therefore, she gifted the house property to enable her to achieve her mission. The AO has only gone by surmises and conjectures and guesswork in drawing his inference and in recording his conclusions. In the absence of any cogent material to support his finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dt. 11th May, 2007 [reported at (2008) 1 DTR (Del)(Trib) 24-Ed.] has decided a case relating to two gifts of Rs. 2.5 lakhs each from Sudhir Duggal and Satish Kumar Dhingra. The assessee Mrs. Ranjana Katyal who received the gifts was not related to the donors and one of the ground for rejecting the genuineness of the gift that there was no relationship between the donor and the donee. The objections of the Department to the genuineness of the gift was that the assessee was not able to inform even about the whereabouts of the donors. It was pointed out that donors was not related by blood to the assessee hence there was no question of natural love and affection resulting in the gift. Learned Departmental Representative while supporting the case of the Department also placed reliance of the decision of Delhi High Court in the case of Anil Kumar rendered in ITA No. 875 of 2006. The Tribunal while deleting the addition of Rs. 5 lakhs observed as under: 7. Several authorities have been cited by both the sides, but in our opinion, each case has to be decided on its own facts, since no two cases may be identical. The general principle which could be culled from the authorities a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion is not a relevant criteria. 17.1 The learned AO, after making observations regarding creditworthiness of the donors and genuineness of the transaction of the gift has held the impugned gifts to be non-acceptable and non-genuine. We have already dealt with various objections raised by the AO for treating the gifts as non-genuine and have held that such objections are either irrelevant or extraneous to the basic ingredients of the gifts. 17.2 It is a settled legal position that for claiming the benefits of gifts, the assessee is required to satisfy the following conditions: 1. Identity of the donors. 2. Creditworthiness of the donors. 3. Genuineness of the transactions of the gifts. 18. We shall deal with each ingredient separately. 18.1 Identity of the donors: In the instant case all the three donors appeared before the AO and their statements were recorded. Two of them appeared before the Addl. Director of IT (Inv.). All the three are assessed to tax. Donors appeared before three different authorities which confirms their identity namely: (1) Before Registrar. (2) Before Addl. Director of IT. (3) Before the AO. 18.1.1 And therefore the AO has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial on record and find that the CIT(A) was correct in holding the donors had full creditworthiness and were capable of making the gifts from their own sources. 18.3 Genuineness of the transaction of gifts: Once the identity of the donor is established and his capacity is also proved then the only question to be seen is as to whether the transactions of gift was genuine or not. For examining this aspect, the conduct of parties, that is the donor and the donee, and the appreciation of attending circumstances becomes necessary. The conduct can be seen from various angles. If the donee makes his or her own investments for arranging the gift or purchasing the gift or directly or indirectly manages such gifts then such conduct will definitely render the transactions as a colourable one or of dubious nature. Similarly, if the donor makes a gift in lieu of some valuable consideration or for any tangible benefit or for past or future consideration, in terms of money or monies worth, then such gift may not be treated to be genuine. Likewise, if the circumstances under which the gift is being made show that the gift was made to cover up or conceal other transactions or to convert black mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have repeatedly confirmed the fact that the properties were gifted by them to the donee out of natural love and affection. The aspect of voluntarily giving of gifts has been fully proved in all the three cases. The delivery of possession was given at the time of making gift. The gifts of immovable property in the instant case prove the genuineness of the transactions beyond any shadow of doubt because of the procedure adopted for transferring such properties by way of gift through registered deeds. 18.3.3 It is not uncommon that people give donations and charities to persons in whom they place faith or for whom they have limitless regards. Similarly, gifts are also made of invaluable properties for furtherance of noble objects executed by personages of high eminence. As stated by the donors in their statements recorded by the AO, the donee is a public and political figure who was working for the welfare of the downtrodden in a missionary manner and on account of this social work, the donors decided to part away with their properties by giving the same as gift to her. The element of reverence, veneration or personal esteem and faith all depend upon personal feelings and desire. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that the Tribunal was justified in holding that the sum of Rs. 1,05,000 received by the assessee from Abu Sufian under gift deed dt.22nd June, 1978, was not taxable as the assessee's income from his profession/vocation. The reference is answered in favour of the assessee and against the Revenue. No order as to costs. 18.3.5 In the instant case the Department has not brought any material to question such feelings and desires of the donees and, therefore, the AO was not justified in holding that the gifts were not genuine. 19. Keeping in view of the totality of the facts and circumstances of the case and after considering the entire material available on record we are of the opinion that all the three gifts are not only genuine but also the identity and capacity of the donor to make the gift stands duly and fully established. Hence, we uphold the findings of the learned CIT(A) in holding that the assessee has fully discharged not only her onus but also the burden cast on her by proving the identity of the donors and their creditworthiness, as well as the genuineness of the gift. Accordingly, we uphold the findings of the learned CIT(A) deleting the additions made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor only. Therefore, a cash credit appearing in assessee's pass book relevant to a particular previous year, in a case where the assessee does not maintain books of account, does not attract the provisions of s. 68. 20.6 In the instant case, in view of the above, neither the gifts relating to immovable properties can be covered under s. 68 nor the gift of Rs. 2,00,000 received by' the assessee can be covered under that provision. Nextly, in view of our findings, recorded above, all the gifts satisfied the requirement of a valid and genuine gift. The assessee has fully explained the same and, therefore, it cannot be said that the addition can be sustained even under s. 69 of the IT Act, as held by the AG, because the source of investment in the properties in question stand fully explained by the assessee in the form of gifts which are found to be genuine by us for the reasons given above. Consequently, the grounds taken by the Revenue are rejected. 20.7 In the result, Revenue's appeal is dismissed. ITA No. 279/Del/2007 (Assessee's appeal): 21. The assessee has raised as many as three grounds to challenge the disallowance of standard deduction. Claim u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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