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TMI Blog2007 (1) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... e-wise are as under: Sr. No. Name of the assessee Name & Address of the donor Amount of Gift (Rs.) Date of Gift 1. Sh. Quamruzama Rana (i) Mr. Abdul Javed S/oShri Gafoor R/o 3342, Kucha Rehman, Delhi-6 2,00,000 2-12-2000 (ii) Mr. Mohd. Ahsan S/o Shri Mohd. Hafizur Rehman R/o 3342, Kucha Rehman, Delhi-6 1,00,000 14-12-2000 (iii) Mr. Azhar Mohd. S/o Shri Mohd. Hafiz R/o 294, Matya Mahal, Delhi-6 2,00,000 30-3-2001 Total 5,00,000 2. Sh. Abdul Quadir Rana (i) Sh. Rafiq Ahmad S/o Sh. Mohd. Hafiz, 294 Matya Mahal, Delhi-6 2,00,000 2-12-2000 (ii) Sh. Abdul Arshad S/o Abdul Gafoor, 3342, Kucha Rehman, Delhi-6 1,00,000 14-12-2000 (iii) Kum. Neelofar D/o Mohd. Yusuf Ali, 5205, Balli Maran, Chandni Chowk, Delhi-6 2,00,000 2-12-2000 Total 5,00,000 3. Sh. Noor Salim Rana S/o Late Sh. Liyakat Ali, 36, Krishnapuri, MZR (i) Shri Rafiq Ahmad S/o Mohd. Hafiz, 294, Matya Mahal, Delhi-6 2,00,000 2-12-2000 (ii) Shri Shakil Ahmad S/o Mohd. Hafiz, 294, Matya Mahal, Delhi-6 1,00,000 6-12-2000 (iii) Shri Shakil Ahmad S/o Mohd. Hafiz, 294, Matya Mahal, Delhi-6 2,00,000 30-3-2001 Total 5,00,000 4. Sh. Zakir Ali S/o La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na W/o Shahnawaz Rana, 36, Krishnapuri, M. Nagar (i) Shri Azhar Mohd. S/o Sri Mohd. Hafiz, 294, Matya Mahal, Delhi-6 2,00,000 6-12-2000 (ii) Shri Azhar Mohd. S/o Sri Mohd. Hafiz, 294, Matya Mahal, Delhi-6 1,00,000 15-12-2000 (iii) Sh. Mohd. Yusuf S/o Shri Mushtak Ali R/o, 5205, Balli Maran, Chandni Chowk, Delhi-6 2,00,000 26-12-2001 Total 5,00,000 Grand Total 52,00,000 All these appellants have filed the details of the gifts received donor-wise, since an individual donor has given gifts to various appellants before us which is as under: Sr. No. Name of the Donors Name of the Donees/Assessees to whom gift made Date of Gift Amount of Gift (Rs.) 1. Mohd. Ahsaan 1. Zakir Ali Khan 14-12-2000 1,00,000 2. Saida Begurn 2-12-2000 2,00,000 3. Shamia Zeenat 6-12-2000 2,00,000 4. Oamuruzama Rana 14-12-2000 1,00,000 Total 6,00,000 2. Azhar Mohd. 1. Intakhab Rana 6-12-2000 2,00,000 2. Intakhab Rana 15-12-2000 1,00,000 3. Shamia Zeenut 15-12-2000 1,00,000 4. Qamruzarna Rana 30-3-2001 2,00,000 Total 6,00,000 3. Rafik Ahmad 1. Smt. Naushaba Begum 26-3-2001 2,00,000 2. Abdul Quadir Rana 2-12-2000 2,00,000 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t adjournment. On change of incumbent, the undersigned issued a notice under Section 142(1) on 1-1-2004 requesting the assessee to make compliance of the requirements made earlier and also to furnish the original gift deeds and to produce the donors for recording their statement as well as the donee for the same purposes. The authorized representative of the assessee vide letter dated 9-2-2004 filed original gift deed dated 1-12-2000, 14-12-2000 and 26-3-2001 along with an affidavits which has been attested by Oath Commissioner, Delhi on 4-12-2000, 18-12-2000 and 26-3-2001. Since the affidavit filed by a person before presiding officer of a court is a self-serving document unless the person who is deponent is produced for examination before the presiding officer. Therefore, an opportunity was given on 9-2-2004 to produce the donor and donee for recording the statement so that the genuineness of the gift may be verified on 20-2-2004. On 20-2-2004 Shri Dinesh Mohan, Advocate attended and stated that original gift deed etc. have been filed and he is unable to produce the donor and donee for examination. Therefore, assessment of the assessee may be completed on the basis of evidences f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the donors, the relationship between the donors and donee to establish that there is a natural love and affection, and reason and occasion of accepting the gift have been remained unexplained and unestablished. The genuineness of the gift is, therefore, not accepted and treated as undisclosed income of the assessee under Section 68 of the Income Tax Act, 1961. This gives an addition of Rs. 5,00,000." 4. The counsel for appellants submitted that identical finding has been given by the assessing officer in all the cases. The learned Commissioner (Appeals) found that the donors are not relatives of the appellant. There is no special occasion for receipt of gift. When the copy of balance-sheet in respect of donor Shri Rafiq Ahmed as on 31-3-1998 was filed, the learned Commissioner (Appeals) noted that the total income for assessment year 1998-99 is meagre sum of Rs. 50,750 and the withdrawals for household expenses are Rs. 41,500. Thus the net savings in respect of one of the donor Shri Rafiq Ahmed was Rs. 9,250. Shri Rafiq Ahmed maintains a family of eight in Delhi. He also examined the bank account of the donor Shri Rafiq Ahmed. He noticed that there is hardly any transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Smt. Naushaba Rana for the purpose of arguments. He submitted that the assessee Smt. Naushaba Rana received gifts from Shri Rafiq Ahmed, Shakeel Ahmed, Mohd. Yusuf and Mohd. Hafiz. Shri Rafiq Ahmed has total capital of Rs. 15.47 lakhs, Shri Shakeel Ahmed has total capital of Rs. 21.82 lakhs and Shri Mohd. Yusuf has capital of Rs. 19.68 lakhs. Their identity is proved as they are assessed to income-tax. All of them have signed declaration of gift and affidavit confirming gift. The amount has come from their bank accounts. Only because the same were not produced before the assessing officer, no adverse inference can be drawn. He submitted that all these appellants shown their inability to produce donors and donees for examination. The assessing officer in such circumstances, should have issued summons to the donors. A request was made by the appellants by letter dated 14-1-2004 for the same purpose. Since the assessing officer failed to issue summons under Section 131 of the Act, no adverse inference can be drawn for not producing the donors. For this purpose, he relied upon the following decisions: (i) Nathu Ram Premchand v. CIT (1963) 49 ITR 561 (All.); (ii) EM.C (Works) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who at the instance for the assessee did appear before the GTO and confirmed of having made gift to the assessee. The donors also filed gift tax returns obviously at the instance of the assessee but the GTO completed the assessment on protective basis. This queer behaviour and cannot be ignored off. It is well-settled law that the taking authority can take note of surrounding circumstances CIT v. Durga Prasad More [1971] 82 ITR 540 (SC). In Sumati Dayal v. CIT [1995] 214 ITR 801/80 Taxman 89 (SC) the Apex Court has held that considering the surrounding circumstances and applying the test of human probabilities is a must. Applying the test of human probabilities, it cannot be accepted that the gifts received by the assessee from the agriculturists were genuine ones. The fact that the gifts were received by cheques/drafts has no relevance because as held by the Hon'ble Calcutta High Court in the case of CIT v. Precision Finance (P.) Limited [1994] 208 ITR 465. Mere payment by account payee cheque is not sacrosanct nor can it make the non-genuine transaction genuine. As stated above, the donors were rank outsiders/strangers (not related to the assessee even distantly) and there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee by giving gifts in such huge sum and also filing their letters etc. made themselves unavailable for verification of such fact. Thus it is to be held that everything is not well either with the donors or with the donees. Mere filing of certain papers do not prove the genuineness of a transaction particularly when the assessing officer requires the presence of the parties to the transaction. No circumstances are demonstrated as to why none of the 16 donors were available for verification or examination by the assessing officer. As rightly contended by the learned DR the question is not of simple cash credit by way of loan but giving away the sum for ever by way of gifts. In such circumstances, apart from the ingredients to prove genuine cash credit, something more is required to be demonstrated to justify the gifts. There is neither any occasion, nor there is any relationship. The balance-sheet as on 31-3-2001 of any of the donors has not been filed. Thus what is the balance available to the donors as on date of gifts not made known. Even going by the balance sheet as on 31-3-1998, the donors are of no means, particularly in the present date environment and in particular when th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to contend that he is not maintaining any books of account. The statement of affairs prepared is testimony of the same. Such statement also includes the receipt of gift. Thus once it is found that the gifts are not genuine and such gifts explain assets held by the assessee, the amount has to be treated as undisclosed income of the assessee and liable to be added as income. Thus the decision of the Tribunal relied upon by Shri Sapra is distinguishable on facts. In the said case it was found that the assessee is not maintaining any books of account and hence no addition can be made under Section 68 of the Act. However, in the present case, it is found that since the assessee has furnished his statement of affairs, which can be prepared only on the basis of books of account, the addition can be made under Section 68 as well as under Section 69 of the Act. The decision of Allahabad High Court in the case of Nathu Ram Premchand (supra) relied upon by the learned Counsel for the assessee is clearly distinguishable on facts. In the said case there is a specific finding that the assessee was handed over the "Dasti" summons to produce a witness who has given the loan. The creditor w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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