TMI Blog2007 (1) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... rom persons of no means to the so-called wealthy and influential persons etc., all put together lead to one and only conclusion that gifts are not genuine. A person who is speaking true will not shirk his responsibility as well as liability to say the same before any examining authority. In some cases a person may not be available instantly but why and in what circumstances he will not come forward to tell the truth should be demonstrated. None of the donors has stated any reason as to why they are not available for examination. The assessee has not been able to produce any such reason. Thus all the circumstances put together lead us to hold that the gifts are not genuine. It is seen that the assessee has prepared his statement of affairs. A statement of affairs is nothing but a balance-sheet of a person as on a particular date. Such statement can be prepared only from the books of account. Thus firstly it is incorrect on the part of the assessee 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 gift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k, 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 Late Sri Liyakat Ali, 36, Krishnapuri, Muzaffarnagar (i) Sh. Mohd. Ahsaan S/o Hafizur Rehman, 3342, Kucha Rehman, Delhi-6 1,00,000 14-12-2000 (ii) Abdul Razak S/o Abdul Gafoor, 3342, Kucha Rehman, Delhi-6 2,00,000 2-12-2006 (iii) Sh. Mohd. Shahrukh S/o Mohd. Yusuf, 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Mohd. Ahsaan S/o Hafizur Rehman, 3342, Kucha Rehman, Delhi-6 2,00,000 6-12-2000 (iii) Azhar Mohd. S/o Mohd. Hafiz, 294, Matya Mahal, Delhi-6 1,00,000 15-12-2000 Total 5,00,000 10. Smt. Naushaba Rana W/o Qamruzma Rana, 36 Krishnapuri, MZR (i) Mohd. Yusuf Ali, 5205, Balli Maran, Delhi-6 1,00,000 2-12-2000 (ii) Sh. Rafiq Ahmad S/o Mohd. Hafiz, 394, Matya Mahal, Delhi 6 2,00,000 26-3-2000 (iii) Shakil Ahmad S/o Mohd. Hafiz, 294, Matya Mahal, Delhi-6 1,00,000 16-12-2000 (iv) Mohd. Hafiz S/o Iliyas Ahmad, 294, Matya Mahal, Delhi-6 1,00,000 2-12-2000 Total 5,00,000 11. Smt. Intikhab Rana W/o Shahnawaz Rana, 36, Krishnapuri, M. Nagar (i) Shri Azhar Mohd. S/o Sri Mohd. Hafiz, 294, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,00,000 2. Abdul Oadir Rana 14-12-2000 1,00,000 Total 2,00,000 5. Shakti Ahmad 1. Smt. Naushaba Begurn 16-12-2000 1,00,000 2. Smt. Saida Begum 6-12-2000 1,00,000 3. Noor Saleern Rana 6-12-2000 1,00,000 4. Noor Saleern Rana 30-3-2001 2,00,000 Total 5,00,000 6. Abdul Razak 1. Zakir Ali Rana 242-2000 2,00,000 2. Smt. Sahin Khatoon 16-12-2000 1,00,000 Total 3,00,000 7. Mohd. Yusuf 1. Smt. Naushaba Begum 2-12-2000 1,00,000 2. Intakhab Rana 26-3-2001 2,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the alleged gifts. The assessee was asked to substantiate the claim of having received gift of Rs. 5 lakhs by producing the donors so that the genuineness of the gift, creditworthiness of the donor and reason and occasion for giving and receiving the gift may be ascertained. On the date fixed for 4-12-2003, the donors were not produced but Shri Dinesh Mohan counsel for the assessee sought 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 g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Rana group of cases is that in earlier years gifts were also received by the other members of the group and whenever, they need, unaccounted money is introduced in the form of gifts. On these facts and circumstances of the case and in the light of the case laws mentioned above, the genuineness of the gifts regarding the basic four elements i.e., identity of the donor and donee, creditworthiness 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han Sons v. Income Tax Officer (IT Appeal No. 762 (Delhi) of 2004, dated 4-8-2006). He submitted that though the assessee has prepared his statement of affairs, the same do not amount to maintaining books of account. Thus, in absence of any books maintained by the assessee, addition under Section 68 is not sustainable. He thereafter referred to balance sheet of all the donors. He selected one sample case 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, sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to do family Doctors by profession, running an ultra modern surgical hospital having very lucrative practice at Rajkot. It is strange that they approached some illiterate/semi-literate agriculturists for getting donations for their personal ends. All the donees are undisputedly wealthier in education, reputation, earthly belongings vis-a-vis the donors who are rank outsiders and simple natured agriculturists 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were asked to produce the donors. It is also not in dispute that the appellants denied their ability to produce donors. It is surprising to note that the assessee who is able to receive huge gifts and has been able to receive the gift deed and affidavit along with income-tax records of the donor could not produce the donors for verification. It is also surprising to note that an these donors who can oblige the assessee 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion is when the assessee is not maintaining any books of account, whether addition can be made under Section 68 of the Act? In the present case it is seen that the assessee has prepared his statement of affairs. A statement of affairs is nothing but a balance-sheet of a person as on a particular date. Such statement can be prepared only from the books of account. Thus firstly it is incorrect on the part of the assessee 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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