TMI Blog2007 (12) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... was wholly illegal and at any rate, without prejudice very excessive. 3. In the remaining effective grounds the assessees have challenged the confirmation of additions under section 68 of the Income-tax Act, 1961, in respect of gift of Rs. 5 lakhs received by the assessee Shri Vinod Behari Jain from Shri Qayyum Khan; Rs. 5 lakhs each received by Smt. Sarika Jain from Shri Qayyum Khan and Shri Vivek Kumar Kapoor and a gift of Rs. 5 lakhs and Rs. 7,20,000 received by assessee Shri Sanjog Jain from Shri Manish Kumar Kapoor and Smt. Zakkan Begum, respectively. 4. Briefly stated, the facts relating to the issues involved in these appeals are that the assessees enjoyed income from share in partnership firm M/s. S.J. Transformer. In the course of investigation, in the case of above firm, it was noticed that the assessees have introduced fresh capitals which were not verifiable in the. hands of the firm for the period under consideration and so, according to the Assessing Officer, the asses sees were liable to pay tax in the individual capacity. In the reasons recorded, the Assessing Officer mentioned that the impugned amounts have escaped assessment under section 147 of the Act and, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Shri Manish Kumar Kapoor during assessment years 2003-04, 2002-03 and 2001-02 has shown total income less than Rs. 1,50,000. He is not having any relationship with the assessees nor he was able to justify as to what sort of love and affection the donor was having towards assessee. In case of donor Smt. Zakkam Begum, the Assessing Officer observed that this donor was not filing any return of her income nor her financial position was sound. She has already divided her entire property among her four sons and now at the age of 80 years she was dependent upon them. She was not having any relationship with the assessee so giving such a huge amount in gift was unusual which makes the entire gift transaction as non-genuine. Lastly, he observed that in the case of these donors, their capacity and genuineness of their gift transaction was not established and keeping in view all these circumstances, the Assessing Officer treated the entire gift transactions in the case of the assessees as non-genuine and made additions under section 68 of the Act. 8. Aggrieved with the orders of the Assessing Officer, the assessees filed respective appeals before the CIT(A) who in the case of assessee, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. We shall now deal with the remaining grounds of appeals of the assessees relating to confirmation of addition by the CIT(A) in respect of the gift amounts received by the respective assessees from different donors. 14. In this regard, we are simply required to give a finding on the genuineness of the gift transactions because while sustaining the impugned additions, the CIT(A) recorded a finding that the assessees have been able to establish the identities and creditworthiness of the donors but have failed to establish the genuineness of the gift transactions and this finding of the CIT(A) is not under challenge before us by the revenue as the revenue is not in appeal against these orders of the CIT(A). 15. The undisputed facts are that on receipt of the gifts amounts from the respective donors, the assessees deposited the amounts in their respective bank accounts and that the asses sees were not maintaining any books of account. The assessee, Sh. Vinod Bihari Jain, is father of assessee, Shri Sanjog Jain, and assessee, Smt. Sarika Jain, is the wife of assessee, Shri Sanjog Jain. It means that all the assessees are members of the same family. The donor, Late Mr. Qayyum Kha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of human probabilities to find out the real and factual position. Further, also considering the decision of Delhi High Court in the case of Sajan Dass Sons v. CIT [2003] 264 ITR 435, wherein the Court took the view that not only must the assessee establish the identity of the donor and his capacity to make the gift, but he must also establish that the amount received by him was in fact a gift, the Tribunal held that the genuineness of the gift transaction cannot be determined without looking into the aspect of human probabilities, relationships of donor and donee, the occasion for making gift and existence of reciprocity, if any. In case the assessee fails to establish anyone of the facts the amounts received by the assessee can be treated as the assessee's income from undisclosed sources representing assessee's own money, introduced in the garb of a gift received by the assessee. Thereafter, the Tribunal treated the gifts as non-genuine. 17. Their Lordships of Hon'ble Delhi High Court affirming the decision of Sajan Dass Sons' case and in Rajiv Tandon v. Asstt. CIT [2007] 294 ITR 488 held that the two donors had absolutely no connection with the assessee and they made gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below. The transactions though apparent were held to be not real ones. May be the money came by way of bank cheques and was paid through the process of banking transaction but that itself is of no consequence. 20. From the ratio of decision of Apex Court in the case of P. Mohanakala, it is clear that even the Apex Court impliedly approved the view taken by the Tribunal in the case of Rajiv Tandon as well as by the Jurisdictional High Court while affirming the above decision of the Tribunal because the Tribunal while deciding the case of Rajiv Tandon have held that the genuineness of the gift transaction cannot be determined without looking into the aspect of human probabilities, surrounding circumstances such as relationships of donor and donee, the occasion for making the gift and existence of reciprocity, if any, and in case the assessee fails to establish anyone of these factors the gift transactions is non-genuine and the amounts received by the assessee can be treated as the assessee's income from undisclosed sources representing assessee's own money, introduced in the garb of a gift received by the assessee. Further, their Lordships while upholding the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tedly the same were found credited in the bank accounts of the assessees, in this regard, we have examined the other provisions of Income-tax Act, 1961 and find that such amounts can be held as unexplained and deemed to be income of the assessees and additions thereof can be made under section 69A of the Income-tax Act, 1961, for reference the section 69A is stated as under:- "69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the (Assessing) Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." 23. Now reverting to the facts of the instant case of the assessees, we find that the amounts in question were alleged to have been received as gift ..... X X X X Extracts X X X X X X X X Extracts X X X X
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