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TMI Blog2013 (2) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) vide order dated 23-11-2009 granted partial relief to assessee. Aggrieved by the order of CIT (A), both assessee and the Revenue are now in appeal before us. 4. The only effective ground of appeal raised by Revenue reads as under:- "1. In directing the Assessing Officer to delete addition of Rs.13,11,500/- made u/s. 68 without appreciating that the assessee could not prove the creditworthiness of the depositor with sufficient documentary evidences." 5. The only effective ground of appeal raised by the assessee reads as under:- "The Ld. CIT (A) erred in confirming the addition of Rs.8,76,000/- u/s. 68 of the Act." 6. During the course of assessment proceedings, on perusing the bank account of the assessee, A.O. observed that assessee had received gifts in the form of Demand drafts aggregating to Rs.21,87,500. Assessee was asked to furnish details of the receipts. Since no reply was received, A.O. considered the amount as cash credit u/s. 68 and added it to the income. Being aggrieved by the decision of A.O., assessee carried the matter before CIT (A). 7. Before CIT (A), assessee submitted that the amount of Rs.21,87,500/- represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced on record the documents that were furnished before the CIT (A), namely the copy of the declaration of the donor stating the gift is made out of their NRE account, confirmation of the receipt of gift by assessee, certificate of the bank certifying the issuance of Demand Draft by debit to their NRE account, copy of passport and the copy of the Income tax return of 3 donors filed by them in USA of 2004. The aforesaid documents were placed at page-4 to 27 of the paper book. The Ld. A.R. thus submitted that the assessee has complied with requirement of Sec. 68 by proving the identity, address and capacity of the donors and genuineness of the transaction and therefore the gifts cannot be considered to be unexplained or bogus and therefore cannot be added to the income. Ld. A.R. further submitted that the signatures of the donors made in the declaration are genuine as the same signature also appears in the bank account of the donors who made gifts to the assessee. She further relied on the decision of Mumbai Tribunal in the case of ITO vs. Prakash Rajani (ITA No.4870/Mum/2009 dated 30-12-2011) and in the case of ACIT vs. Shri Ravi Patel (ITA No.1906/Ahd./2007) dated 25-1-2012. She th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Mr. Dilip Patel has given gifts of USD 251. However in the present case the gift made by Shri Dilip Patel to assessee works out to over USD10,000 which thereby means that gift given by Shri Dilip Patel to assessee has not been reflected in the income tax return filed by him. The Schedule of itemized deduction for other 3 donors is not on record. 14. The assessee has placed in paper book the copies of Income tax returns filed by the 3 donors in USA. From the copies of the income tax returns of the donors filed in USA for calendar year 2004 it is seen that the donors have filed their income tax returns jointly with their spouse which appears to be as per the prevailing tax laws in USA. The details and other facts with respect to the donors that emerge from the returns of Income filed by them are as under:- Sl. Name of the donor Occupation (as per Return of income) Taxable Income (USD) Total taxes payable (USD) Income after payment of Tax (USD) Gift given (USD) to assessee [considering 1 USD = Rs.43] Gift given to assessee (Rs.) 1. Ramanbhai Patel. Not available Copy of Return of income not on record. Not available Not available 20233 870000 2. Shri Suresh Patel. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not given any finding, the general observation of the A.O. that the credits were not genuine has to be rejected in respect of these two donors, as the initial onus of the appellant stands discharged." unquote. The reason given for granting relief in respect of the impugned two donors appears to be non-convincing especially when the A.O. has given findings of facts; hence the Remand Report ought to have been considered along with the assessment order. 18. In the case of Rajeev Tandon (supra) the Hon'ble High Court had upheld the decision of Delhi Tribunal which has been reported in 109 TTJ Delhi 261. In that case, after relying on the various decisions of High Courts and Tribunals, the Tribunal has held as under:- "15. Thus, from the above decisions (supra) for accepting the gift amounts received by the assessee to be genuine the ingredients required to be taken into consideration by us are that the assessee must establish the identity of the donor, his financial capacity to make such gift, as well as, the genuineness of the gift transaction. The genuineness of the gift transaction cannot be determined without looking into the aspect of human probabilities, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was any occasion nor they were related to the assessee nor there was any reciprocity between them regarding exchange of such gifts. Now, the simple question which arises in mind is whether it is humanly probable that a person may give away his hard earned money, earned in foreign country, as a gift to an Indian acquaintance merely out of love and affection when that Indian is not related to him and that NRI donor has no occasion (sic) giving the amount in gift. If we put this question to any human being having a normal human behaviour the obvious answer would be 'no'. Therefore, applying the test of human probabilities, as laid down by the Apex Court in the cases (supra), the A.O. was fully justified incoming to a conclusion that these were bogus gifts made by the donors to the assessee, which was assessee's own unexplained money routed through the donors simply to increase the capital of the assessee to enable the assessee to purchase the house for a sum of Rs.47.5 lakhs. The A.O. was further justified in treating the gifts as not genuine and adding the same to the income of the assessee under section 68 of Income Tax Act, 1961 as income from other sources. Consequently, the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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