TMI Blog2013 (11) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... donor) has not been established by the assessee - In the absence of supporting documents, the said certificate can only be considered as a self serving and bald certificate. Further the donor has failed to establish the nexus between the funds, if any, received by him from M/s Palm General Trading LLC and the impugned gifts – Decided against the Assessee. Addition of Rs.2.00 lakhs made to cover up the deficiencies noticed in the books of account relating to the contract business – Held that:- It was also an admitted position that substantial expenses were not supported by independent cross verifiable vouchers and therefore, the disallowance out of the same was justified for the reason that the appellant failed to establish genuineness of all expenses and establish identity of payees - Assessing Officer was justified in making the disallowance which was also reasonable considering the total claim of the appellant - Assessee failed to furnish any material or explanation to contradict the findings of the tax authorities – Decided against the Assessee. - I.T.A No. 515/Coch/2011 - - - Dated:- 8-2-2013 - Shri N. R. S. Ganesan, JM And B. R. Baskaran, AM,JJ. For the Appellant : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the transactions is also proved. He further submitted that the Ld CIT(A) refused to admit the certificate obtained from M/s Palm general trading LLC on the ground that the same is not admissible under Rule 46A of IT Rules. He submitted that the Ld CIT(A) erred in observing that the assessee should have filed copies of financial statements of the donor duly certified by the Indian embassy without appreciating the fact that there is no income tax, service tax etc. in UAE. He further submitted that the case law relied upon by Ld CIT(A) are distinguishable and do not apply to the facts and circumstances of the case. The Ld A.R placed reliance on the Third member decision of Jabalpur bench of Tribunal in the case of DCIT Vs. Vishwanath Prasad Gupta reported in (2011)(52 DTR (Jab.)(TM)(Trib.) 346) and submitted that the Tribunal has held that there is no reason to disbelieve gifts received by the assessee if (a) the gift has been received by cheque; (b) the gift has been disclosed in the books of accounts of the assessee and (c) the donors have affirmed about the gift through their affidavits. 5. The Ld D.R submitted that the impugned gifts have been received through Demand Drafts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 111325337 March 2005 5,00,000 35,00,000 The Assessing officer has noticed that the assessee had received substantial gifts from the same person in the preceding assessment year also. Before the AO, the assessee could not explain the occasion for receiving the gift. The AO has given a categorical finding that the credit worthiness of the donor was not proved before him. 7. During the course of assessment proceeding, the assessee has filed a confirmation letter and the same reads as under:- "I hereby confirm that I have sent Rs. 35,00,000/- (Rupees thirty five lakhs only) by DD/cheques, to my brother E. Ummer Bava, Down Hill, Malappuram during the year 2004-05. I have been living in the Gulf for over 35 years and have my own business in the form of bakery, departmental store and real estate. I am not assessed to Incometax and do not have a permanent account number. I have sent the above amount to my brother out of love and affection, by way of gift". 8. During the course of appellate proceedings before Ld CIT(A), the assessee has furnished a certificate obtained from M/s Palm General Trading LLC and the same re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed, it I not known whether Shri E. Hamza Bava had also made certain other investments either in UAE or anywhere else. It is also not known whether Shri E. Hamza Bava had given any similar gift to his other close relatives. It is also relevant to note the decision of the Hon'ble Supreme Court in the case of Mohanakala 291 ITR 217,wherein it was held that receipt of money through banking channels was not a conclusive proof to show the genuineness of the transaction. Therefore, since the genuineness of the transaction has not been proved beyond doubt with all necessary evidences, it is not possible to accept the contention of the assessee regarding the gift received from his brother, Shri E. Hamza Bava. Therefore, the claim of gift of money to the assessee cannot be accepted as correct, based on the materials filed by the assessee" 9. Now let us examine as to whether the assessee has discharged the burden of proof placed upon him. In his letter dated 24.3.2011, the assessee has written that the donor was personally present on 16.3.2011 at Kochi in connection with the hearing of appeal and an affidavit was signed before a Notary at Kochi. It is further stated that the affidavit has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant has been established. No Balance Sheet or financial statement or cash flow statement of the donor has been placed on record to indicate exhaustive resources of funds of the donor and the corresponding investments. It is also seen that the above sums on retirement were received by the donor in the preceding financial year and therefore, there is apparently no nexus between the gifts received by the appellant this year and the above funds. The Assessing Officer has observed that the appellant also claims to have received substantial gifts in the preceding financial year from the same donor about which the appellant is totally silent. It is thus, seen that the appellant fails to establish any nexus between the retirement funds of donor and gifts received by the appellant. If the funds were flowing from income earned abroad a corresponding declaration duly counter signed by Indian Embassy in the relevant country ought to have been placed on record along with financial statement indicating financial status of the donor and deployment of income earned abroad". We notice that the authenticity of the certificate given by the M/s Palm General Trading LLC has not been established ..... X X X X Extracts X X X X X X X X Extracts X X X X
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