TMI Blog2013 (11) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... IT v. P. Mohanakala [2007 (5) TMI 192 - SUPREME Court] - Where there is a relation between the donor and the donee and there was an occasion to make gift, the same has to be considered as genuine - The donor was assessee's father and the gift was given to settle the life of his daughter, the assessee and the donor being a father, it is natural in the Indian social system to give gift to daughters – Decided in favour of assessee. Loan from father’s friend – Held that:- The assessee could not furnish any confirmation letter except furnishing of a self-declaration - The assessee also stated that she does not know lender personally - The credit cannot be considered as genuine and the same has to considered as income of the assessee - The assessee has not proved the genuineness of this amount – Decided against assessee. - IT Appeal No. 1504 (HYd.) of 2010 - - - Dated:- 31-3-2011 - G. C. Gupta And Chandra Poojari For the Appellant : P. Murali Mohan Rao For the Respondent : E. S. Nagendra Prasad ORDER:- PER : Chandra Poojari This appeal by the assessee is directed against the order of the CIT(A)-IV, Hyderabad, dt. 15th Oct., 2010 and pertains to asst. yr. 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om our tenant towards part sale consideration 1st time ₹ 5,00,000 Cheque IInd time ₹ 12,00,000 Cheque III (handed over to CRK) ₹ 10,00,000 Cash IV ( KRK) ₹ 10,00,000 Cash V (handed over to CRK) ₹ 5,00,000 Cash VI (at bank) (handed over to KRK) ₹ 2,00,000 Cash 5-6-2002 VII (handed over to CRK) ₹ 30,00,000 Cash VIII CRK and KRK ₹ 18,00,000 Cash CRK ₹ 7,00,000 Cash CRK ₹ 3,00,000 Cash 16-8-2002 Cheque ₹ 5,00,000 DD ₹ 30,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot aware whether any agreement of sale had been entered into with Smt. K. Rajani Kumari, the seller, or not. 7. In view of the above, the AO issued summons to the assessee's brother Sri K.V. Sreerama Murthy and recorded a statement from him during the course of search on 20th Nov., 2007. In his statement, Sri Murthy stated that the purchase consideration for the above property was ₹ 65 lakhs only. When confronted with the seized diary, he admitted that some of the entries appearing therein matched with the payments mentioned in the registered sale deed. However, he denied that the total consideration paid was ₹ 1,65,00,000. He maintained that the company M/s Globarena Web Technologies Ltd., wherein he and his brother Sri K.V. Dakshina Murthy were directors, was a tenant of the property at plot No. 304-O, Road No. 78, Jubilee Hills, Hyderabad. The property was owned by Smt. Rajani Kumari. She wanted to dispose of the property and, therefore, a proposal had come to them. Since their company had invested huge amounts in the interior decoration and was also growing at that time, they purchased the said property in the year 2002 for ₹ 65 lakhs plus stamp duty. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney' payment. It was pleaded that the assessee or her brothers do not have any sources for the payment of 'on-money' to the tune of ₹ 1 crore. He also argued that no proof or evidence was found during the course of search evidencing payment of such money by the assessee or her family members. Accordingly, it was claimed that the assessee or her family members had nothing to do with the entries made by Smt. K. Rajani Kumari in her diary and the same could not be treated as an evidence to conclude that they had paid 'on-money' of ₹ 1 crore. However, the AO treated the on-money payment at ₹ 100 lakhs and treated it as income of the assessee. 11. On appeal, the CIT(A) confirmed the action of the AO. Aggrieved, the assessee is in appeal on this issue before us. 12. We have heard both the parties and also perused the material on record. The learned counsel for the assessee relied on the following judgments : (i) CIT v. P.V. Kalyanasundaram [2007] 294 ITR 49 (ii) ITO v. Santosh Kumar Dalmia[1994] 208 ITR 337 (iii) Bhola Nath Majumdar v. ITO[1996] 221 ITR 608 (Gau.) (iv) H.E.H. Nizam's Jewellery Trust v. Asstt. CWT[1997] 226 ITR 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these entries in the diary shown to him. He and his father had paid only purchase consideration of ₹ 65 lakhs as recorded in the sale deed. In spite of this, the AO considered the total payment at ₹ 1,65,00,000 which includes an entry relating to pronote of ₹ 25 lakhs. In our opinion, there is no evidence other than the seized material marked as 'A/CRK/04' where relevant entries are made at ₹ 1,65,00,000. The seized material was not found at the premises of the assessee and there is no corroborative material to suggest that the assessee has actually paid ₹ 1.65 crores towards purchase consideration of the property. The assessee and her brothers categorically denied the payment of any money over and above ₹ 65 lakhs. The AO placed his reliance on the statement of Shri Sreerama Murthy, who is a third party. In our opinion, the evidence brought on record by the Department is not enough to fasten additional tax liability on the assessee. 14. The learned Departmental Representative strongly contended that the payment of ₹ 65 lakhs out of ₹ 165 lakhs was tallied with the assessee's books of account and the balance ₹ 100 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame of the assessee. The allegation of the Department is that the seized material denotes the payment made by the assessee to the purchaser for purchase of the property. However, we find no such narration or name of the assessee in the seized material. The Department is not able to unearth any document or material or any corroborative material to show that the assessee herein actually paid ₹ 165 lakhs for purchase of the property. The Department has not brought on record the date on which the payment was made and the source from which it is paid and/or any details of bank account from where the cash was withdrawn. Without any of these details, the Department has taken a view that the assessee has paid ₹ 165 lakhs for purchase of the property. The Department cannot draw inference on the basis of suspicion, conjectures and surmises. Suspicion however strong, cannot take place of material in support of the finding from the AO. The AO should act in a judicial manner, proceed with judicial spirit and come to a judicial conclusion. The AO is required to act fairly as a reasonable person and not arbitrarily and capriciously. The assessment made should have enough material and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was unable to produce the confirmation letter. However, the Department has not doubted the fact that the gift was received from her father. According to the assessee's counsel the gift has been given on account of natural love and affection to settle the life of the assessee. We have carefully examined the facts of the case. In our opinion, out of natural love and affection to settle the life of his daughter assessee's father has given the gift of ₹ 5 lakhs. We find no reason to sustain this addition. Accordingly placing reliance on the judgment of the Hon'ble Supreme Court in the case of CIT v. P. Mohanakala[2007] 291 ITR 278 wherein it was held that where there is a relation between the donor and the donee and there was an occasion to make gift, the same has to be considered as genuine. In the present circumstances, the donor was assessee's father and the gift was given to settle the life of his daughter, the assessee and the donor being a father, it is natural in the Indian social system to give gift to daughters. Accordingly we delete the addition. 17. The last ground is with regard to addition of ₹ 5 lakhs' loan obtained from S. Sudha Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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