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The Commissioner of Income Tax II, Pune Versus Shri Gautam Balasaheb Ladkat, Smt. Asha Balasaheb Ladkat, Shri Sameer Balasaheb Ladkat, Late Shri Balasaheb M Ladkat

2015 (9) TMI 389 - BOMBAY HIGH COURT

Additions u/s 68 - Maturity proceeds of RIB shown as gifts from unrelated Non Resident India - satisfactory explanation with regard to its nature and source questioned - Held that:- Assessee had led evidence to establish the capacity of the donor. This was evident from the fixed deposit certificates as well as bank statements pertaining to the period when subscription was made to RIB Bonds by the donor. Insistence on the part of the revenue seeking to examine the financial capacity of the donor .....

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se. Revenue could not dispute the concurrent finding of the two authorities that the gift was received from an NRI who had originally subscribed to the RIB Bonds. These bonds were transferable and in fact transferred to the respondent assessee by making a necessary declaration in that regard with the State Bank of India.

So far as the other objection of the revenue that the decision of the Allahabad High Court in Kanchan Singh [2008 (5) TMI 641 - ALLAHABAD HIGH COURT] would have no ap .....

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before them that the amount of proceeds on the maturity of RIB Bonds was not hit by Section 68 of the Act. This view is reasonable and possible on the basis of the evidence on record - Decided against revenue. - Income Tax Appeal No. 1438 to 1439 of 2013, Income Tax Appeal No. 1934 of 2013, Income Tax Appeal No. 2122 of 2013 - Dated:- 24-8-2015 - M. S. Sanklecha And G. S. Kulkarni, JJ. For the Appellant : Mr Tejveer Singh i/by Padma Divakar For the Respondent : Mr J D Mistri, Sr. Counsel along .....

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in all the appeals is as under:- Whether on the facts and circumstances of the case the Tribunal has erred in holding that the amount of ₹ 2,00,88,783/- credited in the account of the respondent assessee has been received as maturity proceeds of RIB shown as gifts from unrelated Non Resident India was satisfactorily explained with regard to its nature and source? 3) Briefly, the facts leading to the present dispute is that the respondentsassessee in this case had in the subject assessment .....

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ct and credited the entire proceeds on maturity of the RIB Bonds to the income of the respondent-assessee. The Assessing Officer held that the financial capacity and identity of the donor as to make such gift as well as its genuineness was not established. This inspite of the fact that the respondent assessee had submitted fixed deposit receipts of the NRI donor from various banks as well as Bank Statements concerning the period in which the subscription to RIB Bonds was made by the NRI donor. S .....

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tailed analysis of the facts and inter alia rendered a finding that the financial capacity of the donor was established on having produced bank statement and fixed deposit receipt in the name of the donor. It also found that during the assessment proceedings, the respondents assessee had explained the gift by relying on the affidavit of the donor that he had gifted the RIB Bonds to the respondents-assessee and also a letter from State Bank of India, confirming the transfer of RIB Bonds to the na .....

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Allahabad High Court in the case of Kanchan Singh vs. CIT 221 CTR 456 (All) wherein in similar circumstances the concerned gifts of RIB Bonds was held to be valid. 6) On further appeal, the Tribunal by common impugned order upheld the finding of fact arrived at by the CIT (A).This by holding that the identity of the donor was established by copy of the passport of the donor, sworn affidavit executed before the Consulate General of India in Dubai as well as declaration of the gift before the Not .....

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were subscribed to by NRI donor in foreign currency, the transfer of the RIB Bonds by the donor to the respondent assessee was recorded in State Bank of India which was also produced. The impugned order holds that mere non production of the donor before the Assessing Officer will not be sufficient to doubt its genuineness. Besides, after the amendment to the Gift Act the requirement of the donor and the donee being related by blood is not required. Besides reliance was placed upon the decision .....

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onds were purchased but the capacity of the donor in the previous year relevant to the Assessment Year under consideration. This itself indicates that the Assessing Officer was applying an incorrect test. In any case, in the case of Kanchan Singh (supra) since the Allahabad High Court has held that capacity to make the gift and its genuineness has to be judged having regard to the year in which RIB bonds were purchased and not at the time when the donor credits the proceeds of its maturity to it .....

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Thus, the findings of both the CIT(A) and the Tribunal are perverse. Further, it is his submission that the decision of the Allahabad High Court in Kanchan Singh (supra) would have no application to the facts of the present case. It is pertinent to note that Mr. Singh made no submissions with regard to the identity of the donor and genuineness of the gift. The challenge is limited before us only to the capacity of the donor. 8) We find that the respondents-assessee had led evidence to establish .....

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