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Dy. Commissioner of Income Tax I (3) , Ahmedabad Versus Shri Bhanuprasad O. Trivedi and Vica-Versa

2015 (11) TMI 734 - ITAT AHMEDABAD

Unexplained cash credits u/s. 68 - AO rejected the gift plea for want of creditworthiness - Held that:- neither the assessee produced his son having very good relations with the donor nor the donor himself for necessary deposition right from scrutiny till date. It goes without any gainsaying that what is left only the donee’s statement or assertion hereinabove in support of the gift and donor’s confirmation received from abroad not even naming the asseessee’s son. We put specific query to the as .....

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there has to be some reasonable element in an explanation offered by the concerned assessee so as to shift the onus in the Revenue’s court. This case does not involve any such shifting of onus much less than the burden. Coupled with this fact that the donor in question is not in any way related to the assessee. And also there is no corresponding channel in the gift instrument linking assessee’s amount credit to that of donor’s account. We take into consideration all these facts and hold that th .....

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hmedabad dated 03-05-2010 in appeal nos. CIT(A)-I/CC.1(3)/217/2007-08 & CIT(A)- I/CC.1(3)/222/2007-08 respectively, in proceedings under section 153A r.w.s.143(3) of the Income Tax Act, 1961; in short the Act . 2. The Revenue s sole substantive grievance in these two appeals is identical. It challenges the lower appellate order deleting additions of ₹ 15 lacs each made by the Assessing Officer in the hands of both these assessees as unexplained cash credits u/s. 68 of the Act. Parties .....

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f a section 153A notice dated 29-06-2007. The assessee filed his return on 23-07-2007 admitting income of ₹ 6,67,670/-. The Assessing Officer in course of scrutiny noticed the assessee to have received a gift of ₹ 15 lacs from one Shri Sunil Gandhi based at Dubai (UAE). The assessee filed photo copy of his donor s pass port, gift declaration dated 07-10-2003, affidavit dated 25-11-2006 solemnly averring in favour of the aforesaid gift by way of demand draft dated 06-10-2003 issued by .....

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t element of natural love and affection was missing in this case. The assessee filed reply to this show cause notice on 24- 072007 referring to the details already furnished forming part of the seized record inter alia classifying copy of pass port as donor s identity proof, gift deed as evidence of genuineness and donor s affidavit possessing net worth of 100million Dirhams to be proof of creditworthiness. The assessee further pleaded in view of all this material that the donor, Shri Gandhi s r .....

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ath Club, S.G. Highway, Ahmedabad. Next came the assessee s reply regarding unexplained money. He contested the said reasons as not been based any inquiry conducted about the donor or from Dubai based exchange dealer. The Assessing Officer did not agree to any of these explanations. He opined in assessment order dated 28-12-2007 that assessee s explanation lacked creditworthiness being based on a self stated donor s affidavit and other material. He referred to assessee s statement recorded u/s. .....

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sufficient evidence to prove creditworthiness of this gift plea. He acted accordingly and involved section 68 of the Act for adding the sum in question of ₹ 15 lacs as unexplained cash credits. 4. The assessee preferred appeal inter alia challenging legality of section 153A proceedings and also assailed correctness of the impugned addition on merits. The CIT(A) has rejected this legal plea and accepts the latter one on merits as follows:- 9.1 The issue of gifts has been discussed in detail .....

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the light of the above referred provisions. In view of the above one has to examine as to whether these legal requirements, as laid down in ss. 122 and 123 of Transfer of Property Act are satisfied in the case of gifts made to the present assessee or not. So far as the gift from 'P' is concerned, the transaction was carried out through accounts payee cheque and reflected in the bank account of the assessee. 'P's statement was also recorded on 30th December, 2005 on oath by the A .....

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since 1994. His net worth as reported by the AO to the CIT (A) is ₹ 1,36,01,314/-. In view of the above documentary and oral evidence on record, the requirements of law of establishing a validity executed gift of movable properties are fully satisfied inasmuch as the donor gifted the amount voluntarily to the donee and has delivered the possession of the gifted property to the donee. - CIT Vs. Smt. Shyamo Bibi AIR 1967 All 82 relied on." (Unquote) (Quote) "The AO has also highli .....

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er point which is regarding lack -of "occasion" for making gifts. He has observed that there was no occasions for the donors to make the gifts are normally given on many occasions like birthday, marriage anniversary and other events. However, gift may be given at any time as per the wishes of the donor and the donee. Thus, it cannot be said that if a gift is not made on particular occasion or any event then such gift is not a genuine gift. Hence, occasion is not a relevant criteria. Ac .....

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at the cheque received from P has been deposited in her bank account. Balance sheets /statements of affairs cannot be equated to books of accounts because "in traditional terms books means a collection of sheets of paper bound together -with the intention that such binding shall be permanent and papers used are kept collectively in one volume. It can also be assumed that it can notes the contentions that it should serve as a permanent record." Bank pass book is not a book maintained &# .....

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is one' of debtor and creditor only. Therefore, a cash credit appearing in assessee's pass book relevant to a particular previous year, in a case where the assessee does not maintain books of account, does not attract the provisions of Section 68 - Sheraton Apparels Vs. Asstt. CIT (2002) 175 CTR (Bom) 651: (2002) 256 ITR 20 (Bom.), CIT ' Vs. BhaichandH. Gandhi (1983) 141 ITR 67 (Bom) and Sampat Automobiles Vs. ITO (2005) 96 TTJ(Jd) 368 relied on." (Unquote) 9.2 In the present ca .....

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ubmission before AO, appellant explained relationship with the donor, occasion & reason of gift. Having considered all such facts, evidences and explanations, I am of the opinion that the appellant has proved the receipt of the gifts from an identified party and creditworthiness is proved by filing affidavit and evidences of assets and bank accounts. As held by Delhi ITAT in the case of Ms. Mayawati vs. DCIT 113 TTJ 178, relationship between donor and donee is not a condition precedent for m .....

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ssessing Officer was not justified in treating gift of ₹ 15,00,000/- as unexplained cash credit. The Assessing Officer has made the addition on a surmises, which cannot be upheld. Therefore the addition of gift as unexplained cash credit is deleted. 5. Therefore, the Revenue is in appeal. 6. The Ld. Departmental Representative reiterates the Assessing Officer s reasons stated in the preceding paragraphs for terming the impugned gift as bogus. Case law of Sumati Dayal vs. CIT (1995) 214 ITR .....

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impugned addition. 7. The assessee strongly supports the lower appellate order accepting his gift plea as extracted hereinabove. He files a paper book and takes us to content thereof for submitting that the gift in question satisfies all essential conditions. Case law of ITAT Ahmedabad bench in IT(SS)A 197/Ahd/2009 decided on 20-04-2012 Smt. Heena Sharma Vs. ACIT is quoted in support which has been subsequent affirmed by the hon ble jurisdictional high court in Tax Appeal No. 712 of 2012 decide .....

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ch about the donors (supra). We asked the Revenue to place on record contents thereof and fixed the case for hearing as part heard. Today i.e. on 18-09-2015, the Revenue has filed assessee s said statement. We have already confronted the assessee about the contents thereof as below:- Q.:6 After seeing paper seized from your premises, it is found that you, your wife, your daughter in law and grandchildrens received Gifts amounting to ₹ 1.45 Crores, from Mr. Sunil Gandhi and Arvidkumar of Du .....

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orders confirming the CIT(A) s findings under challenge are maintained and reversed; is also sought to be drawn. The assessee pleads that wherever two views are possible the one taken by the lower appellate authority is to be confirmed. 9. Heard both sides. Records perused. We deem it proper to recapitulate the facts in brief. The assessee received a sum of ₹ 15 lacs from donor Mr. Gandhi by way of a demand draft. The Assessing Officer rejected this gift plea for want of creditworthiness. .....

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not led any evidence; whatsoever apart from self styled deposition throwing some light upon his love and affection with the donor and vice verse. His case is that this relationship is due to the donor s friendship with his son, Shri Deepakkumar Trivedi. This person has nowhere been produced in support of gift claim. It is seen from the paper book page no. 5 that donor s declaration is dated 07-10-2003 giving a sum of ₹ 15 lacs without any consideration or caveat. Page no. 8 of the paper bo .....

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i.e. corresponding to the assessment time period. The question that arises for consideration in this factual backdrop is as to whether the case in hand involves execution of a valid gift. 10. We have given our thoughtful consideration to the question framed hereinabove. There cannot be any quarrel that a gift instance has to arise from natural love and affection without any consideration. The above said facts and circumstances indicate that neither the assessee produced his son having very good .....

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h this stand. Once the assessee had claimed a specific relation alike that of Kanha and Nand between donor and himself, it was for him to discharge at least initial onus. He has failed to do so. We deem it appropriate to observe at this stage that these income tax proceedings do not involve strict rules of evidence law. At the same time, there has to be some reasonable element in an explanation offered by the concerned assessee so as to shift the onus in the Revenue s court. This case does not i .....

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