TMI Blog2010 (4) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, asked the assessee to explain why the sum of ₹ 16,03,810/- (Rs.25,85,810/- minus ₹ 9,82,000/-) should not be treated as unexplained investment in terms of section 69 of the IT Act. Similarly, even though the assessee had claimed to have purchased the plot at Shivangi Bungalows for ₹ 7,20,000/-, yet the Stamp Valuation Authority had valued the said plot at ₹ 15,75,000/- and had charged the assessee with additional stamp duty of ₹ 95,400/-. The AO again asked the assessee to explain why the sum of ₹ 8,55,000/- (Rs.15,75,000/- minus ₹ 7,20,000/-) should not be treated as unexplained investment u/s 69 of the IT Act. It was explained that additional duty was paid in respect of both the properties which had been accounted for in the books of account. It was contended that the assessee had actually paid the consideration that was mentioned in the sale deeds. Additional stamp duty has been levied as per the Jantri price which was notional valuation for the purpose of determining the stamp duty payable. It was not a conclusive evidence to show that the assessee had understated the purchase consideration in both the properties. The AO reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perties under consideration have been purchased by the assessee through registered sale deeds. The assessee claimed that she has paid actual consideration which is recorded in the sale deeds. The additional stamp duty was imposed upon the assessee as per the rate prescribed by Jantri. The Stamp Valuation Authority adopted such valuation as per the Jantri which is notional value for the purpose of determining the stamp duty payable. The AO has not brought any evidence on record that the assessee in fact had paid more consideration as against the consideration recorded in sale deeds. No material is brought on record to prove that the assessee had invested more than what had been shown in the sale deeds. It was, therefore, an inference of the AO that assessee paid more consideration as against the consideration shown in the sale deeds. The learned CIT(A) noted that even if section 50C of the IT Act is not invoked by the AO but the AO has applied its principle. We do not agree with the findings of the learned CIT(A) because ITAT Ahmedabad Bench in the cases of Jalaram Co. and Richa Naresh Jain (supra) have held that provisions of section 50C of the IT Act are not applicable in the ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR relied upon the orders of the authorities below and submitted that the assessee failed to prove the identity of the donors, their creditworthiness and genuineness of the gifts in the matter. The assessee also failed to produce both the donors before the AO for examination. Therefore, the authorities below were justified in treating both the gifts as unexplained. 8. We have considered the rival submissions and the material available on record. It is not in dispute that the assessee received gifts from the above two donors in a sum of ₹ 50,000/- each. The AO wanted to verify the genuineness of the gifts in the matter and asked the assessee to produce both the donors before AO for examination. The assessee failed to produce both the donors before the AO for examination. It, therefore, stands proved on record that the assessee did not comply with the requirement of the AO to produce both the donors for examination before him and to explain the genuineness of the gifts in the matter. The assessee never wanted that the AO should verify the identity of the donors, their capacity to make the gifts and to examine the genuineness of the gifts in the matter. The assessee admittedl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, there was no reason for them not to appear before the AO for examination in order to verify their capacity to make the gifts and to prove genuineness of the gifts in the matter. Hon ble Punjab and Haryana High Court in the case of Yash Pal Goel Vs CIT 310 ITR 75 ( P H) Held, dismissing the appeal, that the financial position of M suggested that he neither had the capacity to make the gift nor the source from where the gift was made. NO reason whatsoever had been assigned for gifting such a huge amount by M to the assessee. M never visited the home of the assessee and hence there was no love and affection. It was nothing but a subterfuge to avoid income-ax. The transactions were not genuine ones . Hon ble Delhi High Court in the case of CIT Vs Anil Kumar 292 ITR 552 (Del) held In the case of gifts mere identification of the donor and showing the movement of the gift amount through banking channels is not sufficient to prove the genuineness of the gift. Since the claim of gift is made by the assessee, the onus lies on him not only to establish the identity of the person making the gift but also his capacity to make such a gift. In assessment proceedings for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal were in the realm of surmises, conjecture and suspicion. On appeal to the Supreme Court: Held, reversing the decision of High Court, that findings of the Assessing Officer, the Commissioner (Appeals) and the Tribunal were based on the material on record and not on any conjectures and surmises. That the money came by way of bank cheques and was paid through the process of banking transaction was not by itself of any consequence. The High Court misdirected itself and erred in disturbing the concurrent findings of fact. 9. Considering the above discussions, it is clear that the assessee failed to prove any relation with the donors and their creditworthiness to make the gifts. No sufficient evidence or material is filed on record to prove the genuineness of the gifts in the matter. Mere identification of the donors and showing gifts through banking channel is not sufficient to prove the genuineness of the gifts in the matter. The above facts, therefore, show that the assessee failed to produce both the donors before the AO for examination. The assessee failed to prove creditworthiness of the donors as well as genuineness of the gifts in the matter. The decisions referred to abo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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