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TMI Blog2016 (7) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer found that the assessee has received gifts from two parties namely Shri Mohan Dattaraya Pandit and Shri Kamalakar Moreshwar Bokil amounting to Rs. 5,00,000/- and Rs. 7,00,000/- respectively. It was submitted by the assessee before the Assessing Officer that donor Shri Mohan Dattaraya Pandit has originally made gift vide cheque dated 19.08.2004 and executed an affidavit confirming the fact of the gift on the same date. However, the cheque could not be presented by the assessee for encashment due to insufficiency of fund and finally Rs. 5,00,000/- stated to be given by the donor in cash on 30.03.2005. Copy of IT return of donor Shri Pandit was submitted. As regards another donor Shri Kamalakar Moreshwar Bokil, the assessee submitted before the Assessing Officer that a gift of Rs. 7,00,000/- was received in cash on 17.08.2004 which is also supported by an affidavit in confirmation thereof. It was claimed by the assessee that this gift was made in assessment year 2005-06 but the assessee deposited the amount in bank in assessment year 2006-07. Copy of IT return of Shri Bokil was also annexed. To verify the bonafides of the gifts received in cash, both these parties were summ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintain any regular books of account and day to day cash book to substantiate the source of cash gift. The donor claimed before the Assessing Officer that he and the assessee are good friends from last 12-13 years. There is, however, no particular reason and occasion for grant by way of gift. It was merely given out of natural love and affection. The Assessing Officer did not find any legitimacy in the submissions made by the assessee in the light of statement of the donor and other evidences placed before him. The Assessing Officer noted from the return of income of donor Shri Bokil that for the assessment year 2004-05, the income returned was Rs. 76,000/- whereas for the assessment year 2005-06 it was Rs. 2.49 lakhs and for assessment year 2006-07 it again came down to Rs. 1.91 lakhs. The withdrawal was shown at about Rs. 36,000/- per annum. The donor has shown investment which is out of borrowed funds. Own capital of the assessee as on 31.03.2005 is paltry Rs. 4.14 lakhs and as on 31.03.2006 it is only Rs. 7.12 lakhs. The cash in hand is shown to be Rs. 3 lacs approx as on 31.03.2004 against the total capital of Rs. 7.69 lakhs whereas it has come to as low as Rs. 1469/- as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examined and their statements were recorded. They confirmed on oath that they have given gift to the assessee aggregating to Rs. 12,00,000/-. In the circumstances, the onus which lay on the assessee is successfully discharged and the burden is shifted on the Revenue which has not been discharged. The action of the Revenue is therefore contrary to the provisions of law. 8. The Ld. Departmental Representative (DR) for the Revenue, on the other hand, submitted that the Assessing Officer as well as the CIT(A) has analyzed the issue threadbare on facts and placed reliance on the orders of the authorities below. 9. We have carefully considered the rival submissions and perused the material on record. The solitary issue involved in the instant case is bonafides and genuineness of gifts received from two donors aggregating to Rs. 12,00,000/- found credited in the capital account of the assessee. From the assessment order, We observe that the assessee claims to have received gift from Shri Mohan Dattaraya Pandit and Shri Kamalakar Moreshwar Bokil amounting to Rs. 5,00,000/- and Rs. 7,00,000/- respectively. We also note that assessee claims to have received Rs. 5,00,000/- from Shri Pandit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) reported in 26 taxmann.com 354 has held that under S. 68, the burden is on the assessee to show that the amount received by purported gift(s) from the donors is a "gift" in the legal sense. The assessee has to show whether the donors have the financial capacity to make the gift(s) in favour of the assessee. The fact that the two are assessed to tax at Singapore does not answer the question. The assessees has to lead evidence to show that the alleged donors had adequate funds in their respective accounts to make the purported gift(s) in accordance with CIT vs. P. Mohanakala (2007) (291 ITR 278) (SC). Thus a very feeble financial capacity raises serious question about an alleged gratuitous payment of such magnitude in the context and renders it incomprehensible. 9.2 Coupled with this, admittedly there is no blood relations between the donors and the assessee. The donors appear to be mere acquaintances. It is difficult to visualize that a person of this grim financial background will venture into giving a voluntary gift to the tune of Rs. 5 lacs or 7 lacs which is equivalent to his income of nearly 4 to 5 years. The purported gift would lead to almost total erosion of the capital o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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