TMI Blog2016 (7) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... . The purported gift would lead to almost total erosion of the capital of the person concerned. Apparently, the overall behaviour of the so called donors is thus very intriguing and does not accord with ordinary human conduct. When seen in totality, facts and circumstances are squarely against the assessee. Logical conclusion that follows from above is that the claim of receipt of gift from these 2 parties remains unproved and explanation offered in respect of credit towards gifts received is not credible or satisfactory. The credit in the form of gift is thus rightly assessed to tax as deemed income of the assessee. We also find merit in the alternative contention of AO that the Gift so made falls within the ambit of section 56(2)(v) which provides that the recipient of gift from a non-relative is assessable to tax. Assessee failed to show as to how section 56(1)(v) not applicable in the instant case. CIT(A) in our view, has rightly endorsed the contention of AO on applicability of S. 56(1)(v) also. - Decided against assessee. - ITA No.698/PN/2011 - - - Dated:- 8-6-2016 - MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM For The Appellant : Shri M. K. Kulkarni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Pandit who claims to have given ₹ 5,00,000/- as gift to the assessee is a person of very ordinary means and has no financial capacity which permits him to give gift of such large sum. The Assessing Officer observed that it is very surprising that gift was initially given by cheque in August, 2004 when there was no balance available at the disposal of the donor. The Assessing Officer, thereafter, noted that finally the amount was stated to have been given in cash inspite of very grim financial background of the donor. The Assessing Officer analyzed the data of the donor for last 3 financial years and noted that withdrawal in the last three years harbours around meager ₹ 50,000/- per year. Pertinently, the donor has never made any investment worth ₹ 1,00,000/- or more. The returned income ranges between ₹ 60,000/- to ₹ 1,50,000/- in last 3 years. The capital of the donor is stands between ₹ 7,00,000/- to ₹ 8,00,000/-. The cash in hand is as low as ₹ 46,000/- in assessment year 2004-05, ₹ 800/- in assessment year 2005-06 and ₹ 8,000/- in assessment year 2006-07. The Assessing Officer next observed that the donor could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that : (i) no occasion or particular reason to give the gift is discernible from the statement of the donors under section 131 of the Act, (ii) creditworthiness is not proved, (iii) the genuineness of the transactions are not established, (iv) while the assessee claimed to been received gift from Shri Bokil on 17.08.2004, it is deposited in the bank account in the financial year 2005-06 and that too on various dates, (v) Similarly, gift received from Shri Pandit initially by cheque and subsequently by cash was also deposited in cash in the bank account of the assessee on different dates in financial year 2005-06 and (vi) the assessee failed to discharge the onus to prove the genuineness of the transactions. The Assessing Officer relied upon the decision of the Hon ble Supreme Court in the cases of Sumati Dayal vs. CIT, (1995) 125 CTR 124 (SC) and CIT vs. P. Mohanakala, (2007) 291 ITR 278 (SC) to hold that credit of ₹ 12,00,000/- on the capital account remains unexplained in terms of section 68 of the Act. 4. The Assessing Officer also tested the issue on the touchstone of section 56(1)(v) and made an alternative opinion that the gift so claimed to have been received is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated to be replenished in cash on 30.03.2005. However, the Assessing Officer simultaneously noted that the cash has been deposited in the financial year 2005-06 relevant to the assessment year 2006-07 in the bank and credited in his capital account in the same year. The gift from other party namely Shri Kamalakar Bokil is also received in cash. The Assessing officer has dealt with the statement of the donors extensively and demonstrated that the gift received from these parties are sham in as much as these parties have neither any financial capacity nor any tangible relationship to motivate them to surrender such whopping amount irretrievably in favour of the Assessee. 9.1 From a bare reading of the statement recorded under S. 131 as extracted in the assessment order, we find that depositions made when read with the underlying documents and return of income of the donors etc. does not foster any confidence on the bonafides of the gift claimed to have been received from these parties. The Assessing officer has successfully demonstrated that both the parties have meager resources to be assigned any capacity to gift such sizeable amount as claimed having regard to the capital avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with ordinary human conduct. 9.3 Thus, when seen in totality, the weight of facts and circumstances are squarely against the assessee. As a corollary, logical conclusion that follows from above is that the claim of receipt of gift from these two parties aggregating to ₹ 12 lacs remains unproved and explanation offered in respect of credit towards gifts received is not credible or satisfactory. The credit in the form of gift is thus rightly assessed to tax as deemed income in the hands of the assessee. 9.4 We also find merit in the alternative contention of the Assessing officer that the Gift so made falls within the ambit of S. 56(1)(v) of the Act. As per the said provision, the recipient of the gift from a non relative is assessable to tax under S. 56(1)(v). The Assessee has failed to show either before the AO or before the CIT(A) and even before us as to how ingredients of section 56(1)(v) are not applicable to in the facts of this case. In the course of hearing, the Ld. AR only marshaled his contention with reference to S. 68 of the Act. Applicability of S. 56(1)(v) was not addressed to us inspite of his attention specifically drawn by the bench in the course of hea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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