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Shri Chandrabhan Rajpal Versus DCIT 1 (1) Ujjain

2016 (9) TMI 380 - ITAT INDORE

Addition in respect of gift receipt - genuineness of gift received from outside India - Held that:- In the matter of gifts, assessee is required to discharge the onus of submitting complete detail 'of gifts before the AO. He should have established (i) the identity of the donor; (ii) credit worthiness of the donor; (iii) genuineness of the transaction; (iv) occasion: (v) relationship of the donor and donee; (vi) evidence of natural love and affections. The human probability has to be considered .....

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itor is established then onus is shifted to the Revenue to show that credit is not genuine. But in the case of gift all the three ingredients are necessary to be established by the assesses and merely by giving evidence of identity and credit worthiness of donor, genuineness cannot be taken to be established automatically, 'therefore, test of human probability assumes importance so as to show that there were reasons which prompted the donor to forgo his hard earned capital in favour of the donee .....

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in [hereinafter referred to as the CIT(A)] dated 26.03.2014 and pertains to assessment year 2001-02 as against appeal decided in assessment order u/s. 143(3) of Income Tax Act,1961( herein after referred to as "the Act) dated27.11.2006 of DCIT 1(1) Ujjain [hereinafter referred to as the AO]. 2. The grounds of appeal as taken by the assessee is as under: 1. Because the addition made of ₹ 5 lacs in respect of gift receipt by the appellant is not correct both on facs and in law. 2. Becau .....

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u/s143(3) on 03.03.2004 determining total income at ₹ 7,32,680/. This assessment was cancelled by CIT Ujjain u/s.263 vide order dated 31.01.2006. As a result of which fresh impugned assessment order has been made u/s 143(3)/263. During the course of fresh assessment proceedings the AO noticed that assessee has credited ₹ 5 lacs as gift received from Shri Chetandas Rajpal , a non resident of Dubai (UAE), elder brother of the assessee by DD No. 6348705 dtd. 07.10.2000 drawn on SBI Ujja .....

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of assessment order cannot be produced as there is no taxation in Dubai. The A.O. was not satisfied with explanation and observed that summons can be issued within limited areas where correct address is furnished. The onus lies on the assessee to prove the genuineness , the bankers cannot be substituted for donor. Therefore , the A.O. held that the mere identity is not sufficient to prove the credit of gift and gift given through banking channel does not mean that it is genuine. In support of h .....

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the draft for gift were purchased by donor from cash and not from debiting his bank accounts even when donor was holding a bank account. Accordingly, CIT(A) upheld the transaction of gift of ₹ 5 lakh as unexplained u/s.68 of the Act. 4. Before us, ld. AR for the assessee submitted that the gift was received vide DD. The ACIT 1(1) has recorded the statement of donor, Shri Chetandas Rajpal on 03.12.2008, when he was in India , wherein he has admitted of having given the gift to the assessee. .....

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orities and submitted that genuineness of the gift is not proved as the DD was made through cash and not through bank account of the donor. Nor nay bank statement of the donor has been filed. 6. We have considered the rival submissions and perused the material on record. In our considered view there is no case for interference with the order of ld. CIT(A). It is not in dispute that the donor was having his own bank account in his own name in Dubai. However, still the gift DD was made by paying D .....

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, inspite of the fact that the donor was having bank account. The Hon. Apex Court in CIT vs. P. Mohankalia291 ITR 278 (SC) held that wherein human probability has been emphasized in the matter of gift and it has been held that payment through banking transaction by itself is of no consequence. Thus before us the assessee has failed to establish as to why the amount of DD was made by paying cash and why the transaction was not channelized through bank even both donor and donee were having bank ac .....

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rtinent to refer to the comments of the Hon. Madras High Court in Addl. CIT vs. Ranganathan Chetty (C.R.) (1985) 153 ITR 456 (page 466)as under: "Look of the way the gifts were made. Not only were they made the other people's children, but some of them were made to other people's wifes. In any place, excepting in a tax court, gifts to other people's wifes, even if they are wives of co-partners, would raise a host of questions and not a few eye-brows, except when there is an unde .....

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