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TMI Blog2017 (3) TMI 1470X X X X Extracts X X X X X X X X Extracts X X X X ..... y on record. 3. That in the facts and circumstances of the case, the Id. CIT (A) is not justified in upholding the addition of Rs. 45,00,000/- u/s. 68 by concluding that "the assessee has not discharged its onus of providing explanation of the genuineness of the amount credited in the bank account of the appellant" ignoring the fact that the impugned amounts were transferred from NRE account of her real brothers. 4. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard and disposed off." 3. The only issue in the present appeal pertains to addition made u/s. 68 of the Income Tax Act, 1961 (in short 'the Act') on account of gifts received by the assessee amounting in all to Rs. 45 lacs. 4. Brief facts relating to the issue are that during the course of assessment proceedings, the Assessing Officer noted that the assessee had received gifts amounting to Rs. 45 lacs from her brothers namely Shri Tarsem Kumar, son of late Shri Amar Nath, resident of Evergreen Way Hayes, United Kingdom, amounting to Rs. 33 lacs and Shri Pirthi Chand, son of late Shri Amar Nath, resident of 6A, Cremonia No. 84, Crema Cap 26013, Prov. Cremona, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. CIT (Appeals) stated that based on these facts, it was highly improbable that without any occasion the brothers could advance such a huge amount to the assessee in the nature of gift. The Ld. CIT (Appeals) further stated that in fact, there was no evidence to substantiate the relationship of the donors with the assessee. The Ld. CIT (Appeals) further stated that four documentary evidences required by the Assessing Officer had never been filed by the assessee and further no evidence in regard to the capacity of the donor had been produced. Therefore, The learned CIT (Appeals) held that the assessee had failed to prove the genuineness of the nature of the transactions and found the explanation of the assessee to be unsatisfactory and, therefore, upheld the action of the Assessing Officer in treating the said gifts as unexplained under section 68 of the Act. The learned CIT (Appeals) relied on a numbers of decisions in this regard as follows : 1) Sumati Dayal Vs. CIT, 214 ITR 801 2) Chan Sukh Rathi Vs. CIT, 270 ITR 368 3) CIT Vs. Smt. Kamlesh Rani (2013) 37 Taxmann.com 79 7. Aggrieved by the same, the assessee has now come up in appeal before us. During the course of hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuineness of the transactions as also the capacity of the donors. The learned D.R., therefore, stated that the assessee had not discharged its onus as contemplated under section 68 of the Act and, therefore, the addition made by the Assessing Officer had been rightly upheld by the learned CIT (Appeals). The learned D.R. relied upon the order of the Hon'ble Jurisdictional High Court in the case of Jaspal Singh Vs. CIT, 290 ITR 306 and the decision of the Chandigarh Bench of the ITAT in the case of Smt. Anita Aggarwal vs ITO Reorted in 61 taxmann.com 337. The learned D.R. also pointed out that the assessee had also not proved the relationship with the donors and, therefore, the said transaction could not be stated to be in the nature of gifts received from brothers. 10. The Ld. counsel of the assessee, in rejoinder, stated that the copies of passport placed before the Assessing Officer which showed the names of parents of the donors ,adequately proved that they were brothers of the assessee. The Ld. counsel of the assessee further relied upon the order of the Jurisdictional High Court in the case of CIT Vs. Jawahar Lal Oswal in ITA No. 49 of 1999 dated 29.1.2016 11. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gifts, is proved by the fact that the amount has been given through banking channels ,being NRE accounts and bank accounts of the donors had adequate balance in it to given the stated gift. 14. We find merit in the contention of the Ld. counsel of the assessee and are in complete agreement that the assessee has duly explained the sum received by her as also the nature and source of the amount received. The identity of the creditor/donor, we find is not in dispute in the present case. The relationship with the donors is proved by the identical name of parents reflected in their respective copies of passports and further corroborated by the confirmations filed by the donors. The nature of the amount also cannot be called in question since it is absolutely normal for brothers to give gifts to sisters and there is no reason at all to disbelieve the same merely because no gifts were given in the past. The only aspect remaining is regarding the capacity of the donors to make the impugned gift as also the genuineness of the said gift having not been adequately proved by the assessee and the reason given by the Revenue for the same is that the assessee did not file the copies of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long to the donor, thus, proving his capacity to make the said gift, as also the genuineness of the transaction. 17. In view of the above, the identity of the donors not being in dispute and the genuineness of the gift as also the capacity of the donors to make the said gifts having been proved by the assessee and further there being no tangible material with the Revenue which may cast any doubt on the genuineness of the gifts, no addition u/s. 68 could be made in the hands of the assessee. In this regard, The reliance placed by the Ld. Counsel for the assessee on the decision of the Hon'ble Rajasthan High Court in the case of CIT v. Ram Dev Kumar Chitlangia [2009] 315 ITR 435, we find is apt, wherein the High Court has held as follows: The question, as to whether it is established on record, that the gift given is genuine, would essentially be a question of fact. May be, that if in arriving at a conclusion either way, on this aspect, any relevant material is ignored, or irrelevant material is considered, or there is misreading, or non-reading of record, then it may, of course, give rise to substantial question of law. In the present case, identity of all the donors is not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Act." 19. We find no merit in the contention of the Revenue that for proving the capacity of the donor it is essential to file income tax returns of the donors as also copy of the bank accounts maintained in their countries of residences. As stated above, the bank accounts from which the stated gifts have been given are NRE accounts. All deposits in the said accounts can be made only out of the earnings made outside the country. In any case, no cash deposits have been found in the said accounts. Further there are enough deposits in the said accounts to make the impugned gifts. When the availability of funds has been adequately proved, the capacity of the donors to make the gifts also stands proved. By asking the assessee to file copies of the Income Tax Returns and also their bank statements in their country of residence, the Revenue is indulging in the exercise of verifying the source of the source which is settled law, cannot be done in this case. The onus to explain the credit being on the assessee, reflects the general rule of law of evidence codified in section 106 of the Evidence Act, 1872, ,as per which the source of income is a matter with the exclusive knowledge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aise a credible inference of culpability requiring an assessee to rebut the inference so raised. More often than- not, revenue authorities, for want of relevant material, institute "inquisitions", as opposed to inquiries and by addressing questions that the more inculpatory in nature, seek to build their case, from answers proffered by an assessee." 21. The reliance placed by the Ld. DR on the decision of the Jurisdictional High Court in the case of Jaspal Singh (supra), is distinguishable since in the said case there was no relationship between the donor of the gift and the assessee and even the identity of the donor was not found to have been proved. The case of Smt. Anita Aggarwal (supra), relied upon by the Ld. DR, we find is also distinguishable on facts since in the said case the assessee had failed to produce the donors for verification and the summons issued to them had been received back unserved. Also the assessee in the said case had expressed her inability to file confirmation of the donors and it was also found that there was no relation of the donors with the donee nor any occasion to make the gifts. 22. Therefore, we reject the contention of the learned D.R. that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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