TMI Blog2005 (7) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, though the identity of the person, who has given the money has been established the assessee has failed to prove the creditworthiness of those persons making the payment of such amount to the assessee. All the authorities found that both the persons, who are alleged to have made the payment had no source and capacity to make such payment - we answer the question referred to us in the affirmative, i.e., in favour of the Revenue and against the assessee - IT Ref. No. 43 of 1996 - - - Dated:- 29-7-2005 - Judge(s) : R. K. AGRAWAL., RAJES KUMAR. JUDGMENT At the instance of the assessee, the Income-tax Appellate Tribunal, Delhi, has referred the following question of law under section 256(1) of the Income-tax Act, 1961 (hereinaf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o his income. The Assessing Officer further mentioned that the donors were having no direct relation with the assessee and that there was no proper occasion for making the gifts. He also mentioned that the donors had no capacity to make the said gifts. The assessee filed replies and the thrust of the said replies was that the documents in the form of gift deeds had been executed wherein the factum of gift had been affirmed, the gifts were made through drafts, the donors had also been produced in the course of assessment proceedings and their statements on oath were recorded wherein they had categorically stated and accepted the factum of gift of Rs. 20,000 each. The assessee further stated that when the donors had admitted and confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot sufficient. This is a fact which is apparent from the cross-examination that he is having no means to make the gift. Again, the claim of the assessee that for making the gift, it is not necessary that the donor and donee should have any direct relation. The case law cited, i.e., Lall Chand Kalra v. CIT [1981] 22 CTR 135 (P H) clearly shows that the gift by 3rd person without occasions is not a valid gift in the eye of law and particularly when the assessee is not in the capacity of making the gift." On appeal before the Deputy Commissioner of Income-tax (Appeals), almost the same arguments were advanced as were advanced before the Assessing Officer. The Deputy Commissioner of Income-tax (Appeals) observed that merely proving the identi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee was married during the assessment year 1984-85 wherein he had shown withdrawal of Rs. 10,000 and that the withdrawals stand reduced to Rs. 3,000 in the assessment year 1985-86 and Rs. 3,600 in the assessment year 1986-87 which shows the standard of the assessee. He held that it was impossible to look after the family with the withdrawal of Rs. 3,000 or Rs. 3,600 per annum and that it was against the fact of life that when the assessee was earning an income of Rs. 15,000 and had money to spend upon himself, he will spend upon himself and the family on an average sum of Rs. 350 per month only. He further observed that even in the assessment year 1987-88 Shri Prem Narayan Singhal had shown a withdrawal of Rs. 28,040 and if out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Deputy Commissioner of Income-tax (Appeals) further observed that on the close of business, the assessee had a capital of Rs. 50,000 and he had made a gift of Rs. 20,000 in 1987, i.e., there was a time gap of 4 years between the close of the business and making of gift. The Deputy Commissioner of Income-tax (Appeals) also observed that during the said period of 4 years Shri Rattan Lal had to support his family and he had to incur expenditure and that he had already performed the marriage of one of his daughters. The Deputy Commissioner of Income-tax (Appeals) also referred to the statement made by Shri Rattan Lal that he had helped his son to open a shop somewhere in 1988 by investing Rs. 20,000, Rs. 10,000 was invested by taking loan f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l v. CIT [1963] 49 ITR 273 and the decision of the hon'ble Supreme Court in Sreelekha Banerjee v. CIT [1963] 49 ITR (SC) 112 at page 120. He also relied on the decision of the hon'ble Delhi High Court in the case of CIT v. Mrs. Sunita Vachani [1990] 184 ITR 121. The Tribunal considered the rival submissions and observed that the case of the tax authorities was with reference to section 68 of the Income-tax Act and not with reference to the provisions of the Gift-tax Act, 1958. It further observed that the assessee has to prove not only the identity of the person concerned, but also the capacity and genuineness of the transaction with reference to any addition made under section 68 of the Income-tax Act. It held that the assessee had failed ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
