TMI Blog2018 (6) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of land, which was introduced in the assessees' accounts through non-genuine gifts, the Revenue having attempted to tax the onmoney receipts, could not have taxed the gifts again with the aid of section 68 of the Act. In the present case, we are prepared to proceed on the basis that the assessee had established the identity of the donor and his or her creditworthiness. When however, large amounts are stated to have been gifted, that too by a person having no blood relation with the assessee, the question of genuineness of the gifts would require closer scrutiny. If the assessee does not point out any special occasion for a lavish gift being received from such a source, the burden to establish the genuineness of the gift cannot be lightly taken to have been discharged - the nature of gift and its genuineness would call for case wise scrutiny and the answer would depend on range of facts and attendant circumstances. No single formula of rigid application can be laid down. We are compelled to make these observations because in rather peculiar and somewhat perplexing set of facts, in our opinion, the Tribunal has made superficial observations and mechanically accepted the genui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est as nongenuine. 4. After this block assessment order was passed, the Assessing Officer issued notice under section 147 of the Act, reopening of the assessment of the assessee for the same assessment year. Sole ground in the reasons recorded was of the nongenuineness of the gifts received by the assessee from the said foreign source. The assessee contested the reassessment proceedings on the various grounds; principal being that the issue is already examined during the block assessment proceedings and cannot be reexamined now when the Assessing Officer in the block assessment held the gift to be genuine. In the present assessment order, any attempt on the part of the Assessing Officer to take a different view would amount to change of opinion and lastly, in any case, the gifts were genuine. The assessee had established the genuineness of the transaction, identity and creditworthiness of the donor. 5. The Assessing Officer rejected the contentions and in the order of reassessment held that the gift was not genuine and taxed the same under section 68 of the Act. Commissioner of Income Tax (Appeals) reversed the view of the Assessing Officer both on the ground of the validity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iving rise to the reassessment order in which, the Assessing Officer made addition of the gift amount under section 68 of the Act holding the gift to be nongenuine. Like in the previous cases, here also the Commissioner of Income Tax (Appeals) and the Tribunal reversed the order of the Assessing Officer. In the Tax Appeal filed by the department, following questions were framed: A. Whether the Appellate Tribunal was right in law and on facts in deleting addition of ₹ 50,00,000=00 made u/s.68 of the I.T.Act being the disallowance of claim of gift? B. Whether the Appellate Tribunal was right in law and on facts in holding that proceedings under Section 148 are bad in law? Tax Appeal No.544 of 2008 8. This appeal filed by the Revenue concerns the assessee Atul D. Sheth for the assessment year 2001-02, during which, he had disclosed having received gift of ₹ 2.10 crores approximately from his motherinlaw. These proceedings also followed the same pattern as in the previous case giving rise to the present appeal. In the Tax Appeal, following questions were framed: A. Whether the Appellate Tribunal was right in law and on facts in deleting add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer and confirmed the gifts. Their creditworthiness was also duly established. Counsel relied on following judgments: I. In case of Commissioner of IncometaxV, v. Mahendra A. Patel, reported in [2013] 33 taxmann.com 231 (Gujarat). II. In case of Commissioner of IncometaxVI, v. Heena Sharma, reported in [2013] 33 taxmann.com 176 (Gujarat). III. In case of Commissioner of Incometax, v. Pragati Cooperative Bank Ltd., reported in [2005] 149 Taxman 149 (Guj.). IV. In case of Murlidhar Lahorimal v. Commissioner of Incometax reported in [2006] 153 Taxman 451 (Gujarat). 13. We may first examine the question whether in the present assessment proceedings it was open for the Assessing Officer to test the genuineness of the gifts. Since facts of all four cases are substantially similar, we may refer to one such case of the assesseeMukesh M. Sheth for the assessment year 2000-01. As noted, in his case, the return filed was accepted without scrutiny. Subsequently, he was subjected to search operations. Block assessment was carried out for the block period between 01.04.1996 to 12.09.2002. In such block assessment proceedings, the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of the firm M/s.Silver Stone Corporation, hence, no addition is made again in respect of the gift. 14. Few things need to be culled out from this order at this stage. Important is that the Assessing Officer while framing the block assessment seem to have accepted some of the gifts as genuine. Remaining gifts were found to be nongenuine and tracing the trail to the undisclosed income of the assessee through sale of land. 15. After this order was passed, the Assessing Officer desired to reopen the assessment of the assessee for the said assessment year 2001-02 on the ground that the gifts were nongenuine. Section 158BA of the Act pertains to assessment of undisclosed income as a result of search. Relevant portion of which reads as under: 158BA. Assessment of undisclosed income as a result of search ( 1) Notwithstanding anything contained in any other provisions of this Act, where after the 30th day of June, 1995 a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of any person, then, the Assessing Officer shall proceed to assess the undisclosed income in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the regular assessment all over again. Whether in such assessment, the Assessing Officer had found the gift to be genuine or nongenuine is of no consequence. Once the gifts were assessed in the block assessment proceedings, could not be subject matter of assessment in the regular assessment. 17. In the present case, as noted, some of the gifts were held to be genuine. Allowing the Assessing Officer to examine the same issue in the regular assessment and as in the present case, leaving the possibility of coming to conclusion that the gifts were not genuine, would give rise to two conflicting opinions of the authority of the same rank, and as in the present case, at times by the same officer. 18. For the above noted reasons which are somewhat different from those adopted by the Commissioner of Income Tax (Appeals) and the Tribunal, we do not propose to interfere with the Tribunal's final verdict. This is not a classical case where an assessment previously framed without scrutiny is sought to be reopened, nor it is the case where original assessment was after scrutiny, in which, the Assessing Officer had examined certain issues, expressed his opinion which is the subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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