TMI Blog2020 (4) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... sment. The ground that, Assessing Officer had not obtained the satisfaction u/s.151 before issuance of notice is also not correct because Assessing Officer has specifically stated that satisfaction was obtained from the Addl. CIT wherein he has stated that he is satisfied with the reasons recorded by the Assessing Officer. Thus, this ground is also not tenable. Thus, the reopening of the assessment u/s.147 r.w.s. 148 is valid and the order of the Ld. CIT (A) on this count is upheld. Addition on account of gift - A Donor cannot have natural love and affection to hundreds of people where gifts were given without any occasion and that to be in several lakhs. Another important factor is that the donor has stated to have gifted huge amount of gifts to various persons and Assessing Officer has even noted 9 such persons also on the basis of information. Once, he has confirmed that he is actually an entry provider and admitted that he has given bogus gifts in lieu of cash, then mere filing of memorandum of gift and affidavit of the donor cannot lead to a conclusive inference that gift is genuine. Mere identification of the donor and movement of the gift through banking channels def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of section 147 were not attracted and could not be applied; And the learned Commissioner Of Income Tax appeal XXIV New Delhi has erred in dismissing all the reasoning and confirming the action of the assessing authority. 2. That assessing authority has grossly erred in law and facts of the case in passing order u/s 147 of the Act without giving the copy of the material in his possession for reopening the case and without giving the opportunity of cross examination of the donor and the learned CIT appeal XXIV New Delhi has erred in dismissing these grounds. 3. The assessing authority has erred in law and facts of the case in making an addition of Rs,5,00,000/- (Rs. Five Lacs Only) u/s 68 of the Income Tax Act, 1961 and learned Commissioner of Income Tax appeals XXIV New Delhi has erred in confirming the addition u/s 68of the Act. 4. The learned CIT appeals XXIV New Delhi has stated that the addition should have been made u/s 69 A of the Act instead of section 68 of the Income Tax Act, 1961 and thus the addition has been wrongly made. 5. That the assessing proceeding were time barred, the learned Commissioner of Income Tax has erred in not passin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29.03.2017 12. Whether the Commissioner/Board/ AddICIT is satisfied on the reasons Recorded By The ITO/AC/that it is fit case for the issue of a notice u/s 148. Yes. I am satisfied Sd/- Addl. CIT, Range 25 New Delhi. 3. In response to the notice u/s.148 issued on 29.03.2007, the assessee after filing the return of income has raised objection against initiation of proceedings on 10.09.2007 which has been disposed of by the AO vide separate order dated 19.09.2007. On merits, the ld. Assessing Officer has given a very categorical finding that; Firstly, the donor was not related to the assessee, and therefore, gift given out of love and affection was beyond the human probability. Secondly, assessee was unable to furnish any evidence or explanation why such a gift was given by the donor. Thirdly, assessee could not prove the creditworthiness and genuineness of the transaction and mere furnishing of particulars and payment by account payee cheque cannot be the sole ground for proving the creditworthiness and genuineness of the transaction. He also analyzed the balance-sheet of Shri Sanjay Mohan Agarwal and fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and material in his possession to form reason to believe that income had escaped assessment and by following the decision of Hon ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers Pvt. Ltd. (2007) 291 ITR 500 (SC) , rejected the said objection of the assessee. 7. Lastly, on the issue that Assessing Officer had no credible information in his possession and without giving any opportunity to cross-examination, reopening is not justified. 8. Ld. CIT (A) held that Assessing Officer not only had sufficient material on record but had credible information from the Investigation Wing relating to the assessee and based on application of mind Assessing Officer has reopened the assessment. In support, he relied upon the judgment of Hon ble Delhi High Court in the case of AGR Investment Ltd. vs. Addl. CIT, (2011) 333 ITR 146 (Del). On the issue of cross-examination also he held that nowhere assessee had produced any material to prove that assessee has requested the Assessing Officer for cross-examination or asked for the reasons recorded. On merits, after detailed discussion and relying upon the various judgments he has confirmed the addition. However, he held that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the relevant findings given in the impugned orders. From a bare perusal of the reasons recorded, it is seen that inquiry and survey conducted by the Addl. CIT (Inv.), Ghaziabad in the case of donor Shri Sanjay Mohan Agarwal, it was found that he was involved in giving accommodation entries in the form of bogus gifts in lieu of cash received by the intending beneficiaries. On perusal of one such account with Vijaya Bank, New Delhi, it was found that out of various beneficiaries, assessee s name and PAN was appearing. However, it was also found that Shri Sanjay Mohan Agarwal had given away gift worth of ₹ 45.75 crore or various bank accounts to numerous persons who were strangers once such a specific information and details about the assessee including the cheque number which also corresponds with credit entries with the bank account of the assessee. Any prudent person on these material and information will definitely have reason to believe that a gift received from an entry provider who himself has admitted that he is providing bogus accommodation entry as gift to various persons, then at that stage, Assessing Officer is neither required to provide any cross-examina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow coming to the issue on merits, we find that assessee in discharge of its onus has filed a memorandum of gift wherein the donor has stated that he is giving gift of ₹ 5 lac to the donor through account payee cheque issued from Vijaya Bank Account, Pansari Road, New Delhi in the donors bank account maintained with the same bank. The said gift has been stated by him to be given out of his own funds and he has also given his income tax particulars. The affidavit of the donor to this effect has also been given. The aforesaid evidences and explanation given by the assessee to prove the genuineness of the gift cannot be held to be sufficient in the wake of glaring material and information on record that, firstly, Shri Sanjay Mohan Agarwal was complete stranger to the assessee and what has been concocted that the donor and the father of the wife of Karta were close friends. However, no such averments have been made in the affidavit or the memorandum of gift. The donor has merely stated that gift is being given out of affection to the donee. The gift out of natural love and affection to stranger needs to be established and it cannot be said that any gift received from the stranger ..... X X X X Extracts X X X X X X X X Extracts X X X X
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