TMI Blog2022 (10) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... e on the subject, the identity of the person giving the gift, relationship of such person with the assessee, financial capacity or creditworthiness of the person making the gift, the occasion to make such a gift or the circumstances to show natural love and affection and all these taken together to prove the genuineness of the gift transaction was required to be examined by the AO. In the instant case, we find that the AO has accepted the genuineness of the gift transaction on the basis of submission made by the assessee that an amount has been received as gift from his son who is in Melbourne, Australia through NEFT from Commonwealth Bank on 24/11/2015 and 04/12/2015 and in support, copy of the bank statement of the assessee, the copy of passport of his son and a confirmation from his son was also submitted. The passport do reflect the relationship of father and son, however, the question is what are the circumstances which necessitated such transaction of sending money by way of gift from Melbourne on two different occasions. The so called confirmation letter which is undated, handwritten and the contents thereof only talks about transfer of money by a son to his father from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds of appeal: 1. That order passed u/s 263 of the Income Tax Act, 1961 by the Learned Principal Commissioner of Income Tax-1, Chandigarh is against law and facts on the file in as much she has failed to show as to how the assessment order passed by the Learned Assessing Officer is erroneous in as much as prejudicial to the interest of the Revenue. 2. That the Learned Pr. CIT was not justified to hold that the proper enquiries were not made by the learned Assessing Officer to confirm the realities of the investment actually claimed to have been made by the appellant on the basis of which deduction has been claimed whereas the appellant has neither made any investment nor claimed any deduction during the relevant assessment year. 3. That Learned Pr. CIT was not justified to set aside the assessment order to the file of the Learned Assessing Officer to pass fresh assessment order without coming to any firm conclusion as to how the order was erroneous in as much as prejudicial to the interest of the Revenue. 2. Briefly the facts of the case are that the assessee filed his return of income declaring total income of Rs. 12,20,350/- which was taken up for limited scrutiny ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Coordinate Pune Benches in case of Alfa Laval Lund Ab Vs. CIT [2022] 210 DTR 313 (Pune Trib). 2.4 It was further submitted by the ld AR that detailed investigation have been conducted by the AO during the course of assessment proceedings and therefore the order so passed by the AO cannot be set aside merely based on account of difference of opinion on the part of the Ld. Pr. CIT. In this regard, our reference was drawn to the notice under section 142(1) dt. 20/07/2018 wherein the AO has specifically asked the assessee to file date wise copy of the capital account and to explain the source of addition made to the capital account. In response to the said notice, it was submitted that the assessee vide his submission dt. 03/10/2018 has submitted that the addition in the capital account was on account of Rs. 2,20,43,305/- received as gift by the assessee from his son who is in Melbourne, Australia through NEFT made from Commonwealth Bank on 24/11/2015 and 04/12/2015 and in support, copy of the bank statement of the assessee was also furnished. 2.5 Further, our reference was drawn to the further query raised by the AO wherein the AO has asked the assessee to fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 5 of the impugned order, it was submitted that specific finding have been recorded by the ld PCIT regarding alleged receipt of gift by the assessee and failure on the part of the AO to carry out the necessary verification and in particular, verification of the credit worthiness of the said donor. It was accordingly submitted that the matter was thoroughly examined by the ld PCIT and after due application of mind, the order so passed by the AO has been set-aside and the contention of the ld AR regarding non-application of mind by the ld PCIT while passing the impugned order thus deserve to be dismissed. 3.1 Regarding the contention of the ld AR that the revision proceedings have been initiated on the basis of proposal received from the AO, it was submitted by the ld CIT/DR that it is not in dispute that a proposal has been sent by the AO for consideration of the ld PCIT and the same is a routine administrative practice in the department where such proposals are sent by the AO to the higher authorities. At the same time, it was submitted that it is incorrect to hold that the revision proceedings have been initiated merely based on the proposal sent by the AO. Our reference was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order so passed by the AO is erroneous in so far as prejudicial to the interest of the Revenue. 3.3 In support of his contentions, reliance was placed on the decision of Coordinate Delhi Benches in case of Anil Kumar Vs. ACIT[2005] 147 Taxman 5 (Mag.) (Delhi), as referred to by the ld PCIT in the impugned order, wherein it was held that the onus lay on the assessee to establish the identity of the person making gift and his capacity to make a gift and in that case, since the assessee failed to satisfactorily discharged the onus, the Tribunal has rightly held that the AO was not justified in accepting the gifts without making further inquiry about credit worthiness of the donors as well as source of funds. 3.4 Further reliance was placed on the decision of Hon ble Punjab Haryana High Court in the case of CIT Vs. Rippen Ahuja [2014] 49 taxmann.com 261 wherein it was held that where assessee except averring in his reply that donors were his family friends and had abundant source of income did not produce any evidence to prove genuineness of gift, Commissioner had rightly set aside assessment. 3.5 Further, reliance was placed on the decision of Allahabad High Court in case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PCIT. The contentions so advanced by the ld AR in this regard therefore cannot be accepted. 4.1 Coming to the other contention raised by the ld AR that the Ld. Pr. CIT(A) has initiated the revision proceedings under section 263 of the Act pursuant to proposal send by the AO, there is no suomotu examination of the assessment records by the Ld. Pr. CIT and therefore the very basis of initiating the proceedings under section 263 of the Act has been vitiated in the instant case. Before we examine the said contention in the context of facts of the present case, it would be relevant to refer to the well-established jurisprudence laid down by the Hon ble Courts in this regard from time to time. The Hon ble Calcutta High Court in case of Smt. Sumitra Devi Khirwal Vs. CIT (1972) 84 ITR 26 had an occasion to examine similar contention on behalf of the assessee in that case that where it was contended that the Commissioner did not himself call for any records but certain records were placed before him and he acted thereon and therefore, the whole proceedings are vitiated. The Hon ble High Court didn t agree with the said contention and held that merely because the records were put up b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same time, the Commissioner must apply his mind to the material placed before him and satisfy himself that it is a case where he ought to exercise his revisional power and the relevant findings of the Hon ble High Court read as under: We agree with Mr. Katju to this extent that merely because the Income-tax Officer placed certain information or material before the Commissioner and the Commissioner invoked his power under section 263, it cannot be said that the Commissioner has initiated the proceeding without applying his mind or that he has abdicated his function. After all, someone has to place the relevant material or information before the Commissioner. There is no bar to the Income-tax Officer bringing that material to the notice of the Commissioner. What cannot, however, be denied is that the Commissioner must apply his mind to the material placed before him and satisfy himself that it is a case where he ought to exercise his revisional power. Then he may issue a show cause notice and, after affording an opportunity to the affected parties, pass final orders. 4.3 In case of Alfa Laval Lund AB (Supra), we find that the Coordinate Pune Benches didn t have the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f possible). In response to this notice, the assessee filed copy of Passport of his son and confirmation regarding gift. 3. It is pertinent to mention here that there are three requirements/legs to be fulfilled by the assessee i.e. identify creditworthiness of the creditor and genuineness of the transaction as per section 68 of the I. T. Act, 1961. In the instant case, the assessee filed copy of passport of his son from whom gift received and confirmation from his son regarding gift. But the assessee did not file statement of bank account of his son from which amounts were transferred as gift. No information regarding creditworthiness of his son was filed except that he is engaged in door to door telemarketing in Melbourne. Even the Assessing Officer did not enquire about creditworthiness of lender/donor. The Assessing Officer even did not insist for statement of bank account of assessee's son. In the absence of these documents /information, creditworthiness of assessee's son is not proved which is required as per provisions of section 68 of I.T. Act, 1961. No further enquiries were made during assessment proceedings which led to underassessment for amounting to R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere the examination was limited to this particular matter. 4.7 In the instant case, we find that the AO has accepted the genuineness of the gift transaction on the basis of submission made by the assessee that an amount of Rs. 2,20,43,305/- has been received as gift from his son who is in Melbourne, Australia through NEFT from Commonwealth Bank on 24/11/2015 and 04/12/2015 and in support, copy of the bank statement of the assessee, the copy of passport of his son and a confirmation from his son was also submitted. The question is whether the submissions so made and the documents so submitted establish the genuineness of the gift transaction. As we have stated earlier, the fact that the money has been remitted through the Commonwealth bank account and has been received in the assessee s bank account doesn t establish the nature of the gift transaction rather it only demonstrate the mode and manner of making the payment. The passport do reflect the relationship of father and son, however, the question is what are the circumstances which necessitated such transaction of sending money by way of gift from Melbourne on two different occasions. The so called confirmation letter which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction and it is clearly not a question of arriving at a different conclusion by the ld PCIT than what has been arrived at by the AO. No doubt the AO has mentioned about this transaction in the assessment order, however, merely stating that he has examined the transaction and being satisfied, he didn t drawn any adverse inference, doesn t debar the ld PCIT from highlighting the fact that the order so passed by the AO is not in accordance with law having failed to examine one of the essential ingredients being the creditworthiness of the donor. It is not the mode and manner of examination by the AO which is being highlighted by the ld PCIT rather the ld PCIT is highlighting what is an essential attribute of the transaction which require examination as per established legal principles and the nonexamination thereof leading to the passing of the erroneous order by the AO. 4.10 In light of aforesaid discussions and in the entirety of facts and circumstances of the case, the grounds taken by the assessee are dismissed and the matter is decided in favour of the Revenue and against the assessee. 5. In the result, appeal of the assessee is dismissed. Order pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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