Nirmal Rani, Ambala City V. DCIT, Ambala City

ITA 1075/CHANDI/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8285 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-07-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 26-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Unexplained cash credit; Gift; Source of fund; Question of law; Tangible material
• Section: 56; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1075/CHD/2013 (ASSESSMENT YEAR : 2010-11) NIRMAL RANI VS. THE D.C.I.T., PROP. M/S VIKING TANNERS, AMBALA CITY. AMBALA CITY. PAN: ACUPR5354A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT GOEL RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 23.11.2016 DATE OF PRONOUNCEMENT : 22.02.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), PANCHKULA DATED 25.09.2013, RELATING TO ASSESSMENT YEAR 2011-12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL : 1. 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 WITHOUT APPRECIATING THE FACT THAT BOTH THE DONORS, REAL BROTHERS OF THE ASSESSEE , COVERED BY THE DEFINITION OF RELATIVE U/S 56(L)(VI) O F THE ACT, DULY CONFIRMED HAVING GIVEN THE GIFTS. 2 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ID. CIT(A)IS NOT JUSTIFIED WHILE CONCLUDING THAT 'THERE IS NO EVIDENCE BEFORE ME EVEN TO SUBSTANTIATE THE RELATIONSHIP OF THE DONOR' IGNORING THE DOCUMENTARY EVIDENCE ALREADY 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 CREDIT ED IN THE BANK ACCOUNT OF THE APPELLANT' IGNORING THE FAC T 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 HEAR D AND DISPOSED OFF. 3. THE ONLY ISSUE IN THE PRESENT APPEAL PERTAINS T O ADDITION MADE U/S 68 OF THE INCOME TAX ACT, 1961 (I N SHORT THE ACT) ON ACCOUNT OF GIFTS RECEIVED BY TH E ASSESSEE AMOUNTING IN ALL TO RS.45 LACS. 4. BRIEF FACTS RELATING TO THE ISSUE ARE THAT DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD RECEIVED GIFTS AMOUNTING TO RS.45 LACS FROM HER BROTHERS NAMELY SH RI TARSEM KUMAR, SON OF LATE SHRI AMAR NATH, RESIDENT OF EVERGREEN WAY HAYES, UNITED KINGDOMM, AMOUNTING TO RS.33 LACS AND SHRI PIRTHI CHAND, SON OF LATE SHRI AMAR NATH, RESIDENT OF 6A, CREMONIA NO.84, CREMA CAP 260 13, PROV. CREMONA, ITALY AMOUNTING TO RS.12 LACS. THES E GIFTS WERE RECEIVED THROUGH NRE ACCOUNTS MAINTAINED BY TH E 3 ABOVE PERSONS IN INDIAN BANK, AMBALA CANTT. THE ASSESSEE FILED CONFIRMATIONS ON PLAIN PAPER ALONGWI TH COPIES OF PASSPORT FROM THESE PERSONS DURING THE CO URSE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER ASKE D THE ASSESSEE TO FURTHER FURNISH THE FOLLOWING INFORMATI ON IN RESPECT OF THE PERSONS FROM WHOM THE ALLEGED GIFTS WERE RECEIVED : I) COPIES OF THE RETURNS OF INCOME OF THE PERSONS FROM WHOM THE SO CALLED GIFTS WERE RECEIVED. II) THE SOURCES OF INCOME OF THE DONOR ABROAD. III) CAPACITY OF THE DONOR TO GIVE THE GIFT. IV) COPY OF BANK ACCOUNT MAINTAINED BY THE DONOR ABROAD. 5. NO DOCUMENTARY EVIDENCE WAS FILED BY THE ASSESSEE. THE ASSESSING OFFICER, THEREFORE, TREATE D THE SAID GIFTS AS UNEXPLAINED MONEY OF THE ASSESSEE U/S 68 OF THE ACT AND MADE AN ADDITION OF RS.45 LACS TO THE I NCOME OF THE ASSESSEE. 6. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE STATED THAT SHE HAD DISCHARGED HER ONUS OF EXPLAINI NG THE GIFTS RECEIVED BY HER BY WAY OF FILING CONFIRMATION S OF THE DONORS, BANK STATEMENTS AND COPIES OF THE PASSPORT OF THE DONORS, CONFIRMATION LETTERS FROM THE BANK THAT THE SAID GIFTS WERE MADE FROM NRE ACCOUNTS OF THE DONORS. T HE ASSESSEE STATED THAT THE DONORS WERE HER REAL BROTH ERS AND IN VIEW OF THE FACT THAT ALL NECESSARY EVIDENCE S TO 4 PROVE THAT THE SAID AMOUNTS HAD BEEN RECEIVED FROM HER BROTHERS BY WAY OF GIFTS FROM THEIR SOURCES OF INCO ME WERE FILED BY THE ASSESSEE, NO ADDITION U/S 68 OF THE AC T COULD BE MADE. THE ASSESSEE ALSO EXPLAINED THE SOURCE OF INCOME OF HER TWO BROTHERS, AS THE ELDER BROTHER SH RI TARSEM KUMAR, BEING IN THE BUSINESS OF CONSTRUCTION , EARNING 2000 POUNDS PER MONTH AND ANOTHER BROTHER S HRI PIRTHI CHAND DOING JOB WITH A DAIRY MILK COMPANY SI NCE LAST 13 YEARS EARNING 2000 EURO PER MONTH. THE ASS ESSEE FURTHER STATED THAT THE SAID AMOUNT HAVING BEEN REC EIVED BY WAY OF GIFT FROM BROTHERS, THE SAME WERE EXEMPT U/S 56 OF THE ACT. THE LD. CIT (APPEALS) REJECTED THE CONTENTION OF THE ASSESSEE AND STATED THAT THE SAID AMOUNT WAS NOT IN THE NATURE OF A GIFT SINCE NO SUC H GIFTS HAD BEEN MADE TO THE ASSESSEE BY HER BROTHERS IN TH E PAST, NOR HAD THE BROTHERS GIVEN ANY SUCH GIFT TO A NY OTHER PERSON AND ALSO FOR THE REASON THAT THERE WAS NO OCCASION TO GIVE THE GIFT AND EVEN THE ASSESSEE HAD NEVER GIFTED ANYTHING TO HER BROTHERS. THE LD. CIT (APPE ALS) STATED THAT BASED ON THESE FACTS, IT WAS HIGHLY IMP ROBABLE THAT WITHOUT ANY OCCASION THE BROTHERS COULD ADVANC E 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) FU RTHER STATED THAT FOUR DOCUMENTARY EVIDENCES REQUIRED BY THE ASSESSING OFFICER HAD NEVER BEEN FILED BY THE ASSES SEE AND FURTHER NO EVIDENCE IN REGARD TO THE CAPACITY OF TH E DONOR 5 HAD BEEN PRODUCED. THEREFORE, THE LEARNED CIT (APP EALS) HELD THAT THE ASSESSEE HAD FAILED TO PROVE THE GENU INENESS OF THE NATURE OF THE TRANSACTIONS AND FOUND THE EXPLANATION OF THE ASSESSEE TO BE UNSATISFACTORY AN D, THEREFORE, UPHELD THE ACTION OF THE ASSESSING OFFIC ER IN TREATING THE SAID GIFTS AS UNEXPLAINED UNDER SECTIO N 68 OF THE ACT. THE LEARNED CIT (APPEALS) RELIED ON A NUM BERS 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 THE LD. COUNSEL OF THE ASSESSEE VEHEMENTLY ARGUED THAT THE ONUS CAST ON THE ASSESSEE TO EXPLAIN THE G IFTS RECEIVED, HAD BEEN DULY DISCHARGED BY WAY OF FILING THE FOLLOWING DOCUMENTS : I) PASSPORTS OF THE DONORS PLACED AT PAPER BOOK PAGE NOS.16 & 17 PROVING THE IDENTITY OF THE DONORS. II) COPIES OF BANK ACCOUNTS OF THE DONORS FROM WHICH THE GIFT WAS GIVEN, BEING NRE ACCOUNTS, PLACED AT PAPER BOOK PAGE NOS.20 & 21 SHOWING THE GENUINENESS OF THE GIFT AND CAPACITY OF THE DONORS. III) CERTIFICATE FROM INDIAN BANK CERTIFYING TRANSF ER FROM NRE ACCOUNT PLACED AT PAPER BOOK PAGE NOS. 18 & 19 AGAIN PROVING THE GENUINENESS AND CAPACITY OF THE DONORS. IV) CONFIRMATION OF THE SAID GIFTS FROM THE DONOR S PLACED AT PAPER BOOK PAGE NO.14 &15. 6 8. THE LD. COUNSEL OF THE ASSESSEE FURTHER STATED THAT THE SOURCE AND CAPACITY OF THE DONORS HAD BEEN DULY PROVED BY THE BALANCE APPEARING IN THEIR NRE BANK ACCOUNTS. THE LD. COUNSEL OF THE ASSESSEE ALSO POI NTED OUT THAT IN THE CASE OF SHRI TARSEM KUMAR HIS NRE ACCOUNT SHOWS A OPENING BALANCE OF RS.33,40,059/- W HICH WAS ENOUGH TO MAKE THE GIFT OF RS.33 LACS TO HIS SI STER, THE ASSESSEE AND ALSO POINTED OUT THAT THERE WERE N O DEPOSITS DURING THE YEAR IN THIS ACCOUNT OF SHRI TA RSEM KUMAR. THEREFORE, IN VIEW OF THESE FACTS, THE LD. COUNSEL OF THE ASSESSEE STATED THAT THE GIFTS HAVING BEEN M ADE FROM THE BALANCES RELATING TO PRECEDING YEARS, NO A DDITION COULD BE MADE ON ACCOUNT OF THE INCOME OF THE ASSES SEE FOR THE CURRENT YEAR. FURTHER, THE LD. COUNSEL OF THE ASSESSEE DISTINGUISHED THE CASE LAWS RELIED ON BY T HE REVENUE WHILE SUPPORTING THE ORDER OF THE LEARNED C IT (APPEALS). THE LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. J.J. DEVELOPMENT (P) LTD., 519/2008 IN SUPPORT OF I TS CONTENTION THAT THE GIFTS GIVEN FROM OPENING BALANC ES APPEARING IN THE BANK ACCOUNTS CANNOT BE TREATED AS UNDISCLOSED INCOME OF THE CURRENT YEAR. 9. THE LEARNED D.R., ON THE OTHER HAND RELIED UPON THE ORDER OF THE LEARNED CIT (APPEALS) AND STATED T HAT THE CAPACITY OF THE DONOR HAD NOT BEEN PROVED IN THE PR ESENT CASE. THE LEARNED D.R. POINTED OUT THAT THE ASSESS EE HAD NOT SUPPLIED THE COPIES OF BANK STATEMENTS OF THE D ONORS 7 IN THEIR COUNTRIES OF RESIDENCES AS ALSO COPIES OF THEIR INCOME TAX RETURNS FILED THERE, WHICH WAS SPECIFICA LLY ASKED TO THE ASSESSEE TO PROVE THE GENUINENESS OF T HE TRANSACTIONS AS ALSO THE CAPACITY OF THE DONORS. T HE LEARNED D.R., THEREFORE, STATED THAT THE ASSESSEE H AD NOT DISCHARGED ITS ONUS AS CONTEMPLATED UNDER SECTION 6 8 OF THE ACT AND, THEREFORE, THE ADDITION MADE BY THE AS SESSING 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 JA SPAL SINGH VS. CIT, 290 ITR 306 AND THE DECISION OF THE CHANDIGARH BENCH OF THE ITAT IN THE CASE OF SMT. AN ITA AGGARWAL VS ITO REPORTED IN 61 TAXMANN.COM 337. TH E 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 TH E ASSESSING OFFICER WHICH SHOWED THE NAMES OF PARENTS OF THE DONORS ,ADEQUATELY PROVED THAT THEY WERE BROTHE RS OF THE ASSESSEE. THE LD. COUNSEL OF THE ASSESSEE FURT HER RELIED UPON THE ORDER OF THE JURISDICTIONAL HIGH CO URT IN THE CASE OF CIT VS. JAWAHAR LAL OSWAL IN ITA NO.49 OF 1999 DATED 29.1.2016. 11. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES, PERUSED THE DOCUMENTS PRODUCED BEFORE US A S 8 ALSO THE ORDERS OF THE AUTHORITIES BELOW. THE ISSU E BEFORE US IN THE PRESENT APPEAL PERTAINS TO ADDITION BEING MADE UNDER SECTION 68 OF THE ACT, WHICH REQUIRES THE ASS ESSEE TO SATISFACTORILY EXPLAIN THE NATURE AND SOURCE OF ANY SUM FOUND CREDITED IN THE BOOKS OF THE ASSESSEE. THE O NUS IS ON THE ASSESSEE TO OFFER A SATISFACTORY EXPLANATION OF THE CREDITS AND IT IS WELL SETTLED THAT IN ORDER TO DIS CHARGE THE ONUS THE ASSESSEE MUST PROVE THE FOLLOWING : I) IDENTITY OF THE CREDITOR II) CAPACITY OF THE CREDITOR TO ADVANCE MONEY AND III) GENUINENESS OF THE TRANSACTION 12. IN THE PRESENT CASE, THE EXPLANATION OFFERED B Y THE ASSESSEE RELATING TO THE CASH CREDIT OF RS.45 L ACS IS THAT THEY WERE GIFTS RECEIVED FROM HER TWO BROTHERS S/SHRI TARSEM KUMAR AND PIRTHI CHAND. AS EVIDENCE OF THE SAME THE ASSESSEE FILED THE FOLLOWING DOCUMENTS : I) COPIES OF THE PASSPORTS OF THE DONORS II) COPIES OF NRE ACCOUNTS OF DONORS FROM WHICH THE GIFTS WERE GIVEN. III) CERTIFICATE FROM BANK STATING THAT THE SAID AMOUNT WAS TRANSFERRED FROM NRE ACCOUNTS OF THE DONORS. IV) CONFIRMATIONS FROM THE DONORS THAT THEY HAD GIVEN THE GIFTS OF THE SAID AMOUNTS TO THEIR SISTER, THE ASSESSEE. 13. IT IS THE CONTENTION OF LD. COUNSEL OF THE ASSESSEE THAT THE ONUS CAST ON THE ASSESSEE TO EXPL AIN THE AFORESAID CASH CREDIT HAS BEEN DULY DISCHARGED BY W AY OF 9 FILING THE ABOVE EXPLANATION AND DOCUMENTS SINCE TH EY ADEQUATELY PROVE THAT THE SAID AMOUNT WERE GIFTS R ECEIVED BY THE ASSESSEE FROM HER BROTHERS THROUGH THEIR BAN K ACCOUNTS. THE LD.COUNSEL HAS CONTENDED THAT THE FAC T THAT THE SAID AMOUNT WAS RECEIVED FROM SHRI TARSEM KUMAR AND PIRTHI CHAND IS NOT DISPUTED. THE IDENTITY OF THE DONORS IS PROVED BY THEIR COPIES OF PASSPORTS PLACE D BEFORE THE LOWER AUTHORITIES. THE RELATIONSHIP OF THE DONO RS WITH THE ASSESSEE OF BEING BROTHERS IS PROVED BY THE NAM E OF PARENTS APPEARING IN THEIR RESPECTIVE COPIES OF PAS SPORTS, WHICH IS IDENTICAL AND ALSO THE CONFIRMATION OF THE DONORS WHICH STATES SO. THAT THE SAID AMOUNT WAS GIVEN BY WAY OF GIFT IS PROVED BY THE FACT THAT THE DONORS CONFI RMED SO, WHICH IS FURTHER CORROBORATED BY THE FACT THAT THE DONORS WERE HER BROTHERS AND IN SUCH A RELATIONSHIP THE GI FTS ARE GIVEN IN THE NORMAL COURSE. FURTHER THE GENUINEN ESS OF THE TRANSACTION AND THE CAPACITY OF THE DONORS TO M AKE THE GIFTS, IS PROVED BY THE FACT THAT THE AMOUNT HA S 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 AGREEME NT THAT THE ASSESSEE HAS DULY EXPLAINED THE SUM RECEIV ED BY HER AS ALSO THE NATURE AND SOURCE OF THE AMOUNT REC EIVED. THE IDENTITY OF THE CREDITOR/DONOR, WE FIND IS NOT IN DISPUTE IN THE PRESENT CASE. THE RELATIONSHIP WITH THE 10 DONORS IS PROVED BY THE IDENTICAL NAME OF PARENTS REFLECTED IN THEIR RESPECTIVE COPIES OF PASSPORTS A ND FURTHER CORROBORATED BY THE CONFIRMATIONS FILED BY THE DONORS. THE NATURE OF THE AMOUNT ALSO CANNOT BE CAL LED IN QUESTION SINCE IT IS ABSOLUTELY NORMAL FOR BROTHERS TO GIVE GIFTS TO SISTERS AND THERE IS NO REASON AT ALL TO D ISBELIEVE THE SAME MERELY BECAUSE NO GIFTS WERE GIVEN IN THE PAST. THE ONLY ASPECT REMAINING IS REGARDING THE CAPACIT Y OF THE DONORS TO MAKE THE IMPUGNED GIFT AS ALSO THE GENUINENESS OF THE SAID GIFT HAVING NOT BEEN ADEQUA TELY PROVED BY THE ASSESSEE AND THE REASON GIVEN BY THE REVENUE FOR THE SAME IS THAT THE ASSESSEE DID NOT FILE THE COPIES OF INCOME TAX RETURNS OF THE DONORS AND ALSO THE COPIES OF THE BANK STATEMENTS OF THE DONORS MAINTAI NED IN THE COUNTRIES OF THEIR RESIDENCES I.E. U.K AND ITAL Y WHERE THE TWO BROTHERS STAYED. 15. AS FOR THE CAPACITY OF THE DONORS TO MAKE THE GIFT, IT IS NOT DISPUTED THAT THE SAID GIFTS HAVE B EEN MADE FROM NRE ACCOUNT OF THE DONORS IN INDIAN BANK, AMBA LA. ON GOING THROUGH THE BANK ACCOUNTS, WE FIND THAT TH ERE WAS ENOUGH BALANCE IN BOTH THE ACCOUNTS TO MAKE THE SAID GIFTS TO THEIR SISTER. IN THE CASE OF SHRI TARSEM KUMAR, WE FIND THAT THERE WAS AN OPENING BALANCE OF RS.33,40, 059/- IN THE BEGINNING OF THE YEAR. THE GIFT GIVEN BY SH RI TARSEM KUMAR TO THE ASSESSEE IS RS.33 LACS. FURTHE R THERE ARE NO DEPOSIT IN THIS BANK ACCOUNT DURING TH E YEAR. WHAT EMERGES, THEREFORE, IS THAT THE GIFT HAS BEEN MADE 11 FROM THE OPENING BALANCE, IN THE NRE ACCOUNT OF THE DONOR MEANING THEREBY THAT IN THE FIRST PLACE THERE WAS SUFFICIENT BALANCE WITH THE DONOR TO MAKE THE GIFT AS AT THE BEGINNING OF THE YEAR ITSELF WHICH ADEQUATELY P ROVES THE CAPACITY OF THE DONOR TO MAKE THE GIFT. COUPLED WITH IT, THE FACT THAT NO SUM WAS CREDITED IN THE SAID A CCOUNT DURING THE YEAR, WE AGREE WITH THE LD. COUNSEL OF T HE ASSESSEE THAT NO ADDITION ON ACCOUNT OF UNDISCLOSED INCOME IN ANY CASE CAN BE MADE IN THE IMPUGNED YEAR SINCE THE SAID GIFTS RECEIVED CANNOT BY ANY STRETCH OF IMAGINATION BE ATTRIBUTED TO ANY INCOME EARNED DURI NG THE YEAR. 16. AS FOR GIFT RECEIVED FROM SH.PIRTHI CHAND, PERUSAL OF HIS BANK ACCOUNT PLACED AT PAPER BOOK PA GE NO.20 SHOWS THAT THERE WAS AN OPENING BALANCE OF RS.9531/- DURING THE YEAR, WHICH INCREASED TO RS.12,97,493/- ,BEFORE THE GIFTS WERE MADE, BY WAY OF FOUR DEPOSITS MADE IN THE SAID ACCOUNT, AND NONE OF WHIC H WERE CASH DEPOSITS. IT WAS OUT OF THIS BALANCE OF RS.12,97,493/- THAT THE GIFT OF RS.12 LACS WAS GIVE N TO THE ASSESSEE. EVEN THEREAFTER, WE FIND THAT THERE HAS BEEN DEPOSITS AMOUNTING APPROXIMATELY TO RS.30 LACS IN T HE SAID ACCOUNT DURING THE YEAR, NONE OF WHICH ARE CAS H DEPOSITS. CLEARLY, THE AVAILABILITY OF RS.12,97,49 3/- IN THE SAID BANK ACCOUNT, BEFORE THE GIFT WAS MADE BEI NG ESTABLISHED AND NONE OF WHICH CAN BE ATTRIBUTED TO ANY CASH DEPOSITS IN THE SAID ACCOUNT AND ALSO THE FACT THAT 12 NONE OF THE CREDITS IN THE SAID ACCOUNT HAVE EVEN R EMOTELY BEEN LINKED TO THE ASSESSEE IN ANY WAY, WE HOLD THA T THE ENTIRE AMOUNT IN THE SAID ACCOUNT CAN SAFELY BE SAI D TO BELONG TO THE DONOR, THUS, PROVING HIS CAPACITY TO MAKE THE SAID GIFT, AS ALSO THE GENUINENESS OF THE TRANS ACTION. 17. IN VIEW OF THE ABOVE, THE IDENTITY OF THE DONO RS NOT BEING IN DISPUTE AND THE GENUINENESS OF THE GIF T AS ALSO THE CAPACITY OF THE DONORS TO MAKE THE SAID GI FTS HAVING BEEN PROVED BY THE ASSESSEE AND FURTHER THER E BEING NO TANGIBLE MATERIAL WITH THE REVENUE WHICH M AY 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 TH E LD.COUNSEL FOR THE ASSESSEE ON THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS 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 RE CORD, THAT THE GIFT GIVEN IS GENUINE, WOULD ESSENTIALLY BE A Q UESTION OF FACT. MAY BE, THAT IF IN ARRIVING AT A CONCLUSIO N EITHER WAY, ON THIS ASPECT, ANY RELEVANT MATERIAL IS IGNOR ED, OR IRRELEVANT MATERIAL IS CONSIDERED, OR THERE IS MISR EADING, OR NON-READING OF RECORD, THEN IT MAY, OF COURSE, GIVE RISE TO SUBSTANTIAL QUESTION OF LAW. IN THE PRESENT CASE, I DENTITY OF ALL THE DONORS IS NOT IN DISPUTE, THE TRANSACTIO NS HAVE BEEN CHANNELIZED THROUGH BANK, AND FOUR OF THE GIFT S ARE BY THE BLOOD RELATIONS, APART FROM THE FACT, THAT B LOOD RELATIONSHIP IS NOT NECESSARY. THERE IS NO TANGIBLE MATERIAL, COLLECTED BY THE AO, TO SHOW ANYTHING, WH ICH MAY CAST ANY DOUBT ON THE GENUINENESS OF THE GIFTS, OR TO ESTABLISH, THAT THE PURPORTED TRANSACTIONS OF GI FTS, WERE OTHERWISE TRANSACTIONS OF MONEY LAUNDERING, OR THE LIKE. IN THAT VIEW OF THE MATTER, SINCE THE AUTHORI TIES BELOW, I.E. CIT(A) AND THE TRIBUNAL, HAVE EXAMINED THE MAT TER ON CORRECT PARAMETERS, AND HAVE ARRIVED AT A CONCLUSIO N, IN FAVOUR OF THE ASSESSEE, THE FINDINGS DO NOT REQUIRE ANY INTERFERENCE. 13 18. THE DECISION OF THE HONBLE DELHI HIGH COURT I N THE CASE OF CIT VS SURESH KUMAR KAKKAR (2010) 324 I TR 231,RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE , REITERATES THE ABOVE PROPOSITION AS FOLLOWS AT PARA 3 & 4 OF THE ORDER: 3. INSOFAR AS THE IDENTITY IS CONCERNED, THAT IS AN AD MITTED POSITION THAT THE GIFTS WERE MADE BY THE MOTHER TO THE SON. WITH REGARD TO THE CREDITWORTHINESS, THE ASSESSEE H AS BEEN ABLE TO DISCHARGE THE ONUS CAST UPON HIM BY FURNISHING THE BANK STATEMENT OF HIS MOTHER (DONOR) AS ALSO THE CONFIRMATION CERTIFICATE FROM THE MOTHE R CONFIRMING THE SAID GIFTS. ONCE THE ASSESSEE HAS DISCHARGED THE PRIMARY ONUS, WHICH WAS CAST UPON T HE ASSESSEE, IT WAS INCUMBENT UPON THE AO TO PROVE ON THE BASIS OF A COGENT EVIDENCE THAT THE TRANSACTION WAS NOT GENUINE. THERE IS NO SUCH EVIDENCE FORTHCOMING. WE FIN D THAT THE CONCLUSIONS OF THE AO AND THE CIT(A) WITH REGARD TO THE GENUINENESS OF THE TRANSACTIONS ARE MERELY CONJECTURAL AND ARE BASED ON SURMISES AND ASSUMPTIO NS. SUCH CONJECTURES AND ASSUMPTIONS CANNOT TAKE THE PL ACE OF PROOF, ONCE THE ASSESSEE HAS DISCHARGED THE PRIM ARY BURDEN WHICH HAD BEEN CAST UPON HIM. 4. THE TRIBUNAL HAS CORRECTLY CONCLUDED THAT THE AUTHO RITIES BELOW HAD IGNORED THE FACT THAT THERE WAS A BLOOD RELATIONSHIP (MOTHER-SON) BETWEEN THE DONOR AND THE DONEE; THAT THE GIFTS ARE NORMALLY MADE BY PARENTS TO CHILDREN THROUGH LOVE AND AFFECTION AND DO NOT NECESSARILY REQUIRE ANY PARTICULAR OCCASION; THAT T HE GIFTS IN THE PRESENT CASE WERE ALL MADE BY CHEQUES AND THROU GH BANKING CHANNELS. THE TRIBUNAL HELD THAT WHEN THE IDENTITY AND THE CAPACITY ARE PROVED BEYOND DOUBT A ND THE SOURCE OF THE GIFTS WAS THE MOTHER, THERE WAS NO QUESTION OF MAKING THE ADDITION UNDER S. 68 OF THE 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 COUNT RIES OF RESIDENCES. AS STATED ABOVE, THE BANK ACCOUNTS FRO M WHICH THE STATED GIFTS HAVE BEEN GIVEN ARE NRE ACCO UNTS. 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. 14 FURTHER THERE ARE ENOUGH DEPOSITS IN THE SAID ACCOU NTS TO MAKE THE IMPUGNED GIFTS. WHEN THE AVAILABILITY OF FUNDS HAS BEEN ADEQUATELY PROVED, THE CAPACITY OF THE DON ORS TO MAKE THE GIFTS ALSO STANDS PROVED. BY ASKING THE A SSESSEE TO FILE COPIES OF THE INCOME TAX RETURNS AND ALSO T HEIR BANK STATEMENTS IN THEIR COUNTRY OF RESIDENCE, THE REVENUE IS INDULGING IN THE EXERCISE OF VERIFYING T HE SOURCE OF THE SOURCE WHICH IS SETTLED LAW, CANNOT B E DONE IN THIS CASE. THE ONUS TO EXPLAIN THE CREDIT BEING ON THE ASSESSEE, REFLECTS THE GENERAL RULE OF LAW OF EVIDE NCE CODIFIED IN SECTION 106 OF THE EVIDENCE ACT, 1872, ,AS PER WHICH THE SOURCE OF INCOME IS A MATTER WITH THE EXC LUSIVE KNOWLEDGE OF THE ASSESSEE WHICH HE HAS TO PROVE AND DEMONSTRATE. IT IS FOR THIS REASON ONLY THAT THE S OURCE OF SOURCE, WHICH IS NOT WITHIN THE KNOWLEDGE OF THE AS SESSEE AT ALL, IS NOT REQUIRED TO BE PROVED BY THE ASSESSE E. THE HONBLE PUNJAB AND HARYANA HIGH COURT, WHILE DEALIN G WITH AN IDENTICAL ISSUE IN THE CASE OF CIT VS JAWAH ARLAL OSWAL IN ITA NO.49 OF 1999, DT: 29-01-2016, HAS CATEGORICALLY HELD AT PG 27 OF ITS ORDER:, AN ARRANGEMENT BETWEEN A DONOR AND ANOTHER IS AN ARRANGEMENT BETWEEN THE DONOR AND HIS SOURCE OF MONEY. THE ONUS TO PROBE AND PROVE THIS ASPECT LIES UPON THE REVENUE AND NOT UPON THE ASSESSEE, PARTICULARLY WHERE THE INCOME IS BEING DEALT WITH UNDER A DEEMING PROVISION. A PERSON WHO RECEIVES A GIFT, IS NOT REQUIRED TO PROVE THE SOURCE OF THE MONEY OF HIS DONOR 15 20. THE ADDITION WE FIND HAS BEEN MADE MERELY ON THE BASIS OF SUSPICION, WITHOUT ANY IOTA OF EVIDENC E TO EVEN LEAD TO THE FACT THAT THE AMOUNT RECEIVED AS G IFTS WERE ACTUALLY THE ASSESSEES INCOME ONLY. THIS CANNO T BE THE BASIS OF MAKING AN ADDITION UNDER A DEEMING PROVISION, SECTION 68 IN THE PRESENT CASE. THE HON BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF JAWAHA R LAL OSWAL (SUPRA) HAS DEALT WITH THE SAID ISSUE AS FOLLOWS: A DEEMING PROVISION REQUIRES THE ASSESSING OFFICER TO. COLLECT RELEVANT FACTS AND THEN CONFRONT THE ASSESS EE, WHO IS THEREAFTER, REQUIRED TO EXPLAIN INCRIMINATING FACTS AND IN CASE HE FAILS TO PROFFER A CREDIBLE INFORMATION, THE A SSESSING OFFICER MAY VALIDLY RAISE AN INFERENCE OF DEEMED IN COME UNDER SECTION 69-A OF THE ACT. AS ALREADY HELD, IF TH E ASSESSEE PROFFERS AN EXPLANATION AND DISCLOSES ALL RELE VANT FACTS WITHIN HIS KNOWLEDGE, THE ONUS REVERTS TO THE R EVENUE TO ADDUCE EVIDENCE AND ONLY THEREAFTER, MAY AN INFERENC E BE RAISED, BASED UPON RELEVANT FACTS, BY INVOKING THE DEEMING PROVISIONS OF SECTION 69-A OF THE ACT. IT IS TRUE T HAT INFERENCES AND PRESUMPTIONS ARE INTEGRAL TO AN ADJUD ICATORY PROCESS BUT CANNOT BY THEMSELVES BE RAISED TO THE S TATUS OF SUBSTANTIAL EVIDENCE OR EVIDENCE SUFFICIENT TO R AISE AN INFERENCE. A DEEMING PROVISION, THUS, ENABLES THE R EVENUE TO RAISE AN INFERENCE AGAINST AN ASSESSEE ON THE BASIS OF TANGIBLE MATERIAL AND NOT ON MERE SUSPICION, CONJECTU RES OR PERCEPTIONS. IT WOULD ALSO BE NECESSARY TO REITERATE TH AT IT IS NOT PERCEPTIONS BUT CONCRETE FACTS THAT UNDERLINE Q UASI JUDICIAL DETERMINATIONS AND WHERE CONCRETE FACTS ARE NOT AVAILABLE, RELEVANT FACTS, AS WOULD RAISE A CREDIBL E INFERENCE OF CULPABILITY REQUIRING AN ASSESSEE TO R EBUT THE INFERENCE SO RAISED. MORE OFTEN THAN- NOT, REVENUE AU THORITIES, FOR WANT OF RELEVANT MATERIAL, INSTITUTE 'INQUISITIONS' , AS OPPOSED TO INQUIRIES AND BY ADDRESSING QUESTIONS THAT TH E 16 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 DECISI ON OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF JAS PAL SINGH VS CIT 290 ITR 306 ,IS DISTINGUISHABLE SINCE IN THE SAID CASE THERE WAS NO RELATIONSHIP BETWEEN THE DON OR OF THE GIFT AND THE ASSESSEE AND EVEN THE IDENTITY OF THE DONOR WAS NOT FOUND TO HAVE BEEN PROVED.THE CASE OF ANITA AGGARWAL VS ITO 61 TAXMANN.COM 337, RELIED UP ON BY THE LD.DR, WE FIND IS ALSO DISTINGUISHABLE ON FA CTS SINCE IN THE SAID CASE THE ASSESSEE HAD FAILED TO P RODUCE THE DONORS FOR VERIFICATION AND THE SUMMONS ISSUED TO THEM HAD BEEN RECEIVED BACK UNSERVED. ALSO THE ASSE SSEE IN THE SAID CASE HAD EXPRESSED HER INABILITY TO FIL E CONFIRMATION OF THE DONORS AND IT WAS ALSO FOUND TH AT 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 THE ASSESSEE HAS FAILED TO PROVE THE CAPACITY AND GENUINENESS OF THE TRANSACTION BY NOT FILING THE COPIES OF INCOME TAX RETURNS AS ALSO COPIES OF BANK STATEMENTS OF THE DONORS IN THEIR COUNTRIES OF RESI DENCES. 23. IN VIEW OF THE ABOVE, WE HOLD THAT THE ASSESSE E HAS ADEQUATELY DISCHARGED ITS ONUS OF PROVING IDENT ITY OF THE DONOR, CAPACITY OF THE DONOR AS ALSO THE GENUIN ENESS OF THE TRANSACTION BEING IN THE NATURE OF GIFT RECE IVED FROM 17 BROTHERS AND, THEREFORE, THERE IS NO REASON TO MAKE ANY ADDITION UNDER SECTION 68 ON ACCOUNT OF UNEXPLAINED CREDIT. THE ADDITION SO MADE OF RS. 45,00,000/-, IS THEREFORE, DELETED. 24. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22 ND FEBRUARY, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH