The ITO, Ward-2(6), Baroda V. Smt. Seema A.Modani, Baroda

ITA 1564/AHD/2011

• Counselvise Citation: 156420514 RSA 2011
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 03-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Unexplained cash credit; Gift; Difference of opinion; Reassessment proceedings
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND B. P. JAIN, A M) ITA NO. 1564/AHD/2011 A. Y.: 2004-05 THE INCOME TAX OFFICER, WARD 2 (6), BARODA, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA VS SMT. SEEMA ANIL MODANI, C/O. SHIR G. L. MAHESHWARI, C-2, VARDHMAN PARK, OPP. RAJESH APARTMENT, GOTRI ROAD, BARODA PA NO. ACIPM 0760 H (APPELLANT) (RESPONDENT) APPELLANT BY SHRI B. L. YADAV, DR RESPONDENT BY SHRI MUKUND BAKSHI, AR DATE OF HEARING: 21-12-2011 DATE OF PRONOUNCEMENT: 30-12-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)- I I, BARODA DATED 15 TH MARCH, 2011, FOR ASSESSMENT YEAR 2004-05, CHALLENGI NG THE DELETION OF ADDITION OF RS.25.05 LACS MADE U/S 68 OF THE IT ACT ON ACCOUNT OF UNEXPLAINED CASH CREDITS (GIFTS). 2. BRIEFLY, THE FACTS OF THIS CASE ARE THAT RETURN OF INCOME WAS FILED ON 18-10-2004 DECLARING TOTAL INCOME OF RS.1,68,480 /-. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF SHARES AND ALSO DERIVING INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SO URCES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE AO THAT ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 2 THE ASSESSEE HAD SHOWN GIFT OF RS.25,05,000/- DURIN G THE YEAR FROM MR. SHYAMSUNDAR VALLABHALI OF UAE. SINCE THE ASSESS EE NEITHER PROVED THE IDENTITY NOR CREDITWORTHINESS OF THIS DO NOR, THE AMOUNT WAS ADDED U/S 68 OF THE IT ACT. THE ADDITION WAS CONFIR MED BY THE LEARNED CIT(A). THE ASSESSEE FILED APPEAL BEFORE THE ITAT A ND PRODUCED SOME ORIGINAL DOCUMENTS BEFORE THE ITAT. SINCE THES E WERE NOT PRODUCED BEFORE THE AO THE MATTER WAS SET ASIDE TO BE EXAMINED BY TH4E AO AFRESH AFTER LOOKING INTO ALL THESE DOCUMEN TS WHICH WERE PRODUCED BEFORE THE ITAT FOR THE FIRST TIME. IN TH E REASSESSMENT PROCEEDINGS, THE AO ASKED FOR VARIOUS DETAILS IN OR DER TO ASCERTAIN CREDITWORTHINESS OF THE PERSON, AMONG OTHER DETAILS . THE ASSESSEE DID NOT FILE THE REQUIRED DETAILS BEFORE THE AO AS NOTED BY THE AO IN THE ASSESSMENT ORDER AND THEREFORE, THE AO HELD YET AGAIN THAT THE CREDITWORTHINESS HAS NOT BEEN PROVED. THE PRESENT A PPEAL IS AGAINST THIS REASSESSMENT. IT WAS SUBMITTED BEFORE THE LEAR NED CIT(A) THAT ALL THE REQUIRED INFORMATION WERE FILED BEFORE THE AO. SINCE THERE WAS DISPUTE REGARDING FURNISHING OF DETAILS THE ASSESSE ES SUBMISSION WAS SENT TO THE AO FOR HIS COMMENTS. THE AO VIDE HIS LE TTER DATED 18-02-2011 MADE THE FOLLOWING SUBMISSIONS: '6. THE OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO PRODUCE ALT THE RELEVANT DOCUMENTS WHICH WERE PRODU CED BEFORE THE HON'BLE ITAT AND JUSTIFY ITS CLAIM OF GI FT. IN RESPONSE THE AUTHORIZED REPRESENTATIVE OF THE ASSES SEE ATTENDED AND SUBMITTED LETTER OF REPLY AND ORIGINAL DOCUMENT FOR VERIFICATION. THE SUBMISSION OF THE ASSESSEE IS VERIFIED AND WAS TAKEN ON RECORD. THE ASSESSEE HAD ONLY SUBMITTED COPY OF AFFIDAVIT (ALSO PRODUCED ORIGINAL FOR VERIFICATION) AND COPY OF CHE QUES / PAY ORDER DIRECTING TO MAKE PAYMENT TO THE ASSESSEE . ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 3 THE ASSESSEE HAS FAILED TO JUSTIFY VARIOUS ASPECTS TO PROVE THE GIFT AS GENUINE. IN VIEW OF NATURAL JUSTI CE, THE ASSESSEE WAS GIVEN ONE MORE OPPORTUNITY, IN THE FOR M OF SHOW CAUSE DATED 17.12.2009, TO JUSTIFY AND EXPLAIN THE FOLLOWING:- A) COY OF PROOF OF INCOME OF THE DONOR TO PROV E THE GENUINENESS AND CREDITWORTHINESS OF THE DONOR. B) COPY OF HIS BANK ACCOUNTS FROM WHERE THE WITHDRAWALS WERE MADE ALONG WITH PROOF OF IDENTITY. C) COPY OF HIS PASSPORT, INDICATING HIS STAY I N INDIA DURING THE F.Y. 2003-04. D) RELATION OF THE DONOR WITH ASSESSEE AND NATURE OF OCCASION / REASON FOR THE GIFT. THE ASSESSEE THROUGH ITS AUTHORIZED REPRESENTATIVE SUBMITTED A REPLY TO THE SHOW CAUSE RECEIVED ON 24.12.2009 WHICH WAS TAKEN ON RECORD. A S VERIFIED, THE ABOVE MENTIONED DETAILS WHICH ARE CAL LED FOR WERE NOT PRODUCED / SUBMITTED. THE HON'BLE ITAT HAD NOT SPECIFIED WHAT ORIGINAL DOCUMENTS WERE PRODUCED BEF ORE IT. HENCE, ON CLARIFYING THE SAME THE AUTHORIZED REPRESENTATIVE STATED THAT THE ORIGINAL AFFIDAVIT O F GIFT WAS PRODUCED BEFORE THE HON'BLE ITAT AND AS FOUND IS NO T NOTARIZED. 7. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS ALLEGED IN THE PAPER BOOK THAT IRRESPECTIVE OF THE DOCUMENTS TO BE PRODUCED BEFORE THE HON'BLE ITAT AN D CASE BEING SET ASIDE, IT WAS THE ASSESSING OFFICER WHO IS TO DECIDE THE GENUINENESS OF THE GIFT AND CALLED FO R THE DOCUMENTS TO BE PRODUCED FOR SATISFACTION. HENCE, I T IS MENTIONED THAT THE DETAILS/EXPLANATION CALLED FOR A S ABOVE IS NOT SATISFIED BY THE ASSESSEE IN ITS TOTALITY. ANY POINT OF EXPLANATION MISSING MAKES THE ASSESSING OFFICER TO DRAW ADVERSE INFERENCE. THE ASSESSEE HAS ALSO ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 4 MENTIONED THAT IT BELIEVES THAT THE ASSESSING O FFICER HAS DISREGARDED THE DIRECTION OF THE HON'BLE ITAT. IT IS TO MENTION THAT AS THE CASE WAS DECIDED AFRESH THEN IT HAS TO BE AS PER THE SATISFACTION OF THE ASSESSING OFFI CER. 8. CONCLUDING THE FACTS IT IS TO FURTHER MENTION TH AT THE DECISION OF THE HON'BLE HIGH COURT OF PUNJAB & HARYANA (2008) 37 SITC 214 (P&H), IN THE CASE OF SUBHASH CHAND VARMA VS. CIT, IS EMPHASIZED WHICH HA S TAKEN THE SIMILAR VIEW. EVEN THOUGH THE CREDITWORTH INESS IS ESTABLISHED, THE OCCASION AND PROPOSE OF GIFT IS NOT JUSTIFIED. IT IS FURTHER MENTIONED THAT THE ASSESSE E IN A. Y. 2005-06 HAS ALSO RECEIVED HUGE AMOUNT OF GIFT FORM THE SAME PERSON AND REASON AND JUSTIFICATION BEING THE SAME. FURTHER THE ASSESSEE HAS ALSO RECEIVED HUGE AMOUNT OF LOAN IN THE A. Y. 2006-07 FROM SHRI MAHENDRA DURLAB HJI DESAI OF SINGAPORE WHO ON VERIFICATION AND CONFIRME D FROM SINGAPORE AUTHORITIES DOES NOT EXISTS, BUT THE MATTER IS YET TO BE FURTHER INVESTIGATED. IT IS TO MENTION THAT EVEN THOUGH EVERY ASSESSMENT YEAR IS SEPARATE CASE, BUT MODUS OPERANDI OF THE ASSESSEE TO INTRODUCE FUND, Y EAR TO YEAR, REMAINS TO BE OF SPURIOUS NATURE AND NOT T O THE SATISFACTION OF THE ASSESSING OFFICER'. THE AO'S REPORT WAS HANDED OVER TO THE ASSESSEE FOR HER COMMENTS. THE ASSESSEE FILED THE WRITTEN SUBMISSION WHICH IS REPRODUCED AS UNDER: 'THE LEARNED ASSESSING OFFICER REITERATED, WITHOUT VERIFICATION OF THE VARIOUS DOCUMENTS FURNISH ED, HIS EARLIER STAND. IN SUMMARY, THE LEARNED ASSESSING OFFICER HAS CONTINUED TO RAISE ONE OR THE OTHER ISSUE AND T OO ON FLIMSY GROUNDS. IT WOULD BE APPRECIATED THAT IN THE EARLIER ROUND OF ASSESSMENT, THE LEARNED ASSESSING OFFICER DENIED THE EXPLANATION OF THE APPELLANT FOR THE REA SON THAT: A) THE AFFIDAVIT ARE NOT NOTARIZED; B) THE DONOR SHRI SHYAM SUNDAR IS NOT HER RELATIVE AND THAT THERE WAS NO OCCASION FOR THE GIF T. ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 5 C) THE COPY OF BANK ACCOUNT IS NOT FURNISHED; D) THE COPY OF CONFIRMATION IS FAX COPY. THE APPELLANT FURNISHED ALL THE DOCUMENTS IN ORIGIN AL AND AS PER THE DIRECTION OF THE HON'BLE TRIBUNAL. THE ONLY OBJECTION TO THE DOCUMENTS FURNISHED IS THAT THE AFFIDAVIT IS NOT NOTARIZED. IT IS RESPECTF ULLY SUBMITTED THAT THE AFFIDAVIT IS GENERALLY NOTARIZED TO ESTABLISH THE IDENTITY OF THE SIGNATORY. IN THIS CA SE, WHEN THE COPY OF PASSPORT IS ALSO FURNISHED, THE AFFIDAV IT BEING NOTARIZED OR OTHERWISE IS IRRELEVANT. THE LEARNED ASSESSING OFFICER HAS MENTIONED ABOUT RECEIPT OF GIFT IN THE SUBSEQUENT YEAR AND HAS MENT IONED THE RECEIVING OF LOAN FROM SHRI MAHENDRA DESAI OF SINGAPORE. HE HAS ALSO MENTIONED THAT SOME VERIFICA TION IS MADE FROM SINGAPORE AUTHORITIES AND THAT SHRI DE SAI IS NOT FOUND TO BE EXISTING. YOUR APPELLANT IS NOT AWA RE OF ANY SUCH VERIFICATION AND IF SUCH VERIFICATION OR OBSERVATIONS ARE SOUGHT TO BE RELIED UPON, THE APPE LLANT MAY BE PROVIDED WITH ALL THE CORRESPONDENCES AND INFORMATION IN POSSESSION OF THE LEARNED ASSESSING OFFICER TO MAKE SUCH OBSERVATIONS AND FINDINGS. YOU R APPELLANT FURTHER SUBMITS THAT THESE OBSERVATIONS A ND FINDINGS ARE NOT AT ALL RELEVANT FOR THE CASE ON HA ND. YOUR APPELLANT SUBMITS THAT WITH REGARD TO THE ADDITION IN QUESTION, THE SAME IS MADE U/S. 68 AND AS PER THE PROVISIONS OF SECTION 68, THE ONUS ON THE APPEL LANT REQUIRING HIM TO EXPLAIN THE SOURCE OF THE CREDIT W HICH IS FULLY ESTABLISHED BEYOND DOUBT'. THE ASSESSEE ALSO RELIED ON THE HON'BLE GUJARAT HIG H COURT'S DECISION IN THE CASE OF MURLIDHAR LAHORIMAL VS CIT (280 ITR 512) WHEREIN IT HAS BEEN HELD THAT GIFT CAN BE DISALLOWED ONLY WHEN PROVISIONS OF SECTION 68 IS FOUND APPLICABLE. ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 6 3. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION O F THE ASSESSEE THOUGH MADE SUBSTANTIAL OBSERVATIONS/FINDI NGS AGAINST THE ASSESSEE DELETED THE ADDITION AND ALLOWED THE APPEA L OF THE ASSESSEE. HIS FINDINGS IN PARA 2.3 AND 3 IN THE APP ELLATE ORDER ARE REPRODUCED AS UNDER: 2.3. I HAVE GIVEN CAREFUL CONSIDERATION TO THE SUBMISSIONS MADE AND THE FACTS ON RECORD. THE BASIC ISSUE IN THIS CASE IS WHETHER GENUINENESS OF THE TRANSACTION HAS BEEN ESTABLISHED AND ALSO WHETHER T HE CREDITWORTHINESS OF THE DONOR HAS BEEN ESTABLISHED OR NOT. ACCORDING TO THE APPELLANT, SINCE TRANSACTION IS TH ROUGH BANKING CHANNEL GENUINENESS OF TRANSACTION IS ESTABLISHED. THE ASSESSING OFFICER HOWEVER, RAISED TWO IMPORTANT QUESTIONS IN THIS REGARD. FIRST IS, THAT THIS IS NOT THE ONLY TIME WHEN SUCH GIFT HAS BEEN SHOWN. ACCORD ING TO THE ASSESSING OFFICER, GIFT HAS BEEN SHOWN FROM THE CONCERNED PARTY IN THE NEXT YEAR I.E. ASSESSMENT YE AR 2005-06 ALSO. THE REASON FOR GIFT ALSO BEING THE SA ME. ACCORDING TO THE ASSESSING OFFICER THE REASON FOR G IFT YEAR AFTER YEAR FROM SAME PERSON, WHO IS NOT RELATED, IS STATED TO BE THAT THE DONOR'S FATHER HAD WORKED WITH APPEL LANT'S FATHER LONG BACK AND THEY LIVED TOGETHER AT BHILWAR A, RAJASTHAN DURING THE PERIOD FROM 1978 TO 1990 RESUL TING INTO A CLOSE ASSOCIATION BETWEEN TWO PARTIES. IT IS STATED THAT BECAUSE OF SUCH ASSOCIATION AFTER ALMOST 15 YE AR THE DONOR HAS STARTED GIVING GIFT TO THE APPELLANT YEAR AFTER YEAR. APART FROM THIS GENERALIZED STATEMENT NO OTHE R EVIDENCE WAS FILED. ACCORDING TO THE ASSESSING OFFI CER THE REASON GIVEN FOR SUCH HUGE AMOUNT OF GIFT FAIL THE TEST OF HUMAN PROBABILITY WHICH IS A VALID CONCEPT FOR THE PURPOSE OF ASCERTAINING GENUINENESS OF A TRANSACTION (SUMAT I DAYAL 214 ITR 801). THE ASSESSING OFFICER ALSO REFE RRED TO ON GOING INVESTIGATION IN THE CASE OF THE APPELL ANT WHEREIN THE FOREIGN LOAN HAS BEEN SHOWN BY THE APPE LLANT WHICH HAS NOT BEEN FOUND GENUINE. THIS POINT HAS BE EN RAISED BY THE ASSESSING OFFICER TO ESTABLISH A POIN T THAT ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 7 THE APPELLANT IS NOT BEYOND ARRANGING BOGUS FOREIGN REMITTANCE IN THE FORM OF LOAN OR GIFT. ON THE OTHER HAND, THE APPELLANT HAS FILED CONFIRMATION LETTER FROM SHRI SHYAM SUNDAR VALAPPIL CONFIRMING REMITTANCE IN THE FOLLOWING MANNER. DATE AMOUNT CRS.) PARTICULARS OF REMITTANCE 09.03.2004 5,00,000/- VIDE PAY ORDER NO. 737952 DATED 06.03.2004 OF UAE EXCHANGE CENTRE L.L.G., BUR DUBAI, U.A.E. 09.03.2004 5,00,0007- VIDE PAY ORDER NO. 737953 DATED 06.03.2004 OF U.A.E . EXCHANGE CENTRE L.L.C., BUR DUBAI, U.A.E. 09.03.2004 5,00,000/- VIDE PAY ORDER NO. 737954 DATED 06.03.2004 OF U.A.E . EXCHANGE CENTRE L.L.C., BUR DUBAI, U.A.E. THE APPELLANT HAS ALSO FILED COPIES OF CHEQUES ISSUED WHICH SHOWS THAT THE AMOUNT WAS PAID IN INDI AN CURRENCY THROUGH U.A.E. EXCHANGE CENTRE, ERNAKULAM. THE APPELLANT HAS ALSO FILED COPY OF BANK ACCOUNT O F RAK BANK ACCOUNT NO. 0019-786399-001. HOWEVER, IT IS SE EN THAT THIS BANK STATEMENT IS ONLY FOR THE MONTH OF M ARCH, 2004 SHOWING THAT THE PAY ORDER HAVE BEEN ISSUED FR OM THIS BANK. THE APPELLANT HAS ALSO REFERRED TO THE A FFIDAVIT CONFIRMING THE ABOVE GIFT BY THE DONOR. HAVING GIVEN CAREFUL CONSIDERATION FIND, THAT FILING OF AFFIDAVIT WHETHER NOTARIZED OR NOT OR A M ERE CONFIRMATION LETTER IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF TRANSACTION OR CREDITWORTHINESS . AFFIDAVITS THEMSELVES ARE NOT EVIDENCE AND THEY ARE ALSO NOT RECOGNIZED IN SECTION 3 OF EVIDENCE ACT. ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 8 (SUDHADEVI VS. N.P. NARAYAN AIR 1988 SC 1381). FOR THE PURPOSE OF DISCHARGING ONUS U/S. 68 THE GENUINE NESS OF TRANSACTION AND CREDITWORTHINESS HAS TO BE ESTAB LISHED APART FROM IDENTITY OF THE PERSON. IN THIS CASE, TH E IDENTITY MIGHT NOT BE IN DISPUTE IN VIEW OF THE COPY OF PASS PORT FILED. SIMILARLY, THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS HAS ALSO BEEN ESTABLISHED BY VIRTUE OF COPY OF BANK ACCOUNT SHOWING SUFFICIENT BALANCE AND THE FACTUM OF TRANSACTION. AS NOTED ABOVE GIFT FROM UNRELATED PERSON HAS TO PASS THE TEST OF REASONABLENESS AND HUMAN PROBABILITY. IN THIS CASE REASON GIVEN, FAILS BOTH THE TEST. FIRSTLY BECAUSE ONLY A GENERALIZED REASON HAS BEEN GIVEN AND SECONDLY ABSENCE OF PROPER EVIDENCE IN THIS REGARD IN SUPPOR T OF SUCH REASON . BUT ADDITION U/S. 68 CAN BE MADE ONLY IF THE PROVISION OF THAT SECTION IS NOT SATISFIED. IN THIS CASE, PURELY IN TERMS OF SECTION 68 THE APPELLANT HAS DIS CHARGED HER ONUS. ACCORDINGLY, ADDITION CANNOT BE MADE U/S. 68. 3. IN THE RESULT, THE APPEAL IS ALLOWED. 4. THE LEARNED DR RELIED UPON THE ORDER OF THE AO A ND SUBMITTED THAT THE REQUIRED DOCUMENTS AS DIRECTED BY THE AO W ERE NOT SUBMITTED AT THE ASSESSMENT STAGE AND EVEN IN THE S ET ASIDE PROCEEDINGS, THEREFORE, THE CREDITWORTHINESS OF THE DONOR AND GENUINENESS OF THE TRANSACTION IS NOT PROVED. HE HA S SUBMITTED THAT THE DONOR IS STRANGER TO THE ASSESSEE AND NO PASSPO RT OF STAY OF THE DONOR IN INDIA IN THE ASSESSMENT YEAR UNDER APPEAL WAS FILED. NO EVIDENCES OF NATURE OF OCCASION AND REASONS FOR GIF T HAVE BEEN FILED. THE LEARNED DR SUBMITTED THAT THE LEARNED CIT(A) DE SPITE GIVING SPECIFIC FINDINGS AGAINST THE ASSESSEE WITHOUT JUST IFICATION DELETED THE ADDITION. ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 9 5. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED CIT(A) AND ADMITTED THAT THERE IS NO RELATIONSHIP BETWEEN THE DONOR AND THE DONEE. HE HAS SUBMITTED THAT CONFIRMATION OF THE DO NOR AND THEIR CONTINUOUS LIVING AT BHILWARA, RAJASTHAN WERE FILED . FURTHER, COPY OF THE BANK ACCOUNT OF THE DONOR WAS FILED TO SHOW THA T THE DONOR HAS SUFFICIENT FUNDS. COPIES OF THE SAME ARE ALSO FILED IN THE PAPER BOOK. HE HAS RELIED UPON THE DECISION OF THE HONBLE GUJA RAT HIGH COURT IN THE CASE OF MURLIDHAR LAHORIMAL VS CIT, 280 ITR 512 . THE LEARNED COUNSEL FOR THE ASSESSEE ON GOING THROUGH THE FINDI NGS OF THE LEARNED CIT(A) AGAINST THE ASSESSEE IN THE IMPUGNED ORDER A DMITTED THAT THE ASSESSEE HAS NOT PREFERRED ANY CROSS OBJECTION OR C ROSS APPEAL CHALLENGING THE ADVERSE FINDINGS OF THE LEARNED CIT (A) IN THE APPELLATE ORDER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. THE AO IN THE SET ASIDE PROCEE DINGS GAVE A SPECIFIC NOTICE TO THE ASSESSEE TO PROVE THE GENUIN E GIFT IN THE MATTER. THE AO NOTED THAT THE ASSESSEE ONLY FILED AFFIDAVIT AND COPY OF THE CHEQUES/PAY ORDER. THE ASSESSEE DID NOT FILE THE FO LLOWING DOCUMENTS REQUIRED BY THE AO AT THE ASSESSMENT STAG E: 1. COPY OF PROOF OF INCOME OF THE DONOR TO PROVE GE NUINENESS AND CREDITWORTHINESS OF THE DONOR. 2. COPY OF THE BANK ACCOUNT OF THE DONOR FROM WHERE WITHDRAWALS WERE MADE ALONG WITH PROOF OF IDENTITY. 3. COPY OF PASSPORT OF THE DONOR INDICATING HIS STA Y DURING THE ASSESSMENT YEAR UNDER APPEAL IN INDIA. ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 10 4. RELATIONSHIP BETWEEN THE DONOR AND THE ASSESSEE AND NATURE OF OCCASION AND REASONS FOR THE GIFT. THE ABOVE QUERIES OF THE AO WERE NOT SATISFIED BY T HE ASSESSEE BECAUSE NO EVIDENCE OR MATERIAL IN SUPPORT OF THE A BOVE QUERY WAS FILED BEFORE THE AO. SECTION 68 OF THE IT ACT PROVI DES THAT THE ASSESSEE SHALL HAVE TO FILE EXPLANATION TO THE SATI SFACTION OF THE AO. HOWEVER, THE ASSESSEE DID NOT FURNISH ANY EVIDENCE BEFORE THE AO TO HIS SATISFACTION TO PROVE GENUINE GIFT IN THE MATTE R. THE LEARNED CIT(A) WITH REGARD TO FILING OF THE AFFIDAVIT OR MERE FILING OF THE CONFIRMATION FOUND AND HELD THAT THE SAME ARE NOT SUFFICIENT TO PROVE GENUINENESS OF THE TRANSACTION OR CREDITWORTHINESS. THE LEARNED CIT(A) IN HIS FURTHER FINDINGS ALSO NOTED IN THE IMPUGNED ORDER AS REGARD S THE GIFT FROM UNRELATED PERSON THAT THE SAME HAS TO PASS THE TEST OF REASONABLENESS AND HUMAN PROBABILITY. THE LEARNED C IT(A) ON EXAMINING THE EVIDENCES FOUND THAT IN THIS CASE, TH E REASONS GIVEN, FAIL BOTH THE TESTS. IT WAS FURTHER FOUND THAT GENE RALIZED REASONS HAVE BEEN GIVEN AND FURTHER THERE IS NO EVIDENCE TO SUPP ORT SUCH REASONS. THE LEARNED COUNSEL FOR THE ASSESSEE DURING THE COU RSE OF ARGUMENT ADMITTED THAT DESPITE THESE SPECIFIC FINDINGS HAVE BEEN GIVEN BY THE LEARNED CIT(A) AGAINST THE ASSESSEE BUT NO CROSS OB JECTION OR CROSS APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING T HESE FINDINGS OF THE LEARNED CIT(A). THESE FINDINGS OF THE LEARNED C IT(A) AGAINST THE ASSESSEE CLEARLY PROVE THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION IN THE MATTER. IT IS WELL SET TLED LAW THAT MERE FILING OF CONFIRMATION OR TRANSACTION THROUGH BANKING CHAN NEL IS NOT ENOUGH TO PROVE THE INGREDIENTS OF SECTION 68 OF THE IT AC T. THE REASONS GIVEN BY THE DONOR FOR HIS LIVING TOGETHER WITH THE ASSES SEE AT BHILWARA ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 11 PERTAIN TO THE PERIOD FROM 1978 TO 1990 WHICH HAS N O CONNECTION WITH GIVING OF HUGE GIFT IN SUBSEQUENT ASSESSMENT YEAR 2 004-05 AND THAT EXPLANATION TOO DID NOT FIND FAVOUR FROM THE LEARNE D CIT(A). THE DONOR DESPITE STRANGER TO THE ASSESSEE HAS GIVEN HU GE GIFTS TO THE ASSESSEE. NO EVIDENCES OR MATERIALS HAVE BEEN FILE D ON RECORD TO PROVE NATURAL LOVE AND AFFECTION BETWEEN THE DONOR AND THE ASSESSEE. NO EVIDENCE OF ANY NATURE OF GIFT OR OCCA SION HAS BEEN FILED ON RECORD. NO EVIDENCE OF ANY STAY OF THE DON OR IN INDIA DURING THE ASSESSMENT YEAR UNDER APPEAL HAS BEEN FILED. IT WOULD INDICATE THAT EVEN THE DONOR DID NOT VISIT THE DONEE EITHER IN THE ASSESSMENT YEAR UNDER APPEAL OF IN THE PRECEDING ASSESSMENT YE ARS. NO REASON HAS BEEN GIVEN AS TO WHY THE DONOR WAS GENEROUS EVE N AFTER SEPARATION OF SEVERAL YEARS FOR GIVING CONTINUOUS G IFT TO THE ASSESSEE NOT ONLY IN THE ASSESSMENT YEAR UNDER APPEAL BUT IN THE SUBSEQUENT YEARS. NO EVIDENCE IS FILED ON RECORD TO PROVE PROO F OF INCOME OF THE DONOR. THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT SINCE THE DONOR IS STAYING IN UAE, THEREFORE, NO SUCH EVIDENC E COULD BE FILED. WE DO NOT AGREE WITH THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE BECAUSE IF THE DONOR IS DOING ANY BUSINESS ACTIVITY IN UAE SOME EVIDENCE COULD HAVE BEEN FILED TO PROVE THE CR EDITWORTHINESS OF THE DONOR OR DOING SOME BUSINESS IN UAE. THE ABOVE FACTS THUS WOULD PROVE THAT THE AO WANTED TO VERIFY THE GENUIN ENESS OF THE GIFT IN THE MATER AND DIRECTED THE ASSESSEE TO FILE EVID ENCES ON SEVERAL POINTS TO SATISFY GENUINENESS OF THE GIFT IN THE MA TTER, BUT THE ASSESSEE FAILED TO EXPLAIN THE NATURE AND PURPOSE O F THE GIFT. NO RELATIONSHIP AND LOVE AND AFFECTION ARE PROVED. MER E FILING OF THE CONFIRMATION OR PART OF THE BANK STATEMENT WOULD NO T PROVE ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 12 CREDITWORTHINESS OF THE DONOR AND THE GENUINENESS I N THE MATTER. THUS, THE ASSESSEE FAILED TO PROVE ALL THE BASIC IN GREDIENTS OF GENUINE GIFT IN THE MATTER. IN THE ABSENCE OF SUFFI CIENT EVIDENCES AND MATERIAL ON RECORD, THE LEARNED CIT(A) WAS NOT JUST IFIED IN DELETING THE ADDITION PARTICULARLY WHEN SPECIFIC FINDINGS HAS B EEN GIVEN AGAINST THE ASSESSEE IN THE IMPUGNED ORDER WHICH HAVE NOT B EEN CHALLENGED BY THE ASSESSEE IN CROSS OBJECTION OR CROSS APPEAL. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS ANIL KUMAR, 292 IT R 552 HELD IN THE CASE OF GIFTS MERE IDENTIFICATION OF THE DONOR AND SHOWING THE MOVEMENT OF THE GIFT AMOUNT THROUGH BANKING CHA NNELS IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE GIFT . SINCE THE CLAIM OF GIFT IS MADE BY THE ASSESSEE, THE ONUS LIE S ON HIM NOT ONLY TO ESTABLISH THE IDENTITY OF THE PERSON MAKING THE GIFT BUT ALSO HIS CAPACITY TO MAKE SUCH A GIFT. IN ASSESSMEN T PROCEEDINGS FOR THE ASSESSMENT YEAR 1995-96 THE ASS ESSING OFFICER OBSERVED THAT THE ASSESSEE HAD RECEIVED TWO GIFTS OF RS.10 LAKHS EACH FROM N. R. E. ACCOUNTS OF TWO DONO RS, NAMELY V AND D. THE ASSESSING OFFICER FOUND THAT THE ASSESSE E COULD NOT DISCHARGE HIS ONUS OF PROVING THE CREDIT-WORTHINESS OF THE DONORS AND HELD THAT THE AMOUNT OF RS.20 LAKHS WHIC H HAD BEEN DECLARED BY THE ASSESSEE AS GIFT, WAS IN FACT HIS I NCOME AND ADDED TO HIS TOTAL INCOME UNDER SECTION 68. THE ADD ITION WAS DELETED BY THE COMMISSIONER (APPEALS) AND THIS WAS UPHELD BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT: HELD THA T THERE WAS NOTHING ON RECORD TO SHOW AS TO WHAT WAS THE FINANC IAL CAPACITY OF THE DONORS, WHAT WAS THE CREDIT-WORTHINESS OF TH E DONORS, WHAT KIND OF RELATIONSHIP THE DONORS HAD WITH THE A SSESSEE, ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 13 WHAT WERE THE SOURCES OF FUNDS GIFTED TO THE ASSESS EE AND WHETHER THEY HAD THE CAPACITY OF GIVING LARGE AMOUN TS OF GIFT TO THE ASSESSEE. FURTHER, THE ASSESSEE WAS ASKED TO AP PEAR IN PERSON BEFORE THE ASSESSING OFFICER, BUT NEVER APPE ARED. THE ADDITION OF RS.20 LAKHS WAS JUSTIFIED. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS P. MOHANKALA 291 ITR 278 HELD THE ASSESSEE RECEIVED FOREIGN GIFTS FROM ONE COMMON DONOR. THE P AYMENTS WERE MADE TO THEM BY INSTRUMENTS ISSUED BY FOREIGN BANKS AND CREDITED TO THE RESPECTIVE ACCOUNT OF THE ASSESSEES BY NEGOTIATION THROUGH A BANK IN INDIA. MOST OF THE CH EQUES SENT FROM ABOARD WERE DRAWN ON THE CITIBANK, N. A. SINGA PORE. THE EVIDENCE INDICATED THAT THE DONOR WAS TO RECEIVE SU ITABLE COMPENSATION FROM THE ASSESSEES. ON THIS MATERIAL T HE ASSESSING OFFICER HELD THAT THE GIFTS THOUGH APPARE NT WERE NOT REAL AND ACCORDINGLY TREATED ALL THOSE AMOUNTS WHIC H WERE CREDITED IN THE ACCOUNT BOOKS OF THE ASSESSEES AS T HEIR INCOME APPLYING SECTION 68 OF THE INCOME-TAX ACT, 1961. TH E ASSESSEES DID NOT CONTEND THAT EVEN IF THEIR EXPLANATION WAS NOT SATISFACTORY THE AMOUNTS WERE NOT OF THE NATURE OF INCOME. THE COMMISSIONER (APPEALS) CONFIRMED THE ASSESSMENT. ON FURTHER APPEAL, THERE WAS A DIFFERENCE OF OPINION BETWEEN T HE TWO MEMBERS OF THE APPELLATE TRIBUNAL AND THE MATER WAS REFERRED TO THE VICE PRESIDENT WHO CONCURRED WITH THE FINDINGS AND CONCLUSION OF THE ASSESSING OFFICER AND THE COMMISS IONER (APPEALS). ON APPEAL THE HIGH COURT RE-APPRECIATED THE EVIDENCE AND SUBSTITUTED ITS OWN FINDINGS AND CAME TO THE CO NCLUSION THAT THE REASONS ASSIGNED BY THE TRIBUNAL WERE IN T HE REALM OF ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 14 SURMISES, CONJECTURE AND SUSPICION. ON APPEAL TO TH E SUPREME COURT: HELD, REVERSING THE DECISION OF HIGH COURT, THAT FINDINGS OF THE ASSESSING OFFICER, THE COMMISSIONER (APPEALS ) AND THE TRIBUNAL WERE BASED ON THE MATERIAL ON RECORD AND N OT ON ANY CONJECTURES AND SURMISES. THAT THE MONEY CAME BY WA Y OF BANK CHEQUES AND WAS PAID THROUGH THE PROCESS OF BANKING TRANSACTION WAS NOT BY ITSELF OF ANY CONSEQUENCE. T HE HIGH COURT MISDIRECTED ITSELF AND ERRED IN DISTURBING TH E CONCURRENT FINDINGS OF FACT. HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF YASH PAL GOEL VS CIT 310 ITR 75 HELD THAT HELD, DISMISSING THE APPEAL THAT THE FINANCIAL POSITION O F M. SUGGESTED THAT HE NEITHER HAD THE CAPACITY TO MAKE THE GIFT N OR THE SOURCE FROM WHERE THE GIFT WAS MADE. NO REASON WHATSOEVER HAD BEEN ASSIGNED FOR GIFTING SUCH A HUGE AMOUNT BY M TO THE ASSESSEE. M NEVER VISITED THE HOME OF THE ASSESSEE AND HENCE THERE WAS NO LOVE AND AFFECTION. IT WAS NOTHING BUT A SUBTERF UGE TO AVOID INCOME-TAX. THE TRANSACTIONS WERE NOT GENUINE ONES . 6.1 THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPO N THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MU RLIDHAR LAHORIMAL (SUPRA) IN WHICH THE DONOR APPEARED BEFORE THE AO A ND CONFIRMED THE FACT OF HAVING MADE GIFT AND ALSO PRODUCED EVIDENCE IN SUPPORT OF SOURCES FROM WHICH THE FUNDS FOR MAKING THE GIFTS W ERE AVAILABLE WITH HIM. HOWEVER, THE FACTS OF THE CASE OF THE PRESENT ASSESSEE ARE CLEARLY DISTINGUISHABLE IN WHICH NEITHER THE DONOR APPEARED BEFORE THE AO NOR ANY EVIDENCE OF PROOF OF INCOME OF THE DONOR AND HIS CREDITWORTHINESS HAVE BEEN FILED BEFORE THE AO. THE DECISIONS CITED ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 15 ABOVE CLEARLY SUPPORT THE FINDINGS OF THE AO AND AS SUCH THE DECISION CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE WOULD NOT SUPPORT THE CASE OF THE ASSESSEE. 7. CONSIDERING THE ABOVE DISCUSSIONS, IT IS CLEAR T HAT THE ASSESSEE FAILED TO PROVE ANY RELATIONSHIP WITH THE DONOR AND HIS CREDITWORTHINESS. NO SUFFICIENT EVIDENCE OR MATERIA L IS FILED ON RECORD TO PROVE THE GENUINENESS OF THE GIFT IN THE MATTER. MERELY SHOWING GIFT WAS MADE THROUGH BANKING CHANNEL IS NOT SUFFICIENT TO PROVE GENUINENESS OF THE GIFT IN THE MATTER. HONBLE SUP REME COURT IN THE CASE OF DURGA PRASAD MORE 82 ITR 540 AND IN THE CAS E OF SUMATI DAYAL 214 ITR 801 HELD THAT COURTS OR TRIBUNALS HAVE TO JUDGE THE EVIDENCE BEFORE THEM BY APPLYING THE TEST OF HU MAN PROBABILITIES. IF THE SAID TEST IS APPLIED IN THIS CASE, IT IS CLE ARLY ESTABLISHED THAT THE ASSESSEE HAS FAILED TO PROVE G ENUINE GIFT IN THE MATTER. FURTHER, THE LEARNED CIT(A) HAS GIVEN SPECI FIC FINDINGS AGAINST THE ASSESSEE, THEREFORE, IT WAS NOT PROPER ON THE P ART OF THE LEARNED CIT(A) AFTER GIVING A FINDING OF FACT AGAINST THE A SSESSEE TO DELETE THE ADDITION. ACCORDINGLY, WE DO NOT FIND ANY JUSTIFICA TION FOR THE LEARNED CIT(A) TO DELETE THE ADDITION. WE ACCORDINGLY, SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORE THE ORDER OF THE AO. ITA NO.1564/AHD/2011 ITO, WARD 2 (6) BARODA VS SMT. SEEMA ANIL MODANI 16 8. IN THE RESULT, THE DEPARTMENTAL APPEAL IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (B. P. JAIN) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD