Shri Jayvadan Ramniklal Kapadia, Surat V. The Dy.CIT.,Cent.Circle-3, Surat

ITA 1583/AHD/2009

• Counselvise Citation: 158320514 RSA 2009
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 12-10-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 18-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHRI
• Keywords: Gift; Income from undisclosed sources; Opportunity of being heard; Source of fund; Deemed to accrue or arise in india; Onus to prove
• Section: 68

Judgement Text

-1- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' [BEFORE SHRI G D AGARWAL VICE-PRESIDENT] [AND SHRI T K SHARMA - JUDICIAL MEMBER] ITA NO.1583/AHD/2009 (ASSESSMENT YEAR:-2003-04) SHRI JAYVADAN RAMNIKLAL KAPADIA, 9/464, STORE SHERI, WADIFALIA, SURAT V/S THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-3, SURAT PAN: ACHPK 3121 D [APPELLANT] [RESPONDENT] APPELLANT BY :- SHRI MANISH J SHAH, AR RESPONDENT BY:- SHRI ALOK JOHRI, CIT - DR DATE OF HEARING:- 12-10-2011 DATE OF PRONOUNCEMENT:- 14-10-2011 O R D E R PER T K SHARMA (JM) :- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF LEARNED CIT(A) DATED 12-01-200 9 FOR ASSESSMENT YEAR 2003-04. GROUND NO.1 IS AS UNDER:- THE CIT(A) ERRED IN UPHOLDING THE ADDITION OF AN AMOUNT OF RS.75,600/- TO THE INCOME OF THE ASSESSEE ON THE PR ETEXT THAT THE ANNUAL VALUE OF TWO PROPERTIES HAS BEEN TAKEN AS TH E RENT RECEIVABLE IF THE PROPERTIES ARE LET OUT AND NOT THE MUNICIPAL VALUATION AS SHOWN BY THE ASSESSEE. 2 AT THE TIME OF HEARING BEFORE US, SHRI MANISH J S HAH, APPEARED AND POINTED OUT THAT IN ASSESSEES OWN CAS E FOR AYS 1999-2000 TO 2002-03 ND 2004-05 & 2005-06 [ITA NOS. 1580, 2 ITA NO.1583/AHD/2009 1582, 1584 & 1585/AHD/2009, ORDER DATED 18-12-2009 ], THE CONTROVERSY INVOLVED IN THIS APPEAL WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER [AO] TO RECOMPUTE THE INCOM E OF HOUSE PROPERTIES KEEPING IN VIEW THE DECISION OF THE ITAT MUMBAI BENCH-D IN THE CASE OF PARKPAPER INDUSTRIES (P) LTD . VS. ITO [2008] 25 SOT 406 (MUMBAI). HE ACCORDINGLY CONTENDE D THAT FOR THIS YEAR ALSO THE MATTER BE RESTORED TO THE FI LE OF AO FOR RECOMPUTING THE INCOME OF HOUSE PROPERTIES IN ACCOR DANCE WITH THE DECISION OF THE ITAT D-BENCH IN THE ASSESSEES OWN CASE (SUPRA). 3 SHRI ALOK JOHRI, LEARNED CIT DR, APPEARED ON BE HALF OF THE REVENUE AND POINTED OUT THAT THE ASSESSEE SHOUL D FURNISH EVIDENCE OF MUNICIPAL VALUATION. IN THE ABSENCE OF MUNICIPAL VALUATION, IT IS NOT PRACTICABLE TO FOLLOW THE DIRE CTIONS OF THE ITAT D-BENCH IN THE ASSESSEES OWN CASE (SUPRA). AS AGAINST THIS, THE COUNSEL OF THE ASSESSEE POINTED OUT THAT BEFORE THE AO THE ASSESSEE SHALL FURNISH NECESSARY EVIDENCE OF MU NICIPAL VALUATION. 4 WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISION OF THE IT AT BENCH-D IN THE ASSESSEES OWN CASE FOR AYS 1999-2000 TO 200 2-03 ND 2004-05 & 2005-06 [ITA NOS.1580, 1582, 1584 & 1585/AHD/2009, ORDER DATED 18-12-2009]. IN THOSE YEARS, THE TRIBUNAL HAS RESTORED THIS ISSUE TO THE FILE OF THE AO FOR RECOMPUTING THE INCOME FROM HOUSE PROPERTIES. THE O PERATIVE 3 ITA NO.1583/AHD/2009 PORTION OF THE DECISION IS CONTAINED IN PARA-6 OF T HE ORDER, WHICH READS AS UNDER:- 6. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW ARID THE DECISI ON OF ITAT MUMBAI 'D' BENCH IN THE CASE OF PARKAPER INDUSTRIES (P) LTD. VS. ITO (SUPRA). IN THE CASE, BEFORE US, THE PROPERTIES ARE NOT LET OUT. THEREFORE, IS PRESUMED THAT THE E ARE SELF-OCCUPIED AND THE DECISION OF THE ITAT MENTIONED ABOVE IS SQUARELY APPLICABLE TO THE FACTS OF ASSESSEE'S CASE. THE ITAT MUMBAI D' BENCH IN THE AF ORESAID DECISION AFTER EXAMINING THE PROVISIONS CONTAINED I N SECTION 22 & 23 OF THE IT ACT, ALL THE RELEVANT CASE LAWS AND CIRCU LAR OF CBDT CITED SUPRA HELD THAT CHARGE UNDER SEC.22 IS NOT ON THE M ARKET RENT; BUT IS ON THE ANNUAL VALUE AND IN THE CASE OF PROPERTY WHI CH IS NOT LET OUT, MUNICIPAL VALUE WOULD BE A PROPER YARDSTICK FOR DET ERMINING THE ANNUAL VALUE. MUNICIPAL VALUATION SHOULD BE THE BAS IS OF DETERMINING ANNUAL VALUE IN THE PRESENT CASE. ACTION OF THE REV ENUE AUTHORITIES IN ADOPTING ANNUAL VALUE ON THE BASIS OF INQUIRIES CON DUCTED REGARDING MARKET RENT IN THE VICINITY OF THE PROPERTY IS NOT IN ACCORDANCE WITH LAW. WE. THEREFORE, FOLLOWING THE DECISION OF ITAT MUMBAI 'D' BENCH (SUPRA) DIRECT THE ASSESSING OFFICER TO ADOPT THE MUNICIPAL VALUATION OF ALL THE PROPERTIES IN ALL THE ASSESSME NT YEARS UNDER APPEAL. FOR THIS PURPOSE THE ASSESSEE SHALL FURNISH NECESSARY EVIDENCE, THE ASSESSING OFFICER WILL EXAMINE THE SA ME AND RECOMPUTED THE INCOME OF HOUSE PROPERTIES KEEPING I N VIEW THE DECISION OF ITAT MUMBAI 'D' BENCH IN THE CASE OF PA RKPAPER INDUSTRIES (P) LTD. (SUPRA). FOLLOWING THE AFORESAID DECISION OF THE ITAT BENCH- D IN THE ASSESSEES OWN CASE (SUPRA), WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE SAME T O THE FILE OF THE AO WITH THE DIRECTION THAT FOR THIS YEAR ALSO T HE ASSESSEE SHALL FURNISH NECESSARY EVIDENCE IN RESPECT OF MUNI CIPAL VALUATION, THE AO WILL EXAMINE THE SAME AND RECOMPU TE THE INCOME OF HOUSE PROPERTIES KEEPING, AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4 ITA NO.1583/AHD/2009 5 THE ONLY OTHER GROUND OF APPEAL IS AS UNDER:- 2 THE CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF RS.9,07,224/- BEING THE GIFTS RECEIVED BY THE ASSES SEE ON THE PRETEXT THAT THEY ARE NON-GENUINE. 6 THE BRIEF FACTS RELATING TO THE CONTROVERSY INVOL VED IN THIS APPEAL ARE THAT IN THE PREVIOUS YEAR RELEVANT TO AS SESSMENT YEAR UNDER APPEAL, THE ASSESSEE HAS RECEIVED GIFTS IN CA SH FROM THE FOLLOWING PERSONS:- SR. NO. NAME OF THE PERSONS AMOUNT OF GIFT (RS.) RETURNED INCOME (RS.) 1 SHRI BABULAL SUGANCHAND MOHATA 51,501 NOT SUBMITTED BY THE ASSESSEE 2 SHRI RAMESHWAR M TAPARIA 1,01,000 -DO- 3 SHRI MUKESHKUMAR R TAPARIA 1,00,000 -DO- 4 SHRI RAJESHKUMAR R TAPARIA 1,00,000 -DO- 5 SMT. RENUDEVI VIJAYKUMAR TAPARIA 50,000 -DO- 6 SHRI VAISHAL J MARFATIA 1,25,000 77,408 7 SHRI JAYKUMAR CHANDRAVADAN MARFATIA 1,25,000 92,451 8 SMT. MAYADEVI SURESHKUMAR RATHI 31,111 NOT SUBMITTED BY THE ASSESSEE 9 SHRI SURESHKUMAR PANALAL RATHI 31,111 -DO- 10 SHRI VIJAYKUMAR RAMESHWARLAL TAPARIA 1,01,000 -DO- 11 SMT. SUSHILADEVI RAMESHWARLAL TAPARIA 50,000 -DO- 5 ITA NO.1583/AHD/2009 12 SMT. PUSHPADEVI BABULAL TAPARIA 41,501 -DO- TOTAL 9,07,224 IN THE ASSESSMENT ORDER, THE AO OBSERVED THAT THE A SSESSEE HAS ONLY FILED THE COPIES OF DECLARATIONS WHEREIN THE G IFTS ARE STATED TO HAVE BEEN MADE. THE ASSESSEE HAS NOT BEEN ABLE T O PROVE (I) CREDITWORTHINESS OF THE DONOR AS TO OUT OF WHIC H SOURCE THE CASH GIFT IS GIVEN OR HE IS CAPABLE OF GIVING A GIFT OF RESPECTIVE AMOUNTS. (II) THE RELATIONSHIP WITH THE DONOR AS TO THE NATU RAL CONTENT OF LOVE AND AFFECTION OUT OF WHICH THE GIFT S ARE MADE. (III) THE GIFT IS BY WAY OF CASH FOR WHICH NO SOURC E IS EXPLAINED. THE AO FURTHER STATED THAT SINCE THE ASSESSEE HAS N OT BEEN ABLE TO PROVE THE INGREDIENTS I.E. CREDITWORTHINESS AND NATURAL LOVE AND AFFECTION OUT OF WHICH, GIFTS CAN BE MADE. HE A CCORDINGLY TREATED ALL THE GIFTS AS NON-GENUINE AND BROUGHT TO TAX THE SAME AS INCOME OF ASSESSEE OUT OF UNDISCLOSED SOURCES OF INCOME. 7 ON FURTHER APPEAL BEFORE THE LEARNED CIT(A), THE ASSESSEE CONTENDED THAT THE GIFTS ARE GENUINE AND HE HAS GIV EN GIFT- DEEDS AND PAN NUMBERS OF ALL PERSONS AND COPIES OF RETURNS OF INCOME IN TWO CASES. HENCE, THE GIFTS ARE PROVED AND SHOULD BE TREATED AS GENUINE. AFTER CONSIDERING THE AFORES AID 6 ITA NO.1583/AHD/2009 SUBMISSIONS, IN THE IMPUGNED ORDER, THE LEARNED CIT (A) UPHELD THE ACTION OF THE AO TREATING THE GIFTS OF RS.9,07, 224/- AS NON- GENUINE AS INCOME OF ASSESSEE FROM UNDISCLOSED SOUR CES, FOR THE DETAILED REASONS GIVEN IN PARA-3.4 WHICH READS AS U NDER:- 3.4 I HAVE CONSIDERED THE FACTS AND THE SUBMISSION S. I DO NOT AGREE WITH THE APPELLANT'S VIEW. THE LEGAL AND GENERAL PR INCIPLES, ON THE POINT OF GENUINENESS OF GIFT, ARE SUMMARIZED IN BRI EF AS UNDER: IN THE CASE OF CIT VS P.MOHANKALA 291 ITR 278, THE HON'BLE SUPREME COURT HELD THAT ' THE MONEY CAME BY WAY OF BANK CHEQUE AND WAS PAID THROUGH THE PROCESS OF BANKING TRANSACTIONS WAS NOT BY ITSELF OF ANY CONSEQUENCES. ' THE BURDEN OF PROOF IS ON THE ASSESSEE U/S.68 & 69 OF T HE I.T. ACT. IN THE CASE OF CIT VS. DURGA PRASAD MORE (1971) 82 ITR 540 (SC), THEIR LORDSHIPS LAYING DOWN THE SIGNIFICANCE OF HUMAN PROBABILITIES HELD AS UNDER: 'IN A CASE WHERE A PARTY RELIED ON SELF SERVING REC ITALS IN DOCUMENTS, IT WAS FOR THAT PARTY TO ESTABLISH THE T RUTH OF THOSE RECITALS: THE TAXING AUTHORITIES WERE ENTITLED TO L OOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY O F SUCH RECITALS.' IN THE CASE OF SURNATI DAYAL VS. CIT (1995) 214 ITR 801 (SC), THEIR LORDSHIPS HELD AS UNDER: 'IN VIEW OF SECTION 68 OF THE ACT, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVI OUS YEAR, THE SAME MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSES OF THAT PREVIOUS YEAR IF THE EXPLANATION O FFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE ASSESSING OFFICER, NOT SATISFACTORY. IN SUCH A CASE, THERE IS PRIMA FACIE, EVIDENCE AGAINST THE ASSESSEE VIZ. THE RECEIPT OF MONEY, AND IF HE HAILS -TO REBUT, THE SAID EVIDENCE BEING UN- REBUTTED, CAN BE USED AGAINST HIM BY HOLDING THAT I T WAS A RECEIPT OF AN INCOME NATURE.' IN THE CASE OF SAJJAN DASS & SONS VS. CIT (2003) 264 ITR 435 (DELHI), THEIR LORD SHIPS OF THE HIGH COURT OF DELHI, WHILE CONSIDERING A CASE I N WHICH GIFTS WERE RECEIVED BY THE ASSESSEE THROUGH BANKING CHANNELS 7 ITA NO.1583/AHD/2009 LAID IMPORTANCE ON THE CAPACITY OF THE DONOR FOR MA KING THE GIFT AND HIS IDENTITY AS WELL AS IMPORTANCE OF RELA TIONSHIP BETWEEN THE DONOR AND DONEE IN DETERMINATION OF GEN UINENESS OF GIFT HELD AS UNDER: 'THAT A MERE IDENTIFICATION OF THE DONOR AND SHOWIN G THE MOVEMENT OF THE GIFT AMOUNT THROUGH BANKING CHANNEL S WAS NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE GIFT . SINCE THE CLAIM OF THE GIFT WAS MADE BY THE ASSESSEE, THE ONU S LAY ON HIM NOT ONLY TO ESTABLISH THE IDENTITY OF THE PERSO N MAKING THE GIFT BUT ALSO HIS CAPACITY TO MAKE A GIFT AND THAT IT HAD ACTUALLY BEEN RECEIVED AS A GIFT FROM THE DONOR.' IN THE CASE OF CIT VS. ANIL KUMAR-(2007) 292 ITR 55 2 (DELHI), THEIR LORDSHIPS HAVE 'HELD THAT THERE WAS NOTHING ON RECORD TO SHOW AS TO WHAT WAS THE FINANCIAL CAPACIT Y OF THE DONORS, WHAT WAS THE CREDITWORTHINESS OF THE DONORS , WHAT KIND OF RELATIONSHIP THE DONORS HAD WITH THE' ASSES SEE, WHAT WERE THE SOURCES OF FUNDS GIFTED TO THE ASSESSEE AN D WHETHER THEY HAD THE CAPACITY OF GIVING LARGE AMOUNTS OF GI FT TO THE ASSESSEE. THE ADDITION OF RS.20 LAKHS WAS JUSTIFIED .' IN THE CASE OF SANDEEP KUMAR (HUF) VS. CIT (2007) 2 93 ITR 294 (DELHI), THEIR LORDSHIPS HAVE 'HELD, DISMISSING THE APPEAL, THAT THERE WAS NOTHING ON RECORD TO SHOW TH E FINANCIAL CAPACITY OF THE DONOR, THE CREDITWORTHINESS OF THE DONOR, RELATIONSHIP OF THE DONOR WITH THE ASSESSEE, WHAT W ERE THE SOURCES OF FUNDS GIFTED TO THE ASSESSEE AND WHETHER THEY HAD THE CAPACITY OF GIVING LARGE AMOUNTS OF GIFT TO THE ASSESSEE. THEREFORE, THE GIFTS RECEIVED BY THE ASSESSEE FROM THE DONOR COULD NOT BE HELD TO BE GENUINE GIFTS.' IN THE CASE OF ITO VS. NAVIN KUMAR AGARWAL 25 SOT 2 53 (DELHI), THE HON'BLE ITAT DELHI BENCH CONSIDERED TH E CASE WHERE THE ASSESSEE CLAIMS THAT THE AMOUNT WAS RECEI VED THROUGH THE BANKING CHANNEL AND THE ASSESSEE SIMPLY FILED RETURN OF INCOME OF THE DONOR FOR A, Y. 1998-99 BUT NO RETURN FOR A.Y.2001-02 WAS FILED (WHICH WAS THE YEAR UNDER CONSIDERATION) AND THE BALANCE-SHEET FILED- FOR YEA R UNDER CONSIDERATION, WAS NOT ACCOMPANIED WITH THE RETURN FOR THAT ASSESSMENT YEAR AND THE ASSESSEE COULD NOT PROVE TH E CAPACITY, 8 ITA NO.1583/AHD/2009 THE GIFT WAS HELD NOT GENUINE AND IT WAS TREATED AS DEEMED INCOME OF THE ASSESSEE. FROM THESE DECISIONS, THE GENERAL PRINCIPLE LAID OU T ARE AS UNDER: I) IT IS FOR THE ASSESSEE TO LEAD EVIDENCE TO PROVE THE IDENTIIY, CREDITWORTHINESS AND FINANCIAL CAPACITY O F THE DONOR AS WELL AS THE GENUINENESS OF THE GIFT TRANSA CTION; II) MORE IDENTIFICATION OF THE DONOR AND MOVEMENT O F THE AMOUNTS THROUGH BANKING CHANNELS ARE NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE GIFT; III) IT IS ALSO NECESSARY FOR THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE DONOR FOR SHOWING THAT GIFT WAS GENUINE; IV) THE GENUINENESS OF A GIFT-TRANSACTION CANNOT BE DETERMINED WITHOUT LOOKING INTO THE ASPECT OF THE FINANCIAL CAPACITY OF THE DONOR, THE SOURCE OF THE GIFT AND CAPACITY OF THE DONOR TO GIVE SUCH AMOUNT IN GI FT; V) THE GENUINENESS OF A GIFT TRANSACTION CANNOT BE DETERMINED WITHOUT LOOKING INTO ASPECT OF HUMAN PROBABILITIES, SURROUNDINGS CIRCUMSTANCES, SUCH AS RELATIONSHIP OF THE DONOR AND DONEE, THE OCCASION F OR MAKING SUCH GIFT ETC; VI) IN CASE THE GIFTS RECEIVED BY THE ASSESSEE FROM THE DONOR ARE NOT GENUINE THEN THE AMOUNT RECEIVED AS GIFTS I S TO BE TREATED AS CONCEALED INCOME OF THE ASSESSEE AND CAN BE ADDED TO THE INCOME OF THE ASSESSEE AS BEING THE ASSESSEE'S INCOME FROM UNDISCLOSED SOURCES.' VII) AS PER DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF ROHINI BUILDERS 251 ITR 360, WHEN THE CREDI TOR IS INCOME-TAX PAYEE AND ASSESSEE HAS GIVEN CONFIRMATION ALONGWITH COPY OF RETURN AND PAN NO., IT IS SUFFICIENT TO PROVE THE CREDITWORTHINESS. THE AS SESSEE IS NOT SUPPOSED TO PROVE THE SOURCE OF THE SOURCE. 9 ITA NO.1583/AHD/2009 HOWEVER, IF CREDITORS/DONORS ARE NOT INCOME-TAX PAY ERS, THE ASSESSEE CANNOT TAKE THE PLEA THAT HE IS NOT SU PPOSED TO PROVE THE SOURCE OF THE SOURCE. THEN HE HAS TO P ROVE THE CREDITWORTHINESS INDEPENDENTLY BY FURNISHING EVIDENCE ABOUT CREDITWORTHINESS OF THE CREDITOR/DON OR. ONLY FILING CONFIRMATION AND FACT THAT THE AMOUNT C AME THROUGH CHEQUE IS NOT SUFFICIENT TO PROVE THE CREDITWORTHINESS. BY APPLYING THE ABOVE PRINCIPLES TO THE FACTS OF TH E CASE, IT IS HELD THAT THE ASSESSEE HAS NOT PROVED THE CREDITWOR THINESS OF THE DONORS. MERELY FILING THE. P.A. NO. DOES NOT PR OVE THE CREDITWORTHINESS. NO COPY OF RETURN IS FILED AND IN TWO CASE WHERE RETURN IS FILED, IT IS NOT ACCOMPANIED BY COP Y OF BALANCE SHEET AND INCOME SHOWN IS NOT SUFFICIENT TO COVER T HE GIFT AMOUNT. ALL THE GIFTS ARE IN CASH AND NO RELATIONS HIP WITH DONORS. IN VIEW OF THIS AND THE FACTS BROUGHT ON RE CORD BY THE ASSESSING OFFICER, THE ACTION OF THE A.O. WAS JUSTI FIED IN TREATING THE GIFTS AS NOT GENUINE. HENCE, THE ADDIT ION IS CONFIRMED AND THE GROUND IS REJECTED. 8 AGGRIEVED WITH THE ORDER OF THE LEARNED CIT(A), T HE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. AT T HE TIME OF HEARING BEFORE US, ON BEHALF OF THE ASSESSEE, SHRI MANISH J SHAH APPEARED AND POINTED OUT THAT THE ASSESSEE CAN PROD UCE ALL THE DONORS, AO CAN EXAMINE THE SAME. IN CASE, THE AO WA S HAVING DOUBT, HE SHOULD HAVE ASKED FURTHER DETAILS. SINCE NO FURTHER DETAILS WERE ASKED, THE MATTER BE RESTORED TO THE F ILE OF THE AO SO THAT THE ASSESSEE CAN PRODUCE ALL THE DONORS, AO CAN EXAMINE THE SAME AND READJUDICATE THE ADDITION OF RS.9,07,2 24/- AFRESH IN ACCORDANCE WITH LAW. 9 SHRI ALOK JOHRI, LEARNED CIT DR APPEARED ON BEH ALF OF THE REVENUE AND OBJECTED TO THE AFORESAID PRAYER OF THE ASSESSEE. THE LEARNED DR POINTED OUT THAT THE DECIS ION OF THE 10 IT A NO.1583/AHD/2009 ITAT THIRD MEMBER IN THE CASE OF SUSHIL KUMAR MOHNA NI VS. ITO [2011] 131 ITD 237 (JAB) (TM) IS APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. IN THAT CASE, THE TRIBUNAL HAS HELD AS UNDER:- (I) THERE IS NO RELATIONSHIP BETWEEN THE DONORS AN D DONEE; (II) THE DONORS NEVER RECEIVED SIMILAR GIFTS FROM T HE ASSESSEE ON ANY OCCASION. (III) THERE IS NO EVIDENCE ON RECORD THAT THERE WAS ANY LOVE AND AFFECT: FRIENDSHIP BETWEEN THE DONORS AND DONEE. TH ERE IS NO EVIDENCE THAT WAS ANY BUSINESS TRANSACTION BETWEEN THE DONORS AND THE ASSESSEE THEREFORE, IT COULD NOT BE BELIEVE D THAT HOW A STRANGER WOULD PART AWAY HIS SAVINGS TO GIVE GIFTS TO ANY UNKNOWN PERSON SACRIFICING HIS CHANCES OF BETTERI NG HIS/HER LIVING CONDITIONS WITH THAT MONEY. (IV) THERE IS NO EVIDENCE THAT ASSESSEE OR HIS FAMI LY MEMBERS HAS GIVEN GIFT TO THE MEMBERS OF DONOR'S FAMILY AT ANY TIME. (V) THE DONEE FILED RETURNS FOR THE CURRENT AS WELL AS FOR THE PRECEDING YE AND EACH ONE HAD DECLARED INCOME JUST ABOVE THE TAXABLE LIMIT RS.50,000. NEVER BEFORE ANY OF THE DO NORS HAD FILED ANY TAX RETURN AND EVEN THEREAFTER NEVER DID ANY FILE THE RETURN. (VI) THE BANK ACCOUNT WAS OPENED WITH A VIEW TO DEP OSIT A SUM OF RS.1 LAKH IN CASH WHICH IMMEDIATELY WAS TRANSFERRED AS GIFT TO THE ASSESSEE. (VII) THE DONORS BELONG TO A VERY LOW FINANCIAL STR ATA. IN FACT, THEY ARE JUST HAND TO MOUTH, RATHER ARE STRUGGLING TO MA NAGE THEIR LIVELIHOOD. IT IS, THUS, 1 UNBELIEVABLE THAT SUCH A PERSON CAN EVER DREAM OF MAKING A GIFT. (VIII) THERE IS NO MATERIAL ON RECORD TO SHOW AS TO WHY THE DONORS HAVE SHOWERED GIFTS OF ENORMOUS AMOUNTS ON THE ASSE SSEE, 11 IT A NO.1583/AHD/2009 PARTICULARLY IN ABSENCE OF ANY RELATIONSHIP BETWEEN DONORS AND THE ASSESSEE AND THERE WAS NO OCCASION FOR GIFTS. (IX) THE GENUINENESS OF GIFTS CANNOT BE ACCEPTED BE CAUSE DONORS HAVE ALLEGEDLY GIVEN THE GIFTS TO THE ASSESSEE, WHO IS A PERSON OF MEANS HAVING DECLARED THE SALES OF RS.14,64,88,9 57 AND HAVING MULTIPLE SOURCES OF INCOME. THE LEARNED DR POINTED OUT THAT IF ONE APPLY THE AF ORESAID PRINCIPLES TO THE FACTS OF THE ASSESSEES CASE, IT IS CLEARLY PROVED THAT ALL THE GIFTS ARE NOT GENUINE AND, THEREFORE, THE VIEW TAKEN BY THE LEARNED CIT(A) BE UPHELD. 10 WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NEVER ASKED THE A SSESSEE TO EXPLAIN THE RELATIONSHIP OF THE DONORS WITH THE ASS ESSEE AND OTHER DETAILS REGARDING CAPACITY OF DONORS TO MAKE THE GIFTS. THE AO ALSO NEVER ASKED THE ASSESSEE TO PRODUCE THE DON ORS. SINCE, NOW THE ASSESSEE IS WILLING TO PRODUCE ALL THE DONO RS BEFORE THE AO AND OTHER DETAILS WHICH THE AO MAY REQUIRE IN TH IS REGARD, WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RE STORE THIS ISSUE TO THE FILE OF THE AO WITH THE DIRECTION THAT THE ASSESSEE SHALL FURNISH ALL THE NECESSARY DETAILS / EVIDENCE WHICH THE AO MAY REQUIRE INCLUDING THE RELATIONSHIP OF DONORS WI TH THE ASSESSEE, OCCASION FOR MAKING THE GIFTS, EVIDENCE O F GIFTS MADE BY THE ASSESSEE TO THE FAMILY MEMBERS OF THE DONORS , BANK ACCOUNTS OF THE DONORS, NECESSARY EVIDENCE IN SUPPO RT OF THE CAPACITY OF THE DONORS TO MAKE THE GIFTS, ETC., THE AO WILL EXAMINE THE DETAILS AS WELL AS THE DONORS AND READJ UDICATE THE ADDITION OF RS.9,07,224/- AFRESH IN ACCORDANCE WITH LAW KEEPING 12 IT A NO.1583/AHD/2009 IN VIEW THE DECISION OF THE ITAT THIRD MEMBER IN TH E CASE OF SUSHIL KUMAR MOHNANI VS. ITO [2011] 131 ITD 237 (JA B) (TM). 11 IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT TODAY ON 14-10-2011 SD/- SD/- (G D AGARWAL) VICE-PRESIDENT (T K SHARMA) JUDICIAL MEMBER DATE : 14-10-2011 COPY OF THE ORDER FORWARDED TO: 1. SHRI JAYVADAN RAMNIKLAL KAPADIA, 9/464, STORE SH ERI, WADIFALIA, SURAT 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE- 3, SURAT 3. CIT CONCERNED 4. CIT(A)-II, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-B, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD