Shri Amratlal Natverlal Nanavati, Surat V. The ACIT., Circle-7, Surat

ITA 183/AHD/2005

• Counselvise Citation: 18320514 RSA 2005
• Duration Of Justice: 6 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 20-01-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAVDR
• Assessee Lawyers: J P SHAH
• Keywords: Unexplained cash credit; Gift; Business income; Salary income; Corroborative evidences; Onus to prove
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI T K SHARMA, JUDICIAL MEMBER AND SHRI A N PAHUJA, ACCOUNTANT MEMBER ITA NO.183/AHD/2005 (ASSESSMENT YEAR:-2001-02) 1..SMT. ILABEN A NANAVATI, 2.SHRI HITENDRA A NANAVATI 3.SHRI DIPAKBHAI A NANAVATI 4.SMT. MAYABEN S KAPADIS LEGAL HEIRS OF LATE SHRI AMRATLAL NATVERLAL NANAVATI, PROP. M/S SURAT TYRES & OIL CENTRE,SHOP NO.2,SURAT TRADE HOUSE,UNA PANI ROAD, SURAT V/S ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-7, AAYAKAR BHAVAN,MAJURA GATE, SURAT PAN: [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI J P SHAH, AR REVENUE BY:- SHRI B L YADAV,DR DATE OF HEARING:- 26.8.2011 DATE OF PRONOUNCEMENT:- 30.8.2011 O R D E R A N PAHUJA: THIS APPEAL BY ASSESSEE FILED ON 20.1.2005 AGAINST AN ORDER DATED 19-11-2004 OF THE LD. CIT(APPEALS)-V, S URAT, FOR THE ASSESSMENT YEAR 2001-02, RAISES THE FOLLOWING GROU NDS:- [1] THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) H AS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION ON ACCOUNT OF GIFTS AMOUNTING TO RS.9,50,000/-. [2] IT IS, THEREFORE, PRAYED THAT THE ABOVE ADDITIONS CO NFIRMED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) BE DELETED. [3] THE APPELLANT PRAYS FOR GRANTING SUCH OTHER RELIEF AS MAY BE DEEMED JUST AND PROPER BY YOUR HONOURS CONSIDERING THE FA CTUAL AND LEGAL ASPECTS OF THE CASE OF THE APPELLANT. [4] THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, DE LETE, SUBSTITUTE OR MODIFY ANY OR ALL OF THE GROUNDS OF APPEAL. 2 ITA NO.183/AHD/2005 2 ADVERTING TO GROUND NO.1 IN THE APPEAL FIRST, FAC TS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT THE RETURN DECLARING I NCOME OF RS.9,43,370/- FILED ON 31-10-2001 BY THE ASSESSEE, TRADING IN TUBES AND TYRES, WAS SELECTED FOR SCRUTINY WITH THE SERVI CE OF A NOTICE U/S 143(2) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER RE FERRED TO AS THE ACT]. ON VERIFICATION OF THE CAPITAL ACCOUNT OF T HE ASSESSEE, THE ASSESSING OFFICER [AO IN SHORT] NOTICED THAT THE ASSESSEE CREDITED AN AMOUNT OF RS.9,50,000/- ON ACCOUNT OF GIFT, WITH OUT GIVING ANY RELEVANT DETAILS THEREOF. ACCORDINGLY, VIDE ORDER SHEET ENTRIES DATED 21-11-02 AND 1-8-03, FOLLOWING DETAILS WERE CA LLED FOR FROM THE ASSESSEE:- [1] A COPY OF CHEQUE / DRAFT ISSUED BY THE DONOR. [2] A COPY OF BANK A/C. AND CONFIRMATION OF THE DON OR. [3] SOURCE OF INCOME OF THE DONOR TO KNOW HIS CAPAC ITY TO GIFT SUCH AN AMOUNT AND CREDITWORTHINESS. [4] A COPY OF THE ASSESSEE'S BANK A/C., WHEREIN HE HAD DEPOSITED THE CHEQUE / DRAFT OF GIFT. [5] OCCASION FOR THE GIFT AND RELATIONSHIP WITH THE DONOR. 2.1 SINCE THE ASSESSEE DID NOT FURNISH COMPLETE D ETAILS, THE ASSESSEE WAS REQUESTED TO FURNISH THE REMAINING DET AILS AS AT 3,4 & 5 ABOVE AND ALSO STATE AS TO WHETHER IN PAST ALSO THE ASSESSEE HAD RECEIVED SUCH GIFTS FROM THE SAME DONORS I.E. SHRI DAYALBHAL AHIR AND SHRI HARESHBHAL AHIR AND ALSO AS TO WHETHER THE ASSESSEE RECIPROCATED BY GIVING THE GIFTS TO THE DONORS. THE ASSESSEE FURNISHED HIS REPLY VIDE LETTER DATED 11-11-03. AFT ER CONSIDERING THE REPLY OF THE ASSESSEE, THE AO OBSERVED THAT THE AS SESSEES RELATION WITH THE DONORS WAS NOT A BLOOD RELATION NOR ANY SO CIAL RELATION, BUT AN EMPLOYEE AND EMPLOYER RELATION THAT TOO 30 YEARS EARLIER. MOREOVER, THE CASTE AND SOCIAL STATUS OF BOTH THE D ONOR AND DONEES WERE DIFFERENT AND THERE WAS VAST ECONOMICAL GAP BE TWEEN THE DONORS AND THE DONEES. WHILE REFERRING TO THE NRE BANK ACCOUNTS OF SHRI DAYALBHAI AHIR AND SHRI HARISHBHAI AHIR, TH E DONORS, THE AO OBSERVED THAT THEY HAD GIVEN CHEQUES WORTH RS.50 LA CS TO THE NANAVATI FAMILY, AGAINST THE HELP OF JUST FEW THOUS ANDS OF RUPEES. 3 ITA NO.183/AHD/2005 AS REGARDS THE OCCASION OF GIFTS, THE ASSESSEE CONT ENDED THAT SHRI DAYALBHAI AHIR AND SHRI HARESHBHAI AHIR HAD PUT IN LONG SERVICE WITH THE DONEE FAMILY AND ALSO BECAUSE THEY WERE ECONOMI CALLY HELPED IN THEIR DIRE NEEDS, IN RECOGNITION OF LOVE AND AFFEC TION, THE DONOR HAD GIFTED THE AMOUNTS. HOWEVER, THE AO DID NOT ACCEPT THESE CONTENTIONS OF THE ASSESSEE AND ADDED AN AMOUNT OF RS.9,50,000/- WITH THE FOLLOWING OBSERVATIONS:- THE ASSESSEE CLAIMS THAT SHRI DAYALBHAI AND HARESHBHAI WERE EMPLOYEES OF THE ASSESSEE AND THAT HE HAD HELPED THEM T O BUY THE AIR TICKETS TO DUBAI. THE ASSESSEE WAS REQUESTED, VIDE THIS OFFI CE ORDER SHEET ENTRY DATED 27-11-03, TO GIVE NECESSARY EVIDENTIAL PRO OF REGARDING EMPLOYMENT OF SHRI DAYALBHAL AND HARESHBHAI WITH THE NANAVATI FAMILY DURING THE PERIOD 1974-76 (DAYALBAHI) AND 1994-1998 (HARESHBHA) AND ALSO THE EXPENSES INCURRED BY THE FAMILY IN SENDING THEM TO DUBAI AS STATED BY THE ASSESSEE. HOWEVER, THE ASSESSEE HAS NOT FURNISHED ANY SORT OF REPLY TO THIS QUERY. THUS, THE MAIN CAUSE WHICH BECAME THE INSTRUMENT FOR RECEI VING THE GIFTS BY THE ASSESSEE I.E. OCCASION, THE EMPLOYMENT OF DAYALBBH AI & HARESHBHAI, MONETARY HELP AT THEIR NEEDY HOURS AND SEN DING THEM TO DUBAI - ALL ARE NOT VERIFIABLE. WHEN THE BASIS ON WH ICH THE WHOLE STORY OF GIFT IS BUILT IS NOT VERIFIABLE, THE ASSESSEE'S CONTENTION THAT THE DONORS WERE EMPLOYEES OF DONEE FAMILY AND THEY HAD HELPED MONETA RILY BOTH THE DONORS IN GOING TO DUBAI IS NOT AT ALL BELIEVABLE AND THEREFORE THE WHOLE ISSUE OF GIFTS IS REJECTABLE. AS REGARDS THE CREDITWORTHINESS OF THE DONORS, THE ASSESSEE IN HIS LETTER DATED 11-11-03 HAD STATED THAT SHRI DAYALBHAI'S ANNUA L INCOME IS AROUND RS.50 LACS, BESIDES ACCUMULATED FUNDS AND ALSO THAT HARESHBH AI WAS EARNING AROUND RS.4 LACS PER ANNUM FROM M/S. ALKA TRADIN G AND ALSO RECEIVING RS.5 LACS PER ANNUM FROM HIS UNCLE. THE ASSESSEE WAS REQUESTED TO GIVE THE EVIDENTIAL PROOF REGARDING THE IR INCOME AND ACCUMULATION OF SAVINGS. THE ASSESSEE HAS SUBMITTED THAT SIN CE IN DUBAI, NO INCOME-TAX IS PAYABLE, AND ALL THE PURCHASE / SALES A RE IN CASH, THEY DO NOT REQUIRE TO MAINTAIN ANY BOOKS OF ACCOUNTS, AND THERE FORE, IT WAS NOT POSSIBLE FOR THE DONORS TO SEND ANY PROOF AS SUCH. THE ASSESSE E'S REPLY AGAIN IS NOT ACCEPTABLE. THE ASSESSEE WAS ALSO REQUESTED TO CALL FOR THE BANK ACCOUNTS OF THE DONORS AT DUBAI. AT LEAST, THE BANK ACCOUNTS OF THE DONORS AT DUBAI COULD HAVE BEEN MADE AVAILABLE. THE D ONOR'S CREDITWORTHINESS IS ALSO NOT VERIFIABLE. THE ASSESSEE HAS P RODUCED DONOR'S NRE A/CS. MAINTAINED IN INDIA ONLY AS REPRODUCED ABOVE. 4 ITA NO.183/AHD/2005 THE ASSESSEE HAS EVIDENTLY FAILED TO GIVE ANY CONCRETE PRO OF AS SQUIRED. HOWEVER, THE ENQUIRES CONDUCTED BY THIS OFFICE REVEALED THE FOLLOWING FACTS:- [1] SHRL DAYALBHAL AHLR AND HIS NEPHEW SHRI HARESHBHA I AHIR, BOTH THE DONORS BELONG TO A SMALL VILLAGE KUDLANA NEAR SURAT A ND ARE FROM ECONOMICALLY BACKWARD BACKGROUND. [2] THE FATHER OF SHRI HARESHBHAI AHIR, SHRI GOVINDB HAI AHIR IS EMPLOYED AS A PEON IN THE STATE GOVERNMENT DEPARTMEN T IN SURAT. [3] THE WIFE AND CHILDREN OF SHRL HARISHBHAI AHIR ARE STAYING WITH SHRL GOVINDBHAL AHIR AT KUDLANA VILLAGE AND THEY ARE DOI NG AGRICULTURAL ACTIVITIES AND ALSO ARE DOING CATTLE BREEDING ACTIVITIES TO MAINTAIN THEMSELVES. [4] SHRL HARESHBHAI AHIR IS EMPLOYED AS A SALESMAN IN A CLOTH SHOP AT DUBAI AND DRAWS A SALARY UPTO RS.10,000/- P.M. [5] SHRI HARESHBHAI AHIR STAYS IN DUBAI IN A RENTED HO USE WHICH IS SHARED BY OTHER THREE FRIENDS. [6] THE FINANCIAL POSITION OF SHRI HARESHBHAL IS NORMAL AND NOT SO SOUND AS TO GIFT SUCH HUGE AMOUNT OF RS.50 LACS. [7] SHRI HARESHBHAI AHIR HAS SENT RS.25,000/- TO 30,00 0/- ONLY IN LAST TWO YEARS TO HIS FAMILY MEMBERS IN INDIA. [8] SHRI GOVINDBHAI AHIR HAS NO FAMILY RELATION WITH NANAVATI FAMILY. BECAUSE HIS SON WAS EMPLOYED WITH NANAVATI FAMILY, HE H AS ONLY A COURTESY RELATION WITH THEM. [9] SHRL DALAYBHAI AHIR IS YOUNGER BROTHER OF SHRL G OVINDBHAI AHFR. [10] SHRI GOVLNDBHAI AHIR DOES NOT KNOW AS TO WHEN DI D SHRI DAYAIBHAI AHIR GO TO DUBAI AND AS TO WHO HELPED SHRI DAYAIBHAI IN GOING TO DUBAI. THUS, BOTH THE BROTHERS HAD NO CORDIAL RELATIONS. THERE FORE, HARESHBHAI AHIR'S EMPLOYMENT IN DAYAIBHAI'S SHOP IS A CONCOCTED STOR Y. [11] NEITHER GOVINDBHAI AHIR NOR THE WIFE AND CHILDR EN OF SHRI HARESHBHAI AHIR HAVE EVER RECEIVED ANY GIFT FROM HARE SHBHAI AHIR EXCEPT THE MONETARY HELP PF RS.5 TO 10 THOUSAND ONCE IN A BL UE MOON. [12] SHRI GOVINDBHAI AHIR DOES NOT KNOW ABOUT THE GIF T OF RS.2,50,000/- TO SHRI AMRATLAL NANAVATI AND THAT HE WAS ASTONISHED W HEN HE WAS ENQUIRED ABOUT THE ABOVE GIFTS TO AMRATLAL NANAVATI . 5 ITA NO.183/AHD/2005 13] SHRI GOVINDBHAI STATED THAT SHRI HARESHBHAL AHIR IS NOT SO AFFLUENT SO TO GIVE A HUGE AMOUNT OF RS.2,50,000/- AS GIFT. IF SHRL HARESHBHAI WAS AN AFFLUENT PERSON, HE SHOULD HAVE FIRST TAKEN CARE OF H IS FAMILY AND UPLIFTED FOR THE PURPOSE OF WHICH HE HAD GONE TO DU BAI. IT IS NOT UNDERSTANDABLE AS TO HOW A PERSON WHO IS STILL NOT SO SOUND TO UPLIFT HIS FAMILY MEMBERS LANGUISHING IN ABJECT POVERT Y COULD GIVE THE GIFT TO THE FAMILY WHO HAS A SOUND ECONOMICAL BACKGROUND. THE DONORS AND THE DONEE (THE ASSESSES) ARE COMING FROM TWO DIFFERENT STATUS OF THE SOCIETY. ON ONE SIDE THE DONORS ARE BASICALLY POOR FARMER S AND HAVE GONE ABROAD TO UPLIFT THEMSELVES AND THEIR FAMILY MEMBERS, AND ON THE OTHER SIDE THE ASSESSEE BELONGS TO ON AFFLUENT FAMILY. THE FAM ILIES OF THE DONORS REQUIRE THE GIFTS AND NOT THE RICH I PERSON LIKE THE A SSESSEE. IT IS ALSO SEEN THAT THERE IS NO RECIPROCATION OF THE GI FTS. THE DONORS HAVE NEVER RECEIVED ANY SUCH GIFTS FROM THE NANAVATI FAMILY N OR THE NANAVATI FAMILY HAD RECEIVED SUCH HUGE GIFTS EVER BEFORE AND AFT ER THE SAID INCIDENCE OF GIFTS. THUS, THE LOVE AND AFFECTION SHOULD NOT BE ONE SIDED AND THAT TOO FROM A PERSON FROM THE POOR BACKGROUND. I T SEEMS THAT THE SITUATION OF DAYALBHAI AND HARESHBHAL HAS BEEN MISUSED, AND EXPLOITED. THE INCOMING AND OUTGOING CASH FLOW IN THE BANK ACCOUNTS O F DAYALBHAL & HARESHBHAL AHIR (AS GIVEN BELOW) SHOWS THAT THE AMOUNTS HAVE BEEN DEPOSITED JUST BEFORE MAKING OF GIFT. IN OTHER WORDS, IT MAY BE SAID THAT THE BANKS ARE BEING USED BY SUCH PERSONS TO GIVE A LEGAL COLOUR TO THE SO CALLED GIFTS. THE CASE FALLS WITHIN THE PREVIEW OF SUPR EME COURT'S DECISION IN THE MECDOWELS CASE 154 ITR 148. ALTHOUGH THE ASSESSEE HAS FURNISHED THE CONFIRMATIONS OF B OTH THE DONORS, HE HAS FAILED TO PRODUCE THE SUPPORTING EVIDENCE REGAR DING THEIR CREDITWORTHINESS, IDENTITY OF THE PERSONS, GENUINENESS OF TRANSACTIONS AND CAPABILITY OF THE DONOR GIVING GIFT (JALAN TIMBERS VS. CIT 223 ITR 11) [GAUHAT] IN VIEW OF THE DISCUSSION IN THE ABOVE PARAS, IT IS CONCLU DED THAT THE TRANSACTIONS OF GIFTS ARE NOT GENUINE AND THE ASSESSEE HAS TRIED TO EVADE THE INCOME-TAX UNDER THE GARB OF RECEIVING GIFTS. IT IS, THEREFORE, ALSO CONCLUDED THAT GIFTS RECEIVED AND CREDITED IN THE CAPITA L A/CS. ARE UNEXPLAINED CASH CREDITS AND THEREFORE, LIABLE FOR ADDI TION TO THE TOTAL INCOME U/S.68 OF THE I.T, ACT. 3. ON APPEAL, THE LEARNED CIT(A) UPHELD THE ADDITIO N IN THE FOLLOWING TERMS:- 8. DURING THE APPELLATE PROCEEDINGS, SHRI HIREN DIWA N, C.A. ATTENDED ON BEHALF OF THE APPELLANT AND MADE HIS SUBMISSION VIDE HIS LETTER DATED 28/7/2004. THE CASE WAS DISCUSSED WITH HIM. IN HIS SUBMISSION , THE 6 ITA NO.183/AHD/2005 AUTHORIZED REPRESENTATIVE OF THE APPELLANT HAD DISCUSSED IN GRATE DETAIL THE RELATIONSHIP OF NANAVATI FAMILY WITH THE DONORS. IT HAS BEEN REITERATED BY HIM THAT SHRI DAYALBHAI AHIR HAS A GOOD BUSINESS OF TE XTILE IN DUBAI AND HE IS EARNING ABOUT RS.50 LAKHS PER ANNUM. SIMILARLY, A BOUT SHRI HARISHBHAI AHIR, IT WAS STATED THAT HE IS ALSO WORKING IN DUBAI HAVING INCOME OF RS.10 LAKHS PER ANNUM. IN HIS SUBMISSION, THE AU THORIZED REPRESENTATIVE HAS REITERATED THAT THE IDENTITY OF THE DONOR AND THEIR RELATIONSHIP WITH THE APPELLANT AND HIS FAMILY MEMBERS HAVE BEEN ESTABLISHED, THE GIFT HAS BEEN MADE TO THE APPELLANT T HROUGH NRE ACCOUNTS OF THE TWO DONORS. ACCORDING TO HIM, THE DONORS H AVE SUFFICIENT FUND TO MAKE GIFT AND THEREFORE IN VIEW OF THESE FACTS T HE ASSESSING OFFICER WAS NOT JUSTIFIED IN TREATING THE GIFTS TO BE NON-GEN UINE AND ALSO TREATING THE SAME AS UNEXPLAINED CASH CREDIT IN THE CAPITAL ACCOUNT OF THE APPELLANT. 9. A COPY OF THE SAID REPLY OF THE AUTHORIZED REPRESENTA TIVE WAS GIVEN TO THE ASSESSING OFFICER AND A REMAND REPORT WAS CALLED FO R. THE ASSESSING OFFICER HAS SUBMITTED HIS REMAND REPORT DATED 20/9/2004 AND A COPY OF THE SAME WAS GIVEN TO THE APPELLANT ON 23/9/2004 FOR HIS CO UNTER COMMENTS AND THE SAME WAS RECEIVED ON 11/10/2004. IN HIS REMAND R EPORT, THE ASSESSING OFFICER HAS REPEATED THE SAME OLD FACTS WHICH WERE DISCUSSED BY HIM IN THE ASSESSMENT ORDER. SIMILARLY, IN RESPONSE T O THE REMAND REPORT, AUTHORIZED REPRESENTATIVE OF THE APPELLANT HA S ALSO REPEATED THE SAME ARGUMENTS WHICH WERE MADE BEFORE THE UNDERSIGNED VIDE HIS REPLY DATED 28/7/2004. 10. IN HIS SUBMISSION THE AUTHORIZED REPRESENTATIVE HAS R EFERRED TO THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS ORISSA CORPORATION PVT. LTD. 159 ITR 78. IN THIS CASE THE HON 'BLE SUPREME COURT HAS OBSERVED THAT WHEN THE ASSESSEE HAD GIVEN THE NAMES A ND ADDRESSES OF THE ALLEGED CASH CREDITORS AND WHEN THE REVE NUE APART FROM ISSUING SUMMONS U/S 131 OF THE ACT, PURSUE THE MATTER FUR THER, THE ASSESSEE COULD NOT BE EXPECTED TO DO ANYTHING FURTHER. HON' BLE COURT WENT TO OBSERVE THAT THE REVENUE DID NOT EXAMINE THE SOURCE O F THE INCOME OF THE SAID CASH CREDITORS TO FIND OUT WHETHER THEY WERE CRE DIT WORTHY OR WERE SUCH WHO COULD ADVANCE THE LOANS. THE AUTHORIZED REPRE SENTATIVE OF THE APPELLANT ALSO REFERRED TO ANOTHER DECISION OF HON'BL E SUPREME COURT OF INDIA DELIVERED IN THE CASE OF CIT VS DAULATRAM RAWATMUL L 87 ITR 349, WHEREIN IT HAS BEEN HELD THAT 'TO REQUIRE THE FIRM O R PARTNERS THEREOF TO ADDUCE PROOF OF THE SOURCES FROM WHICH THE DEPOSIT WAS MAD E BY THE THIRD PARTY WOULD BE PLACING A BURDEN ON THE FIRM WHICH IS NO T REQUIRED OR JUSTIFIED BY THE LAW.' IN THE ABOVE CASE, THE HON'BLE SU PREME COURT AFFIRMED THE JUDGEMENT OF HON'BLE ASSAM HIGH COURT TO THE EFFECT THAT THE ASSESSEE COULD NOT BE BURDENED WITH THE EXPLANATION OF TH E SOURCES OF FUNDS ADVANCED BY THE THIRD PARTY. SIMILARLY, RELYING ON THE PATNA HIGH COURT IN THE CASE OF SAROGI CREDIT CORPORATION VS CIT 103 ITR 344, THE AUTHORIZED REPRESENTATIVE ARGUED THAT ONCE THE NAMES AN D ADDRESSES OF THE CASH CREDITORS ARE SUBMITTED, THE BURDEN IMMEDIATEL Y SHIFTS ON THE DEPARTMENT TO SHOW AS TO WHY THE ASSESSEE'S CASE SHOULD NOT B E 7 ITA NO.183/AHD/2005 ACCEPTED AND THAT THE ENTRY THOUGH PURPORTING TO BE IN THE NAME OF THIRD PARTY IS STILL REPRESENTING THE INCOME OF THE THIRD PART Y FROM THE SUPPRESSED SOURCE. THE AUTHORIZED REPRESENTATIVE ALSO REFERRED TO T HE VARIOUS CASE LAWS IN THIS REGARD. WITH REGARD TO THE RECEIPT OF GIF TS BY THE APPELLANT, THE ASSESSING OFFICER OBSERVED IN ASSESSMENT ORDER THAT THERE I S NO BLOOD RELATIONSHIP OR SOCIAL RELATIONSHIP BETWEEN THE APPELL ANT AND THE DONORS. THEREFORE, THERE IS ALSO NO SUCH CONDITION/OCCASION TO RE CEIVE THE GIFTS. IN THIS REGARD, THE AUTHORIZED REPRESENTATIVE HAS REFERRE D TO THE DECISION OF- HON'BLE ITAT AMRITSAR IN THE CASE OF ASHWINI KUMAR CARD VS ASSESSING OFFICER. 97 TAXMAN-271 (AMRITSAR). IN THIS CASE, IT WAS H ELD THAT THE ABSENCE OF RELATIONSHIP BETWEEN THE ASSESSEE AND THE DONO R WAS NO GROUND TO REJECT THE ASSESSEES CLAIM. IT HAS BEEN FURTHER ARGUED BY THE AR THAT THE APPELLANT HAD SOCIAL RELATIONSHIP WITH TH E DONORS. ACCORDING TO HIM (AR), IT WAS ALREADY EXPLAINED TO THE AO AND IN SUP PORT OF SUCH CLAIM, THE PHOTOGRAPH OF THE FAMILY MEMBERS OF THE APPELLANT OCCUPYING THE HOUSE AT DUBAI WAS ALSO SUBMITTED. 11. REGARDING THE STATEMENT OF SHRI GOVINDBHAI AHIR, THE BROTHER OF SHRI DAYALBHAI AHIR, IT HAS BEEN SUBMITTED THAT ALTHOUGH TH E STATEMENT OF SHRI GOVINDBHAI WAS RECORDED BUT NO OPPORTUNITY OF CROSS EXAMI NATION WAS GIVEN TO THE APPELLANT BY THE ASSESSING OFFICER. IN THIS R EGARD, HE HAS REFERRED TO THE DECISION OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF KISHANCHAND CHELLARAM VS CIT 125 UR 713 (SC). IN THE SA ID CASE, THE HON'BLE SUPREME COURT HAS CATEGORICALLY LAID DOWN THAT SUCH MATERIAL IS NOT ADMISSIBLE AS EVIDENCE AGAINST THE ASSESSEE. IT IS FURTHE R MENTIONED BY THE AUTHORIZED REPRESENTATIVE THAT SHRI GOVINDBHAI A HIR HAS RETRACTED FROM HIS STATEMENT RECORDED BY THE ASSESSING OFFICER. IT IS ALSO SUBMITTED BY THE AUTHORIZED REPRESENTATIVE THAT SHRI GOVINDBHAI HA S SIGNED THE STATEMENT WITHOUT READING IT AND HE WAS FORCED TO SIGN THE STATEMENT. IN VIEW OF THESE FACTS, AS PER THE AUTHORIZED REPRESENTATIV E, THE RELIANCE ON THE STATEMENT OF SHRI GOVINDBHAI AHIR SHOULD NOT BE MA DE. IT IS FURTHER MENTIONED THAT IN HIS CONFIRMATION THE DONOR HAS STATED THAT AS PER THE REQUIREMENTS, HE USED TO SEND MONEY FROM DUBAI TO HIS R ELATIVE IN INDIA AND FAMILY MEMBERS. FURTHER ACCORDING TO THE AUTHORIZED REPRESENTATIVE, THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY MATERIA L WHICH SHOWS THAT THE AMOUNT OF GIFT REPRESENTS INCOME OF THE APPE LLANT BROUGHT IN THE BOOKS OF ACCOUNTS AS GIFT BY THIRD PARTY. AGAIN, IT IS SU BMITTED BY THE AUTHORIZED REPRESENTATIVE THAT IT IS NOT POSSIBLE TO DE POSIT UNACCOUNTED CASH BY THE APPELLANT IN THE NRE ACCOUNT OF THE DONORS. H E HAS FURTHER CONTENDED THAT THE DECISION IN THE CASE OF SAJANDAS & S ONS VS CIT (SUPRA) REFERRED BY THE ASSESSING OFFICER IS NOT APPLICABLE TO TH E APPELLANT'S CASE BECAUSE IN THAT CASE THE DONOR HAS REFUSED TO ADMIT TH AT HE HAD GIVEN GIFT TO THE DONEE. HERE IN THE CASE OF THE APPELLANT, THI S IS NOT THE FACT. IT HAS BEEN FURTHER STATED BY THE AUTHORIZED REPRESENTATIVE TH AT THERE IS NO RELEVANCE OF THE DECISION OF THE HON'BLE SUPREME AS HAS B EEN DELIVERED IN THE CASE OF CIT VS MCDOWEL 154 ITR 148 BECAUSE ACCEPTANCE O F GIFT BY THE ASSESSEE CANNOT BE SAID TO BE COLOURABLE DEVICE UNLESS IT IS PROVED THAT THE DONOR WAS ACCOMMODATED BY REPAYING EQUIVALENT AMOUNT OF CASH. IN VIEW OF THE ABOVE REFERRED SUBMISSION, IT WAS SUBMITTE D BY THE HIM THAT 8 ITA NO.183/AHD/2005 SINCE THE DONORS ARE IDENTIFIED AND THEY HAVE CONFIRMED THE FACT OF GIVING THE GIFT, THEREFORE, THERE IS NO JUSTIFICATION FOR NOT ACCEPTING THE GIFT AS GENUINE ONES. 12. I HAVE CAREFULLY GONE THROUGH THE OBSERVATIONS OF TH E ASSESSING OFFICER IN THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE BEFORE ME ON DIFFERENT DATE S. IT IS SEEN THAT THE APPELLANT HAS NOT PRODUCED ANY CONCRETE DOCUMENTARY EVIDEN CE REGARDING THE GENUINENESS OF THE GIFTS AS HIS SUBMISSION THAT THE DON ORS DID NOT HAVE ANY BOOKS OF ACCOUNTS OR BANK ACCOUNT MAINTAINED IN THEIR R ESPECTIVE PLACE OF BUSINESS IS OF NO AVAIL. THE OTHER RELATED FACTS WHICH EMERGED OUT OF THE PERUSAL OF THE DETAILS ARE THAT THE BOOKS OF ACCO UNTS ARE NOT MAINTAINED BY THE DONORS FOR THE REASON THAT THE BOOKS A RE NOT NECESSARY TO BE MAINTAINED ACCORDING TO THE LAW PREVAILING IN DU BAI AND NO TAXES ARE LEVIED ON BUSINESS INCOME. THE MONEY IS ALSO NOT KEPT IN THE BANK ACCOUNT BECAUSE ACCORDING TO THE DONORS THE BANK CHARGES MO NEY FOR MAINTENANCE OF THE ACCOUNT. THERE IS NO WITHDRAWAL OF M ONEY FROM THE BANK ACCOUNT MAINTAINED IN DUBAI FOR GIVING THE GIFT. T HE GIFT HAS BEEN GIVEN OUT OF CASH ACCUMULATION WHICH WAS KEPT AT HOME I N DUBAI BY THE DONORS. THE DRAFTS DEPOSITED IN THE NRE ACCOUNT OF THE D ONORS WERE PURCHASED OUT OF THE CASH KEPT AT HOME. IN THIS WAY, THE GIFTS ARE NOT VERIFIABLE WITH REFERENCE TO ANY BOOK ENTRY OR BANK ENT RY AND THE ONLY EVIDENCE RELATING TO THE ENTRY IS AVAILABLE IN THE FORM OF DEPOSIT OF DEMAND DRAFTS IN THE NRE ACCOUNTS OF THE DONORS WHICH HAVE BEEN REFERRED ABOVE. ALTHOUGH, IT HAS BEEN CLAIMED BY THE DONOR, NAMELY, SHR I DAYALBHAI AHIR THAT HE IS HAVING INCOME OF RS.50 LAKHS PER ANNUM BUT THI S FACT IS NOT VERIFIABLE WITH THE HELP OF ANY DOCUMENTS. AS PER THE RE GULATIONS OF GOVERNMENT OF DUBAI, A FOREIGNER CANNOT HAVE A BUSINESS I N HIS SINGLE NAME AND HE HAS TO TAKE A LOCAL PERSON AS PARTNER GIVING HIM 50% SHARE. IF IT IS SO, SOME BOOKS OF ACCOUNTS MAY BE NECESSARY TO ASCERTA IN THE PROFIT OF THE OTHER PARTNER, ALSO A PERSON DERIVING BUSINESS INCO ME WOULD LIKE TO KNOW HIS PROFIT TOWARDS THE END OF THE DAY AND FOR THI S PURPOSE HE WILL LIKE TO MAINTAIN SOME FORM OF ACCOUNTS. THE SUBMISSION OF THE D ONOR THAT HE IS NOT MAINTAINING ANY BOOKS OF ACCOUNTS APPEARS TO BE A FALSE STATEMENT LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE. FROM THE LEASE DOCUMENT FOR RESIDENCES AND THE SHOPS, IT IS SEEN THAT THE RENT IS PAID THROUGH CHEQUE AND THIS FACT PROVES THAT THERE IS A PRACTI CE OF PAYMENT THROUGH BANKING CHANNEL. THUS, ON THE BASIS OF THESE FA CTS, I DO NOT ACCEPT THE CLAIM OF THE DONORS THAT THE MONEY IS NOT KEPT IN T HE BANK BUT AT HOME. IT IS ALSO A FACT THAT KEEPING HUGE MONEY AT HOME ENTAI LS OF RISK SUCH AS FEAR OF THEFT AND ROBBERY. IT IS ALSO KNOWN FACT THAT AT DUBAI, ONE OF THE MODERN CITIES THE BANKS ARE DOING THRIVING BUSINESS OVER TH ERE WITH VARIOUS KINDS OF FACILITIES, AND IN VIEW OF THAT NO PRUDENT BUSIN ESSMAN WOULD LIKE TO KEEP HUGE AMOUNT OF MONEY AT HORNS AT THE COST OF ALL KIN DS OF RISKS. IT IS ALSO SEEN (AS STATED ABOVE) THAT THE DONORS HAVE NOT MADE ANY OTHER DEPOSITS M THE NRE ACCOUNTS AND HAVE NOT MADE ANY WORTH M ENTIONING INVESTMENT IN THEIR VILLAGE. IT IS A COMMON HUMAN NATURE TO HAVE PROPERTIES IN THE FORM OF GOOD HOUSE AT NATIVE PLACE OR IN NEA RBY TOWN FOR THE REHABILITATION OF THE FAMILY, IF ONE BECOMES RICH. ON T HE BASIS OF THE ABOVE 9 ITA NO.183/AHD/2005 INVESTIGATIONS CARRIED OUT BY THE ASSESSING OFFICER AND THE FACTS BROUGHT BY HIM ON RECORD, IT IS FOUND THAT SHRI DAYALBHAI AHIR HA S NO SUCH INVESTMENTS EITHER IN IMMOVABLE PROPERTIES OR IN THE FORM OF REGU LAR DEPOSITS IN HIS NRE BANK ACCOUNT PROVING HIS SOUND FINANCIAL POSITION. IT IS AL SO SEEN THAT SONS OF SHRI DAYALBHAI AHIR ARE STAYING IN INDIA TILL RECEN T TIMES AND THEREFORE, FOR A RICH PERSON LIKE HIM, HE SHOULD HAVE MADE SOME IN VESTMENT IN CONSTRUCTING A GOOD HOUSE OR AT LEAST PURCHASING COMFORTABL E PLACE FOR HIS FAMILY FOR STAY IN OR AROUND SURAT. IT IS GATHERED FROM THE FACTS THAT THE FAMILY OF THE APPELLANT HELPED SHRI DAYALBHAI AHIR BY GIVING RS.5,000/- FOR GOING HIM TO DUBAI ABOUT 30 YEARS AGO. SHRI DAYALBHAI HAD SERVED AT THE PETROL PUMP OF THE APPELLANT FOR TWO YEARS ONLY SOMEWH ERE AROUND 1974 TO 1976 AND THAT DEVELOPED INTO A RELATIONSHIP WHICH PROM PTED HIM TO MAKE GIFT OF RS.25 LAKHS TO THE APPELLANT AFTER ABOUT A LAP SE OF 30 YEARS. IT IS A FACT ON RECORD THAT THE DONEE HAS NEVER VISITED DUBAI B EFORE RECEIVING A NOTICE FROM THE DEPARTMENT AND THIS FACT HAS BEEN MENTI ONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. IF THE RELATIONSHI P BETWEEN THE DONORS AND THE DONEE HAS BEEN SO SWEET, THEN THE DONORS MUST HAVE CALLED THE APPELLANT TO VISIT DUBAI MUCH EARLIER AND TH EY WOULD HAVE GIVEN THE GIFT AT TIMES AND OCCASIONS DURING THESE 30 YEARS, PREF ERABLY ON EARLIER OCCASIONS IN THE FOND MEMORY OF HELP GIVEN BY THE APPELLAN T. THE STORY NARRATED BY THE APPELLANT SPEAKS OF A VERY HIGH LEVEL OF R ELATIONSHIP WHICH IS NORMALLY NOT FOUND IN AN EXISTENCE IN THE LIKEWISE SITUA TION IN THE SOCIETY. IT IS-ALSO STRANGE TO NOTE THAT THE DONEE HAS NEVER GIVEN ANY GIFT TO THE DONORS DURING THE RELATIONSHIP OF 30 YEARS AND THE DONO RS HAVE BEEN SO MAGNANIMOUS AND LARGE HEARTED THAT THEY GIFTED RS.25 L AKHS EACH TO THE FAMILY OF THE DONEES WHICH IS IMPOSSIBLE TO BELIEVE. 13. THE PHOTOGRAPHS OF THE FAMILY OF THE DONORS AND T HE APPELLANT DID NOT PROVE ANYTHING. THEY ARE RECENT PHOTOGRAPHS TAKEN JUST TO SHOW THAT BOTH OF THEM ARE MAINTAINING VERY CORDIAL RELATIONSHIP. THE STORY OF RELATIONSHIP SOUNDS GOOD BUT THE SAME IS FAR AWAY FROM N ORMAL DAY TO DAY HUMAN BEHAVIOUR AND THEREFORE IT IS NOT POSSIBLE TO BE LIEVE. APART FROM ALL THESE FACTS, THE APPELLANT COULD NOT PRODUCE ANY PROOF SHOWING THAT THE APPELLANT HAD EVER EMPLOYED THE DONORS SUCH SHRI DAYAL BHAI AHIR FOR TWO YEARS FROM 1974 TO 1976 AND SHRI HARISHBHAI AHIR FROM 1994 TO 1998 AND ALSO ABOUT THE HELP DONORS RECEIVED WHILE GOING ABROAD . IN THE CASE OF CASH CREDIT, IDENTITY OF THE CREDITOR, CREDIT WORTHINESS O F THE CREDITOR AND THE GENUINENESS OF CASH CREDIT HAS TO BE PROVED. CONSIDERING THE FACTS OF THE CASE, I AM OF THE VIEW THAT THE ONLY IDENTITY OF THE CRED ITOR IS PROVED AND THE OTHER TWO FACTORS HAVE NOT BEEN PROVED BEYOND DOUBT . 14 AS REGARDS GIFT GIVEN BY SHRI HARISHBHAI AHIR, IT ALSO STANDS ON THE SAME FOOTING RATHER THAN ON WEAKER FOOTING THAN THAT OF THE ALLEGED GIFT GIVEN BY SHRI DAYAIBHAI AHIR. IN 1998, HE WAS A POOR MAN WHO STARTED WORKING IN DUBAI ON SALARY BASIS. HE HAS NOT DEPOSITED TH E SALARY IN ANY BANK AT DUBAI, THEREFORE, THERE IS NO PROOF OF EARNIN G SUBSTANTIAL SALARY INCOME. IF HIS INCOME WAS SO GOOD, HE WOULD HAVE CERTAINL Y CALLED HIS FAMILY TO DUBAI TO STAY WITH HIM OR WOULD HAVE TRIED TO KEEP THE FAMILY, ESPECIALLY HIS WIFE AND CHILDREN IN A COMFORTABLE POSITION AT HIS NATIVE 10 ITA NO.183/AHD/2005 PLACE RATHER THAN FORCING THEM TO LIVE IN A POOR STATE AND CARRYING OUT THE WORK OF CATTLE REARING. IN THE BANK ACCOUNT AT SURAT AL SO THERE HAS NOT BEEN ANY REMITTANCE OTHER THAN FOR AN AMOUNT WHICH HAS BEEN GIFTED TO THE APPELLANT. HAD THERE BEEN ANY DEPOSIT IN HIS NRE ACCOUN T OTHER THAN THE AMOUNT GIFTED AWAY, IT WOULD HAVE DEFINITELY PROVED TO SOME EXTENT HIS FINANCIAL CAPACITY AND STABILITY. HIS FATHER IS WORKING AS PE ON AT SURAT IN SOME GOVERNMENT DEPARTMENT. AFTER READING THE STATEMEN T RECORDED U/S 131 BY THE ASSESSING OFFICER, IT CAN BE CONCLUDED THAT HE HA S BEEN A MAN OF MEAGRE RESOURCES AND NO RICH SON WHO IS CAPABLE OF GI FTING AWAY HUGE SUM OF RS.25 LAKHS IN A YEAR TO A THIRD PARTY, WOULD LI KE HIS FATHER AND FAMILY TO LIVE IN A POOR CONDITION IN A VILLAGE AND WOR K AS A PEON OR CARRYING OUT ANIMAL ACTIVITIES. THEREFORE, THOUGH, HE HAS CONFIRM ED THE GIFT, IT COULD NOT BE TREATED AS GENUINE IN VIEW OF THE FACTS STATED AB OVE. THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT WAS ALLOWE D TO CROSS EXAMINATION SHRI GOVINDBHAI AHIR AND IN RESPONSE TO T HE QUESTION ASKED BY HIM (THE AUTHORIZED REPRESENTATIVE), SHRI GOVINDBHAI AHIR EXPRESSED HIS IGNORANCE ABOUT THE RICHNESS OF HIS SON SHRI HARISHBHA I AHIR. SHRI GOVINDBHAI AHIR HAS CATEGORICALLY STATED IN RESPONSE TO T HE QUESTION POSED BY THE AUTHORIZED REPRESENTATIVE THAT HE IS NOT KNOWN TO THE APPELLANT ARID HIS FAMILY MEMBERS NOR HE IS AWARE ABOUT THE EARNING CAPACITY OF HIS SON SHRI HARISHBHAI AHIR. HE HAS VERY CLEARL Y ADMITTED DURING THE COURSE OF CROSS EXAMINATION CARRIED OUT BY TH E AUTHORIZED REPRESENTATIVE OF THE APPELLANT THAT SOMETIMES, ONCE IN BLUE MOON, SHRI HARISHBHAI AHIR USED TO SEND RS.5,000/- OR RS.10,000/- F OR THE MAINTENANCE OF THE FAMILY AND BEYOND THIS, HE NEVER CARED FOR THE FAMILY OR FOR HIMSELF I.E. SHRI GOVINDBHAI AHIR. BUT EVEN WIT HOUT THE HELP OF THE STATEMENT OF SHRI GOVINDBHAI AHIR, ON THE BASIS OF THE FACTS NARRATED ABOVE, IT CAN BE HELD THAT SHRI HARISHBHAI AHIR IS NOT A CREDITWORTHY PERSON TO MAKE SUCH A HUGE GIFT AS THERE IS NO EVIDENCE ABOUT HIS SOUND FINANCIAL STATUS EXCEPT THE LETTER OF CONFIRMATION OF SHRI DAYALBH AI AHIR THAT HE IS A HELPING HAND IN HIS EARNING. IF SHRI HARISHBHAI AHIR WAS REALLY RICH, HE WOULD HAVE DEPOSITED TONEY REGULARLY IN HIS NRE ACCOUNT. D URING THE APPELLATE PROCEEDINGS, THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT ALSO CITED VARIOUS COURT DECISIONS IN SUPPORT OF HIS CONTENTIONS. AFTER GOING THROUGH THE DECISIONS AS CITED BY HIM, IT IS SEEN THAT IN SUCH CASES, THE FINDINGS OF THE ASSESSING OFFICERS WERE NO SUPPORTED BY CO NCRETE EVIDENCES AND DETAILS. HERE IN THE CASE OF THE APPELLA NT, THE ASSESSING OFFICER HAD COLLECTED VARIOUS DETAILS SUCH AS THE DETAILS REL ATING TO THE EARNING CAPACITY OF THE DONORS, THE MODE OF TRANSFER OF MONEY TO THEIR RESPECTIVE NRE ACCOUNT IN INDIA, THE PERIOD OF DEPOSITS I N SUCH ACCOUNTS, THE FACTS RELATING TO THE RELATIONSHIP BETWEEN THE A PPELLANT AND THE DONORS ON WHICH THE ENTIRE STORY IS EVOLVED ETC. AND ON THAT BASIS IT HAS BEEN SEEN THAT THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT H AS SQUARELY FAILED TO ESTABLISH THAT THE GIFT RECEIVED BY THE APPELLANT FROM T HE DONORS ABROAD WERE GENUINE ONES. I, THEREFORE, HOLD THAT BOTH THE ALLEGED GIFTS MADE BY SHRI DAYALBHAI AHIR & SHRI HARISHBHAI AHIR, AMOUNTING TO RS.9,50,000/- ARE TREATED TO BE NON-GENUINE AND CONFIRM THE ADDITION AS MADE BY THE ASSESSING OFFICER. 11 ITA NO.183/AHD/2005 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LEARNED CIT(A). AT THE OUTSET, THE LEARNED AR ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY AN EARLIER DECISION DATED 05-09-2008 OF THE ITAT AHMEDABAD BENCH-A IN THE CASE OF SMT. ILAB EN A NANAVATI, WIFE OF THE AASSESSEE IN ITA NO.3103/AHD/2004,FOLLO WED IN DECISION DATED 21-08-2009 OF THE ITAT AHMEDABAD BENCH-B IN T HE CASE OF SHRI HITENDRA AMRATLAL NANAVATI, SON OF THE ASSESSE E IN ITA NO.2479/AHD/2004. ON THE LEARNED DR, ON THE OTHER H AND, SUPPORTED THE FINDINGS OF THE LD. CIT(A) IN THE IMPUGNED ORDE R.. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS WELL AS THE AFORESAID DECISIONS OF THE ITAT IN THE CASE OF SMT. ILABEN A NANAVATI AND SHRI HITENDRA AMRATLAL NANAVATI. WE FIND THAT WHILE ADJUDICATION A SIMILAR ISSUE IN THE CASE OF WIFE AND SON OF THE ASSESSEE , WHO ALSO RECEIVED GIFTS FROM THE SAME DONORS, THE ITAT IN THEIR ORDER DATED 05-09-2008 IN THE CA SE OF SMT. ILABEN A NANAVATI, IN ITA NO.3103/AHD/2004,HELD AS UNDER:- 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMIS SIONS AND, PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDER OF THE TAX AUTHORITIES. THIS IS AN ADMITTED FACT THAT BOTH THE PERSONS WHO GIFTE D THE AMOUNTS TO THE ASSESSEE ARE THE NON-RESIDENTS AND THEY ARE WORKING OUTSIDE INDIA. THEY HAVE SENT THE MONEY THROUGH THE PROPER BANKING CHANNEL. THE FUND HAS COME TO THE BANK. COPY OF THE PASSPORT ALONG WITH THEIR AFF IDAVITS WAS DULY FILED. THEIR IDENTITY IS NOT UNDER DISPUTE. THE ASSESSEE SUBMITT ED THE COPY OF THE PASSBOOK IN WHICH THE FUND TO THE EXTENT OF RS.40 L ACS HAS COME IN THE ACCOUNT OF SHRI DAYALBHAI AHIR AND RS.25 LACS HAS C OME IN THE ACCOUNT OF SHRI HARISHBHAI G AHIR. THIS ITSELF PROVES THAT BOTH THE PERSONS WHO HAVE GIFTED THE AMOUNTS TO THE ASSESSEE WERE HAVING THE CAPACITY TO GIFT THE AMOUNT. THEIR CREDITWORTHINESS WAS THERE. NO EVIDENCE OR MATERIAL WAS FURNISHED BEFORE US BY THE LEARNED DR WHICH MAY PROVE THAT THE FUNDS RE CEIVED BY THESE PARTIES WERE NOT GENUINE. THEREFORE, IN OUR OPINION, SHRI D AYALBHAI AHIR AND SHRI HARISHBBAI AHIR BOTH WERE HAVING THE CREDITWORTHINE SS AND THEIR CREDITWORTHINESS CANNOT BE DOUBTED. THE GENUINENESS OF THE TRANSACTIONS CAN ALSO NOT BE REJECTED IN VIEW OF THE FACT THAT THE A SSESSEE HAS RECEIVED THE GIFTS THROUGH ACCOUNT PAYEE CHEQUES AND THERE IS NO EVIDE NCE TO THE CONTRARY BEING BROUGHT ON RECORD THAT THE ASSESSEE HAS ACTUA LLY NOT RECEIVED THE FUNDS OR HAS PASSED OVER THE FUNDS IN THE FORM OF CASH TO THE DONORS. THE AO HAS NOT ALLEGED SO. THE AO MERELY HAS OBSERVED ABOUT TH E FAMILY STATUS OF SHRI 12 ITA NO.183/AHD/2005 DAYALBHAI THAT HE WAS A SMALL TYPE OF FARMER. THAT MAY BE A PAST HISTORY AND FAMILY BACKGROUND AND THAT IS ALSO ON THE BASIS OF HEAR-SAY WITHOUT BRINGING ANY CONCRETE EVIDENCE ON RECORD. RATHER THE AO HIMS ELF HAS ACCEPTED THAT HE HAS GONE OUT OF INDIA I.E. DUBAI AND IS WELL SETTLE D AND WAS HAVING HANDSOME INCOME. THE DECISION OF THE HONBLE GUJARAT HIGH CO URT IN THE CASE OF 280- ITR-512 IS FULLY APPLICABLE IN THE CASE OF THE ASSE SSEE. THE IDENTITY OF THE DONORS IS PROVED. EVEN THE SOURCE OF THE AMOUNTS GI FTED WAS ALSO ACCEPTED BY THE AO. THE ASSESSEE HAS ADDUCED THE EVIDENCE TO PR OVE THE GENUINENESS OF THE TRANSACTIONS THAT THE GIFTS WERE RECEIVED THROU GH BANKING CHANNEL. THE AFFIDAVITS OF THE DONORS WERE ALSO FURNISHED WHICH WERE NOT REJECTED BY THE REVENUE. COPIES OF THE AFFIDAVITS ARE ALSO AVAILABL E BEFORE US IN THE PAPER BOOK. THE REVENUE HAS NOT BROUGHT ANY MATERIAL ON R ECORD WHICH MAY PROVE THAT THE TRANSACTIONS ARE NOT GENUINE EXCEPT THE OB SERVATIONS MADE BY THE AO. WE ARE OF THE OPINION THAT THE ASSESSEE HAS DUL Y DISCHARGED THE BURDEN OF PROOF AND BY PRODUCING THE EVIDENCE, THE BURDEN GETS SHIFTED ON THE REVENUE. THE GIFTS HAVE BEEN TREATED TO BE NON-GENU INE MERELY ON THE BASIS OF IMAGINATION, SURMISES AND CONJECTURES. SECTION 6 8 LAYS DOWN THE RULE OF EVIDENCE. THE INITIAL BURDEN IS ON THE ASSESSEE TO PROVE THE IDENTITY OF THE CREDITOR, GENUINENESS OF THE TRANSACTIONS AND CREDI TWORTHINESS OF THE CREDITOR. WHERE THE ASSESSEE HAS DISCHARGED HIS BURDEN OF PRO OF, THE BURDEN GETS SHIFTED ON THE REVENUE. WE HAVE ALSO GONE THROUGH T HE DECISION IN THE CASE OF SMT. KUSUMLATA BANSAL V DCIT (2008) 10 DTR (AHD) (TRIB) 82. THIS DECISION ALSO, IN OUR OPINION, SUPPORTS THE CASE OF THE ASSESSEE. IN THIS CASE THE BENCH HAS DISCUSSED THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V P MOHANKALA (2007) 291 ITR 278 (SC) A ND UNDER PARA-16 HAS HELD AS UNDER: 16. IN THE CASE OF P MOHANKALA (SUPRA), THE SUPREME COURT DEALT WITH A CASE OF FOREIGN GIFTS AND THERE WAS EVIDENCE ON RECORD W HICH INDICATED THAT THE DONOR RECEIVED SUITABLE COMPENSATION FROM THE ASSESSEE AN D ON THE BASIS OF THIS MATERIAL, THE AO HELD THAT THE GIFTS, THOUGH APPARENT , WERE NOT REAL AND, ACCORDINGLY, TREATED ALL THOSE AMOUNTS WHICH WERE CR EDITED IN THE ACCOUNT BOOKS OF THE ASSESSEE AS HIS INCOME UNDER S. 68 OF THE AC T. IT WAS SPECIFICALLY NOTED BY THE SUPREME COURT THAT THE ASSESSEE DID NOT CONTEND THAT EVEN IF THAT EXPLANATION WAS NOT SATISFACTORY, THE AMOUNTS WERE N OT OF THE NATURE OF INCOME AND IN VIEW OF THE CONCURRENT FINDING OF THE AO, TH E CIT(A) AND THE TRIBUNAL, THE SUPREME COURT HELD THAT THE HIGH COURT WAS NOT JUST IFIED IN REVERSING THE SAME AND BY OBSERVING THAT THE MERE FACT THAT THE MONEY CAME BY WAY OF BANK CHEQUES AND WAS PAID THROUGH THE PROCESS OF BANKING TRANSACTION WAS NOT BY ITSELF OF ANY CONSEQUENCE. THIS IS A CLEAR CASE OF UNREAL GIFT AND WAS A RECEIPT OF COMPENSATION TO THE ASSESSEE IN THE GUISE OF GIFT A ND IN THESE CIRCUMSTANCES THE SUPREME COURT UPHELD THE ASSESSMENT OF GIFT. NO SUC H POSITION IS EMERGING IN THIS CASE. THERE IS NO ALLEGATION OF ANY SORT BY REVENUE FOR THE DONORS WERE TO BE COMPENSATED BY THE ASSESSEE FOR A SERVICE RENDERED BY THEM OR OTHERWISE TO THE ASSESSEE. THIS DECISION WOULD ALSO, THEREFORE, BE OF NO HELP TO THE REVENUE. 13 ITA NO.183/AHD/2005 WE DO AGREE WITH THE DECISION OF THE COORDINATE BEN CH AND, THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE ADDITI ON MADE U/S 68 OF THE ACT. THUS, THIS GROUND STANDS ALLOWED. 5.1 LIKEWISE, ANOTHER CO-ORDINATE BENCH VIDE THE IR ORDER DATED 21-08-2009 IN SHRI HITENDRA AMRATLAL NANAVATI IN I TA NO.2479/AHD/2004 WHILE FOLLOWING THE AFORESAID DECI SION IN THE CASE OF SMT. ILABEN A NANAVATI, DELETED THE ADDITION OF RS.8,50,000/- U/S 68 OF THE ACT. 5.2 SINCE THE REVENUE HAVE NOT PLACED BEFORE US AN Y CONTRARY DECISION NOR ANY OTHER MATERIAL SO AS TO ENABLE US T O TAKE A DIFFERENT VIEW IN THE MATTER , FOLLOWING THE VIEW TAKEN IN THE AFOR ESAID DECISIONS, WE HAVE NO ALTERNATIVE BUT TO DELETE THE ADDITION OF R S.9,50,000/- U/S 68 OF THE ACT. THUS, GROUND NO.1 IN THE APPEAL IS ALLO WED. 6. GROUND NOS.2 & 3 BEING MERE PRAYER NOR ANY SUBMI SSIONS HAVING BEEN MADE ON THESE GROUNDS, DO NOT REQUIRE A NY SEPARATE ADJUDICATION WHILE NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.4 IN THE APPEAL, AL L THESE GROUNDS ARE, THEREFORE, DISMISSED. 7. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT TODAY ON 30-08-2011 SD/- SD/- ( T K SHARMA ) JUDICIAL MEMBER ( A N PAHUJA ) ACCOUNTANT MEMBER DATED : 30-08-2011 COPY OF THE ORDER FORWARDED TO: 1. 1.SMT. ILABEN A NANAVATI, 2.SHRI HITENDRA A NANA VATI 3.SHRI DIPAKBHAI A NANAVATI, 4.SMT. MAYABEN S KAPAD IS,L/H OF LATE SHRI AMRATLAL NATVERLAL NANAVATI, PROP. OF M/S SURAT TYRES & OIL CENTRE, SHOP NO.2, SURAT TRADE HOUSE, U NA PANI ROAD, SURAT- 395 003 2. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-7, AAYAKAR 14 ITA NO.183/AHD/2005 BHAVAN,MAJURA GATE, SURAT 3. CIT CONCERNED 4. CIT(A)-V, SURAT 5. DR, ITAT, AHMEDABAD BENCH-A, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD