Manak Chand Garg, Agra V. I.T.O., 4(2), Agra

ITA 192/AGR/2007

• Counselvise Citation: 19220314 RSA 2007
• Duration Of Justice: 5 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-04-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 01-05-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PG B
• Assessee Lawyers: ANURAG SINHA SHRI A K SH
• Keywords: Reopening of assessment; Gift; Source of fund; Question of law; Corroborative evidences; Avoidance of tax; Accommodation entries; Reassessment proceedings
• Section: 133A; 147; 131; 68; 148; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.192/AGR/2007 ASSESSMENT YEAR: 2000-01 SHRI MANAK CHAND GARG, VS. INCOME TAX OFFICER 4(2 ), AGRA. B-12, NATRAJ PURAM, AGRA. KAMLA NAGAR, AGRA. (PAN: ABYPG 5266 B). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANURAG SINHA, ADVOCATE RESPONDENT BY : SHRI A.K. SHARMA, JR. D.R. DATE OF HEARING : 19.04.2012 DATE OF PRONOUNCEMENT : 08.06.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 18.10.2006 PASSED BY THE LD. CIT(A)-II, AGRA FOR THE ASSESSMEN T YEAR 2000-01 ON THE FOLLOWING GROUNDS :- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN SUSTAINING THE ADDITION OF RS.1,00,000/- REPRESENTING GIFT REC EIVED FROM SMT. NEELAM KUMARI WITHOUT PROPERLY APPRECIATING THAT TH E ASSESSEE HAS PROVED THE IDENTITY, FINANCIAL CAPACITY OF THE DONO R AND GENUINENESS OF THE TRANSACTION WHICH IS THROUGH BANKING CHANNEL S. THE DONOR WHO IS ASSESSED TO TAX HAS DULY CONFIRMED THE FACT OF GIFT. ITA NO.192/AGR/2007 A.Y. 2000-01 . 2 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN SUSTAINING ANOTHER ADDITION OF RS.2,00,000/- RECEIVED FROM SHR I RATAN SINGH AS GIFT WHO IS ASSESSED TO INCOME TAX AND HAS GIVEN GI FT THROUGH BANKING CHANNELS. SINCE THE DONOR HAS EXPIRED HIS SON WHO WAS SUMMONED U/S 131 AND WHOSE STATEMENT WAS RECORDED B Y THE LD. A.O. HAS DULY CONFIRMED THE SAID GIFT, CAPACITY OF THE D ONOR, REASON FOR GIVING THE GIFT AND THAT EVEN AFTER THOROUGH EXAMIN ATION THE LD. A.O. COULD NOT FIND ANYTHING ADVERSE. 3. THAT THE LD. AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN DISBELIEVING THE GIFTS WHICH ARE SUPPORTED BY DO CUMENTARY EVIDENCE AND BY THE STATEMENT RECORDED BY THE LD. A .O. 4. THAT THE LD. AUTHORITIES BELOW HAVE BEEN HIGHLY UNJUST AND ARBITRARY IN DISBELIEVING THE EVIDENCE OF GIFTS WIT HOUT BRINGING ON RECORD ANY CONTRARY EVIDENCE IN SUPPORT OF HIS PRES UMPTIONS. 5. THAT THE APPELLANT CRAVES TO LEAVE ADD, ALTER, A MENDS OR WITHDRAW ANY GROUND OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE APPEAL WAS HEARD ON 13.01.2009. THE ORDER WAS PRONOUNCED ON 30.01.2009. THE SAID ORDER OF I.T.A.T. IS REPRODUCED AS UNDER: - ORDER IN ITA NO.192/AGR/2007, ASSTT. YEAR: 2000-200 1, MANAK CHAND GARG VS. ITO -- THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) DATED 18.10.2006 AND PERTAINS TO A.Y. 2000-0 1. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNER IN THE FIRM, M/S. MANAK CHAND GARG & CO. AC TION U/S. 147 READ WITH SECTION 148 OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT FOR SHORT) WAS INITIATED A ND IN RESPONSE TO NOTICE ISSUED THE ASSESSEE FILED A COPY OF INCOME-T AX RETURN WHICH HE HAD ALREADY FILED ON 10.01.2001 SHOWING TOTAL INCOM E OF RS.1,22,649/- , WITH A REQUEST THAT THE ORIGINAL RETURN SHOULD BE TREATED AS RETURN ITA NO.192/AGR/2007 A.Y. 2000-01 . 3 FILED IN COMPLIANCE OF NOTICE U/S. 148. THE ASSESS EE REQUESTED THE LD. AO ON 10.11.2005 FOR SUPPLY OF COPY OF REASONS RECO RDED AND THE AO SUPPLIED IT ON THE SAME DAY. FOLLOWING REASONS WER E RECORDED BY THE AO FOR MAKING RE-ASSESSMENT : INFORMATION HAS BEEN RECEIVED VIDE LETTER F.NO.ADDL.CIT/R-4/SUVEY/2004-05 OF THE ADL. CIT, RA NGE-4, AGRA DATED 28.3.2005 THAT A SURVEY U/S. 133A WAS CO NDUCTED ON 22.4.2001 AT THE OFFICE PREMISE OF SHRI D.K. AGARWA L, CA, 245, MADHAV KUNJ, PRATAP NAGAR, AGRA. THE SURVEY PARTY H AS REPORTED THAT AS MANY AS 292 TRUSTS AND THEIR FUNDS ARE CONTROLLED BY SHRI D.K. AGARWAL. THESE TRUSTS MOSTL Y SHOW THEIR ADDRESSES AT 245-MADHAV KUNJ, 51/46-A, MADHAV KUNJ OR 41/67, LOHAR GALI, AGRA SHRI D.K. AGARWAL HAS BEEN CREATING BOGUS TRUST IN THE NAME OF GOD/GODDESSES OF WHICH H E OR HIS FAMILY MEMBERS AND HIS OTHER ASSOCIATES ARE TRUSTEE S. THESE TRUSTS DO NOT CONDUCT ANY BUSINESS BUT LARGE RECEIP T OF MONEY IS SHOWN IN THE HANDS OF TRUST BY WAY OF GIFT BUSINESS PROFIT, DONATION ETC. THE TRUST HAVE RECEIVED GIFT IN CASH FROM OTHER TRUST AND THESE TRUSTS HAVE GIVEN GIFT TO VARIOUS P ERSONS. THERE IS NO RELATIONSHIP BETWEEN DONOR AND DONEE. FURTHER MORE ONE SHRI LALIT KUMAR AGARWAL ASSESSEE OF WARD 4(2), AGRA HAS STATED THAT SHRI D.K. AGARWAL H AS CREATED BOGUS TRUST IN THE NAME OF LALIT KUMR AGARWAL AND T HAT ALTHOUGH HE HAS BEEN SHOWN AS TRUSTEE, HE HAS NO KN OWLEDGE OF THE ACTIVITIES OF THE TRUST. THE CIT(A)-II, AGRA H AS ALSO GIVEN HIS FINDING IN THE CASES OF THE TRUSTEES VISHNU BHA GWAN AGARWAL, SMT. KUSUM KUMARI, SHRI RAVINDER KUMAR, SH RI RADHA BALLABH & D.K. AGARWAL, SHRI SHITAL PRASAD JA IN THAT M/S. VISHNU BHAGWAN (P) FAMILY TRUST ARE BOGUS TRUS TS AND THE INCOME SHOWN IN THE HANDS OF TRUST ACTUALLY BELONGS IN TRUSTEE VIDE HIS APPELLATE ORDER DATED 8/9.7.2004. ALL THE SE TRUSTS ARE ACTUALLY MANAGED AND CONTROLLED BY SHRI D.K. AGARWA L, CA. IT HAS ALSO BEEN INFORMED THAT ANNEXURE-II OF SEIZE D MATERIAL DURING THE SURVEY SHOWS THAT ONE OF THE TR UST NARMADA BENEFIT TRUST, 31/67, LOHAR GALI, AGRA IS ALSO MANA GED AND CONTROLLED BY SHRI D. K. AGARWAL, CA HAS GIVEN GIFT OF RS.1,00,000/- ON 25.08.1999 TO THE ABOVE NAMED ASSE SSEE. ITA NO.192/AGR/2007 A.Y. 2000-01 . 4 IN VIEW OF THE ABOVE, IT IS CLEAR THAT SHRI D. K. A GARWAL HAS BEEN CREATING BOGUS TRUSTS WHICH ARE INVOLVED I N GIVING ENTRY OF GIFTS. AS PER INFORMATION RECEIVED THESE G IFTS HAVE BEEN FOUND TO BE UNACCOUNTED MONEY OF THE BENEFICIARIES THEMSELVES. I HAVE THEREFORE, REASONS TO BELIEVE THAT INCOME TO THE TUNE OF RS.1,00,000/- HAS ESCAPED ASSESSMENT IN THE CASE OF SHRI MANIK CHAND GARG S/O. SHRI LAXMI NARAIN GARG, B-12, NATRA JPURAM, KAMLA NAGAR, AGRA FOR AY 2000-01 TO ISSUE NOTICE U/ S. 148. 3. IN REASSESSMENT PROCEEDINGS, THE AO SOUGHT EXPL ANATION WITH REGARD TO TWO GIFTS AND ULTIMATELY FOUND THAT THESE ARE IN-GENUINE GIFTS BEING MADE BY UNIDENTIFIED PERSONS WITHOUT THEIR CR EDITWORTHINESS HAVING BEEN PROVED. THE LD. CIT(A) HAS ALSO CONFIR MED THE IMPUGNED ADDITIONS. NOW THE ASSESSEE IS AGGRIEVED AND HAS RA ISED THE FOLLOWING GROUNDS :- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FA CTS IN SUSTAINING THE ADDITION OF RS.1,00,000/- REPRESENTI NG GIFT RECEIVED FROM SMT. NEELAM KUMARI WITHOUT PROPERLY APPRECIATING THAT THE ASSESSEE HAS PROVED THE IDENT ITY, FINANCIAL CAPACITY OF THE DONOR AND GENUINENESS OF THE TRANSA CTION WHICH IS THROUGH BANKING CHANNELS. THE DONOR WHO IS ASSES SED TO TAX HAS DULY CONFIRMED THE FACT OF GIFT. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN SUSTAINING ANOTHER ADDITION OF RS.2,00,000/- RECEIV ED FROM SHRI RATAN SINGH AS GIFT WHO IS ASSESSED TO INCOME TAX A ND HAS GIVEN GIFT THROUGH BANKING CHANNELS. SINCE THE DON OR HAS EXPIRED, HIS SON WHO WAS SUMMONED U/S 131 AND WHOSE STATEMENT WAS RECORDED BY THE LD. A.O. HAS DULY CON FIRMED THE SAID GIFT, CAPACITY OF THE. DONOR, REASON FOR GIVIN G THE GIFT AND THAT EVEN AFTER THOROUGH EXAMINATION THE LD. A.O. C OULD NOT FIND ANY THING ADVERSE. 3. THAT THE LD. AUTHORITIES BELOW HAVE ERRED IN LA W AND ON FACTS IN DISBELIEVING THE GIFTS WHICH ARE SUPPORTED BY DOCUMENTARY EVIDENCE AND BY THE STATEMENT RECORDED BY THE LD. A.O. ITA NO.192/AGR/2007 A.Y. 2000-01 . 5 4. THAT THE LD. AUTHORITIES BELOW HAVE BEEN HIGHLY UNJUST AND ARBITRARY IN DISBELIEVING THE EVIDENCE OF GIFTS WITHOUT BRINGING ON RECORD ANY CONTRARY EVIDENCE IN SUPPORT OF HIS PRESUMPTIONS. 5. THAT THE APPELLANT CRAVES TO LEAVE ADD, ALTER, AMEND OR WITHDRAW ANY GROUND OF APPEAL. 4. IN ADDITION TO THE ABOVE GROUNDS, THE ASSESSEE HAS RAISED ADDITIONAL GROUNDS WHICH ARE THREE IN NUMBER AND RE AD AS UNDER :- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FA CTS IN DISMISSING GROUND NO.1 AND 2 OF ASSESSEE'S APPEAL W ITHOUT PROPERLY APPRECIATING THAT THE LD. AO HAS ERRONEOUS LY AND UNLAWFULLY ASSUMED JURISDICTION U/S. 148 ON THE BAS IS OF GENERAL AND STERIO TYPED REASONS WITHOUT ANY VERIFICATION, WITHOUT APPLICATION OF MIND AND WITHOUT FORMING HIS OWN BEL IEF. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS SUSTAINING ADDITION OF RS.3,00,000 WITHOUT PROPERLY APPRECIATING THAT THE REASONS FOR ISSUE OF NOTICE U /S.148 ALLEGE ESCAPEMENT OF INCOME OF RS.1,00,000/- AND NOT OF RS .3,00,000/-. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN NOT PROPERLY APPRECIATING THAT THE PROVISIONS OF SECTIO N 68 ARE NOT APPLICABLE AS THE AMOUNT IN QUESTION HAS NOT BEEN F OUND RECORDED IN ASSESSEES BOOKS OF ACCOUNTS AS HE IS N OT MAINTAINING THE SAME. 5. THE ABOVE GROUNDS ARE SIMPLY LEGAL GROUNDS. THE LD. D.R. DID NOT OBJECT TO THEIR ADMISSION. THE GROUNDS ARE PUR ELY LEGAL GROUNDS FOR WHICH NO FURTHER INVESTIGATION OF FACTS IS REQU IRED. THEREFORE IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT RENDE RED IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT (1998) 229 ITR 383 (SC), THESE ARE ADMITTED AS GROUND NOS.6, 7 AND 8. 6. ON MERITS, THE TWO GIFTS - ONE OF RS.1,00,000/- REPRESENTING THE GIFT RECEIVED FROM SMT. NEELAM KUMAR AND SECOND OF RS.2,00,000/- RECEIVED FROM SHRI RATAN SINGH ARE THE SUBJECT MATT ER OF CHALLENGE. ITA NO.192/AGR/2007 A.Y. 2000-01 . 6 7. IN SO FAR AS GIFT OF RS.1 LAKH RECEIVED FROM SM T. NEELAM KUMARI IS CONCERNED, THE RELEVANT FACTS ARE THAT THE ASSES SEE HAS DECLARED THIS GIFT RECEIVED THROUGH CHEQUE NO.864439 DATED 25.08. 1999. A COPY OF GIFT DEED SIGNED BY SMT. NEELAM KUMARI WAS FILED BE FORE THE AO ON 16.11.2005. IN THE GIFT DEED AS WELL AS IN THE INF ORMATION DATED 25.08.1999, A GIFT OF RS.L LAKH MADE ON 25.08.99 TO SHRI MANAK CHAND GARG S/O. SHRI LAXMI NARAIN GARG, B-12, NATRAJPURAM , KAMLA NAGAR, AGRA WERE ALSO ENCLOSED AND IN THE BALANCE S HEET AS ON 31.03.1998 A CASH/BANK BALANCE OF RS.18,485/- WAS S HOWN. ALONGWITH THIS REPLY, THE ASSESSEE ALSO FILED COPIE S OF TWO INFORMATIONS DATED 12.09.1999 AND 26.09.1999 FROM W HICH SHRI RATAN SINGH HAS INFORMED TWO GIFTS AMOUNTING TO RS.L,00,0 00/- EACH HAVING BEEN MADE BY HIM THROUGH CHEQUE NOS.597902 AND 5979 04 RESPECTIVELY TO SHRI MANAK CHAND GARG. SMT. NEELAM KUMARI IS THE WIFE OF RATAN SINGH'S FRIEND. ON 20.11.2005 AND ON 08.12.2005, THE ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE PRODUC ED BOOKS OF ACCOUNTS AND BANK PASSBOOKS OF THE ASSESSEE WHICH W ERE TEST CHECKED. WRITTEN REPLY DATED 25.11.2005 ENCLOSING THEREWITH A COPY OF BANK ACCOUNT NO.KHSB00001558 IN CANARA BANK, KAMLA NAGAR STANDING IN THE JOINT NAMES OF SHRI MANAK CHAND GARG, RITU G ARG AND VANDANA GARG, B-12, NATRAJ PURAM, KAMLA NAGAR, AGRA . THE BANK ACCOUNT REFLECTED THE AMOUNT OF GIFT OF RS.1,00,000 /- EACH DEPOSITED ON 28.08.1999, 17.9.1999 AND 4.10.1999. IN THE WRI TTEN REPLY, THE ASSESSEE HAS MENTIONED THAT HE HAD ALSO RECEIVED A GIFT OF RS.2,00,000/- FROM SHRI RATAN SINGH, PROPRIETOR OF RAMA BRICK FIELD. TWO GIFT DEEDS WERE ALSO ENCLOSED IN RESPECT OF THE SE GIFTS, BUT COPY OF ACCOUNT OF SHRI RATAN SINGH WAS NOT FILED. SINCE TH E ASSESSEE DID NOT PRODUCE ANY EVIDENCE REGARDING THE CREDITWORTHINESS OF THE DONORS INCLUDING SMT. NEELAM KUMARI, A SUMMONS U/S. 131 OF THE ACT WAS ISSUED ON 17.11.2005 TO HER REQUIRING HER TO BE PRE SENT PERSONALLY BEFORE THE AO ON 24.11.2005. IN COMPLIANCE TO THE SUMMONS, SHRI D.K. AGARWAL, C.A. ATTENDED AND FILED AN APPLICATIO N FOR FIXING ANOTHER DATE FOR COMPLIANCE AND ALSO INFORMED THAT SMT. NEELAM KUMARI, WHO WAS ONE OF THE TRUSTEES OF M/S. NARMADA BENEFIT TRUST, HAD EXPIRED ON 20.12.2002. CONSEQUENTLY, THE NEXT D ATE OF COMPLIANCE WAS FIXED AS 06.12.2005. BUT ON THAT DATE NONE APPE ARED NOR ANY WRITTEN REPLY IN COMPLIANCE OF THE SUMMONS WAS RECE IVED. CONSEQUENTLY, THE AO DID NOT ACCEPT THIS GIFT HAVIN G BEEN MADE BY PERSONS WHOSE IDENTITY AS WELL AS CREDITWORTHINESS WERE NOT ESTABLISHED ON RECORD. BEFORE THE LD. CIT(A), THE A SSESSEE FOUGHT ITA NO.192/AGR/2007 A.Y. 2000-01 . 7 VEHEMENTLY AND THE LD. CIT(A) SOUGHT REMAND REPORT FROM THE A.O. VIDE HIS ORDER SHEET ENTRY DATED 18.05.2006, AND AL SO DIRECTED THE A.O. TO ALLOW LEGAL HEIR OF SMT. NEELAM KUMARI TO S TATE IN FAVOUR OF THE GIFTS BY ALLOWING FRESH OPPORTUNITY. AFTER COM PLIANCE OF THE DIRECTION OF THE LD. CIT(A), THE A.O. SUBMITTED THE FOLLOWING REPORT. : SMT. NEELAM KUMARI DONOR OF GIFT RS.1 LAC : IN WRITTEN REPLY DATED 29.5.2006, THE ASSESSEE AGAI N EXPRESSED HIS INABILITY TO PRODUCE THE LEGAL HEIR O F SMT. NEELAM KUMARI AND REQUESTED TO ENFORCE THE PRESENCE OF SHR I D.K. AGARWAL, CA, 46-A MAHADEV KUNJ, PRATAP NAGAR, JAIPU R HOUSE, AGRA AS LEGAL HEIR OF SMT. NEELAM KUMARI. A SUMMON U/S. 131 OF THE I.T. ACT, 1961 WAS ISSUED ON THE SA ME DAY TO SHRI D.K. AGARWAL, CA ON THE GIVEN ADDRESS REQUIRING HIM TO ATTEND MY OFFICE PERSONALLY ON 5.6.2006 AND TO PRODUCE COM PLETE BOOKS OF ACCOUNT IN CASE OF SMT. NEELAM KUMARI PROP . M/S. BRIJ MOHAN LAL & SONS, 51-MADHAV KUNJ PRATAP NAGAR, AGRA, MANAGING TRUSTEE OF M/S. NARMADA BENEFIT TRUST 31/6 7, LOHAR GALI, AGRA FOR THE A.Y. 2000-01, BANK STATEMENT FOR THE PERIOD 1.4.98 TO 31.3.2001 AND EXPLANATION REGARDING SOURC ES OF FUNDS THROUGH WHICH AMOUNT OF RS.1 LAC WAS GIFTED BY SMT. NEELAM KUMARI TO SHRI MANAK CHAND GARG WITH AMOUNT AND DAT E OF MAKING GIFT. ANY HOW, ON 5.6.2006, SHRI D.K. AGARWA L, CA COULD NOT APPEAR BEFORE ME THEREFORE, ON VERBAL REQ UEST OF THE ASSESSEE ANOTHER SUMMON U/S.131 DATED 7.6.2006 WAS SENT BY SPEED POST TO SHRI D.K. AGARWAL, CA REQUIRING HIM T O PRODUCE PERSONALLY ON 12.6.2006 THE SAME DOCUMENTS WHICH WE RE REQUIRED BY THE SUMMON DATED 29.5.2006. SHRI D.K. AGARWAL, CA ATTENDED ON 12.6.2006 IN RESPONSE TO SUMMON U/S. 131 DATED 7.6.2006 AND HAS FILED A BUNCH OF 95 COPIES OF PAPERS WHICH WERE SUBMITTED B Y HIM BEFORE THE ACIT-2(L), AGRA ON 31.3.1999. STATEMENT ON OATH OF SHRI D.K. AGARWAL, CA HAS BEEN RECORDED BY ME WHICH IS SUBMITTED FOR KIND PERUSAL AS PLACED ON RECORD. IN THE BUNCH OF 95 PAPERS, SHRI D.K. AGARWAL HAS ENCLOSED AT PAGE NO.5, A COPY OF BANK ACCOUNT OF M/ S. BRIJ MOHAN LAL & SONS AT ORIENTAL BANK OF COMMERCE, AGRA W.E.F. 25.8.1999 TO 8.9.1999. IN THE BANK STATEMENT, THER E ARE CERTAIN ITA NO.192/AGR/2007 A.Y. 2000-01 . 8 CASH DEPOSITS WHICH HAVE BEEN CONFRONTED WITH SHRI D.K. AGARWAL, CA IN QN. 2. SHRI D.K. AGARWAL, CA HAS REP LIED IN HIS STATEMENT THAT IT WAS THE CAPITAL OF THE TRUST AND IS ON RECORD. IN THE SUMMON ISSUED ON 7.6.2006, SHRI D.K. AGARWAL, C A WAS REQUIRED TO PRODUCE THE COMPLETE BOOKS OF ACCOUNTS OF SMT. NEELAM KUMARI PROP. M/S. BRIJ MOHAN LAL & SONS, MAN AGING TRUSTEE OF M/S. NARMADA BENEFIT TRUST 31/67, LOHAR GALI, AGRA, BANK STATEMENTS OF SMT. NEELAM KUMARI FOR THE PERIO D FROM 1.4.1998 TO 31.3.2001 AND TO EXPLAIN THE SOURCES OF FUNDS FROM WHICH SMT. NEELAM KUMARI GIFTED THE AMOUNT OF RS.1, 00,000/- TO SHRI MANAK CHAND GARG. SHRI D.K. AGARWAL, CA HA S STATED IN HIS STATEMENT THAT HE HAS GIVEN A BUNCH OF 95 PA PERS AND EVERYTHING IS WRITTEN THEREIN. NOTHING MORE IS WIT H HIM REGARDING BANK STATEMENT FOR THE REMAINING PERIOD. SHRI AGARWAL, CA HAS FURTHER STATED THAT WHATEVER WAS AV AILABLE WITH HIM HE HAS FILED. FROM THE PERUSAL OF THE ENT RIES OF CASH DEPOSITS IN THE BANK STATEMENT AND THE REPLY OF SHR I D.K AGRWAL I AM OF THE VIEW THAT IT IS THE UNACCOUNTED MONEY I NTRODUCED BY THOSE PERSONS WHO HAVE BEEN BENEFITED BY THE TRUST BY RECEIVING GIFTS. SHRI MANAK CHAND GARG IS ONE OF THEM WHO HA VE INTRODUCED HIS OWN UNACCOUNTED MONEY IN THE GARB OF GIFT THROUGH ARTIFICIAL DONOR SMT. NEELAM KUMARI PROP. M /S. BRIJ MOHAN LAL & SONS MANAGING TRUSTEE OF M/S. NARMADA B ENEFIT TRUST. 8. AGAINST THIS, IN REJOINDER, IT WAS STATED ON BE HALF OF THE ASSESSEE THAT SUFFICIENT DOCUMENTARY EVIDENCES ESTABLISHING THE CREDITWORTHINESS AND GENUINENESS OF TRANSACTION HAD BEEN FILED BY THE AUTHORIZED REPRESENTATIVE 8HRI D.K. AGARWAL. THE R ELEVANT REPLY IS AS UNDER: GIFT FROM SMT. NEELAM KUMARI: THE DONOR SMT. NEELAM KUMARI HAS ALREADY EXPIRED ON 22.12.02. HER LEGAL HEIRS SHRI D.K AGARWAL, CA IN R ESPONSE TO SUMMON U/S. 131 HAD APPEARED BEFORE LD. AO AND CONF IRMED THAT DONOR SMT. NEELAM KUMARI HAD GIVEN A GIFT OF R S.1 LAC TO THE ASSESSEE. BESIDES HIS STATEMENT SHRI D.K AGARW AL ALSO FILED A COPY OF A/C. OF M/S. BRIJ MOHAN LAL & SONS OF WHI CH SMT. NEELAM KUMARI WAS A PROP. HE ALSO STATED THAT SMT. NEELAM KUMARI, PROP. OF M/S. BRIJ MOHAN LAL & SONS WAS ALS O A ITA NO.192/AGR/2007 A.Y. 2000-01 . 9 MANAGING TRUSTEE OF M/S. NARMADA BENEFIT TRUST, THE AO PUT CERTAIN OTHER QUESTIONS TO SHRI D.K. AGARWAL IN RES PONSE TO WHICH SHRI D.K. AGARWAL FILED BUNCH OF 95 PAPERS IN CLUDING BANK A/C. BEFORE THE LD. A.O. THE LD. A.O. IN HIS REMAND REPORT HAS PARTLY DISCUS SED ABOUT THE BUNCH OF 95 PAPERS WHICH SHOWS THAT THE A O WAS SATISFIED ABOUT THIS GIFT OF RS.1 LAC ALSO. THE ASSESSEE HAS THUS PROVED BOTH THE GIFTS WHICH H AVE BEEN RECEIVED BY HIM THROUGH A/C. PAYEE CHEQUES, LE GAL HEIR OF BOTH THE DONORS HAS DULY CONFIRMED ABOUT THE FACTS OF GIFT. 9. AFTER CONSIDERING THESE EVIDENCES, FINALLY, THE LD. CIT(A) HAS COME TO THE CONCLUSION THAT THE GIFT WAS ARRANGED B Y THE ASSESSEE TO INTRODUCE HIS UNACCOUNTED MONEY IN REGULAR BOOKS OF ACCOUNTS AND, THEREFORE, HE CONFIRMED THIS ADDITION. NOW THE ASS ESSEE IS FURTHER AGGRIEVED. 10. IT WAS VEHEMENTLY ARGUED BY THE LD. A.R. 8HRI J .L. VERMA THAT WITH REGARD TO 8MT. NEELAM KUMARI, THE ENTIRE EVIDE NCE WERE PRODUCED TO CONFIRM THIS GIFT AND COPIES OF THOSE E VIDENCES ARE AGAIN ENCLOSED AT PAGES 30, 34, 35 & 36 OF HIS PAPER BOOK . ON THE OTHER HAND, THE LD. D.R. HAS VEHEMENTLY ARGUED THAT NEITH ER THE IDENTITY NOR THE CREDITWORTHINESS OF THE DONOR HAS BEEN ESTABLIS HED, SO THIS GIFT IS BOGUS ONE. WE HAVE EXAMINED THE RELEVANT EVIDENCES IN THE LIGHT OF THE ORAL SUBMISSIONS OF THE PARTIES. AT PAGE 30 OF THE PAPER BOOKS OF THE ASSESSEE, THE STATEMENT ON OATH OF SHRI D.K. AG ARWAL, C.A., HAS BEEN ENCLOSED. IN HIS STATEMENT, SHRI AGARWAL HAS RELIED UPON A BUNCH OF 95 PAGES, WHICH IS STATED TO BE A WRITTEN REPLY AND WITH REFERENCE TO THE SAME IT WAS CATEGORICALLY STATED T HAT HE HAD NOTHING TO SAY ANYTHING MORE BEYOND THAT. REGARDING THE BAN K STATEMENT, HE SAID THAT THE AO WAS COMPETENT ENOUGH TO CALL THE R EQUIRED RECORD FROM THE BANK DIRECTLY. AT PAGE 34, COPY OF LETTER DATED 25.08.1999, AN ACKNOWLEDGEMENT OF GIFT BY SMT. NEELAM KUMAR IS ENCLOSED. AT PAGE 35, COPY OF GIFT DEED IS ENCLOSED. AT PAGE 36, STATEMENT OF BANK ACCOUNT OF M/S. BRIJ MOHAN LAL & SONS IS ENCLOSED. FROM NONE OF THE ABOVE EVIDENCES, IT IS ESTABLISHED THAT SMT. NEELAM KUMARI HAD DIED AND IF DIED, SHE DIED ON A PARTICULAR DATE. DEFINI TELY, HER IDENTITY REMAINED IN DOUBT. EVEN IN HIS STATEMENT SHRI D.K. AGARWAL HAS MENTIONED NOTHING ABOUT THE DEATH OF SMT. NEELAM KU MARI, BUT ITA NO.192/AGR/2007 A.Y. 2000-01 . 10 OBVIOUSLY HIS STATEMENT WAS RECORDED AS A LEGAL HEI R OF SMT. NEELAM KUMARI. THE CREDITWORTHINESS OF SMT. NEELAM KUMARI IS ALSO NOT FOUND ESTABLISHED ON RECORD. IN THE ABSENCE OF PRO OF OF IDENTITY OF DONOR AND PROOF OF CREDITWORTHINESS OF THE DONOR, T HE GIFT CANNOT BE TREATED AS GENUINE. THEREFORE, WE CONFIRM THE FINDI NG OF LD. CIT(A) IN THIS REGARD AND SUSTAIN THE IMPUGNED ADDITION. WHA T IS THIS BUNCH OF 95 PAGES IS STILL A MYSTERY AND NOTHING WAS STATED EVEN BEFORE US AS TO WHAT EVIDENCE(S) WAS KEPT THEREIN. THE ASSESSEE IS BOUND TO PROVE THE IDENTITY OF THE DONOR. EVEN THE DEATH OF THE DONOR WAS NOT PROVED ON RECORD. THE QUESTION OF LEGAL HEIR COMES ONLY AFTER ACCEPTED PROOF OF THE DEATH OF THE DONOR. THERE IS NO DIRECT EVIDENC E AVAILABLE ON RECORD IN THIS REGARD. THE PROOF OF HER CREDITWORT HINESS IS LACKING IN TOTO. NO PROOF OF HER CREDITWORTHINESS IS AVAILABLE ON RECORD. SUCH A GIFT CANNOT BE HELD TO BE GENUINE. 11. WITH REGARD TO THE GIFT OF SRI RATAN SINGH OF RS.2,00,000/-, REMAND REPORT WAS SOUGHT BY THE LD. CIT(A) FROM THE LD. AO AND THE SAME WAS SUBMITTED WHICH, VERBATIM, READS AS UNDER : SHRI RATAN SINGH, DONOR FOR THE GIFT OF RS.2 LAC- ON 29.05.2006 THE ASSESSEE SHRI CHAND GARG ATTENDED WITH HIS COUNSEL AND PRODUCED ONE SHRI VIJAY SINGH RESIDENT OF VILLAGE PANWAI, TEHSIL KIRAWALI, AGRA AS LEGAL HEIR OF THE DONOR SHRI RATAN SINGH. IN EVIDENCE OF HIS IDENTIT Y SHRI VIJAY SINGH HAS FILED COPY OF KHATONI AND A CERTIFICATE D ATED 15.5.2006 ISSUED BY CHAUDHRI VIJAY SINGH THE PRADHA N OF GRAM PANCHAYAT, PANWARI VIKAS KHAND AHHNERA, AGRA. THE PRADHAN HAS CERTIFIED THAT SHRI RATAN SINGH S/O. SH RI K MWASI SINGH HAS BEEN EXPIRED ON 16.6.2001. HE HAS THREE SONS BUT HE USED TO RESIDE WITH HIS SOME SHRI VIJAY SINGH. SHR I RATAN SINGH WAS RUNNING A BRICK KILM AT DEORI ROAD, DEORI UNDER THE NAME AND STYLE OF M/S. RAMA BRICK FIELD. LATER ON HE DI D DALALI OF BRICKS. AN STATEMENT ON OATH OF SHRI VIAY SINGH S/O SHRI RA TTAN SINGH AGED ABOUT 48 YEARS R/O. VILLAGE PANWARI TEHS IL KIRAWALI, AGRA HAS BEEN RECORDED BY ME ON 29.5.2006 WHICH IS SELF EXPLANATORY AND IS SUBMITTED WITH CASE RECORD OF SHRI MANAK CHAND GARG FOR YOUR KIND PERUSAL. IN THIS ST ATEMENT ON ITA NO.192/AGR/2007 A.Y. 2000-01 . 11 OATH, IN REPLIES TO QUESTION NO.4 TO QUESTION NO.7, SHRI VIJAY SINGH HAS CATEGORICALLY STATED AS UNDER :- - BEFORE HIS DEATH MY FATHER TOLD ME THAT HE HAD GI VEN GIFT OF RS.2 LAC TO SHRI MANAK CHAND GARG (ANS. TO QUEN. 4) - SHRI MANAK CHAND GARG IS OUR FAMILY FRIEND. HE GENERALLY USED TO COME TO MY FATHER. IN 1987 MY OT HER MET WITH AN ACCIDENT AND AT THAT TIME SHRI MANAK CH AND GARG HELPED MY FATHER PHYSICALLY AND FINANCIALLY. IMPRESSED WITH THE SAME MY FATHER DECIDED TO DO SOMETHING FOR SHRI MANAK CHAND GARG AND THEREFORE, HE GIFTED RS.2 LAC TO SHRI MANAK CHAND GARG. IT IS TO LD TO ME BY MY FATHER SHRI VIJAY SINGH HAS STATED (ANS. T O QN.5) - MY FATHER GIFTED TWO CHEQUES OF RS.1 LAC EACH, TO SHRI MANAK CHAND GARG IN THE YEAR 1999-2000 IT WAS TOLD BY MY FATHER (ANS. TO QN.6). - MY FATHER WAS HAVING TWO SAVING ACCOUNTS ONE AT P NB, ROHTA AND ANOTHER AT JAMUNA GRAMIN BANK-PANWARI BUT IT CANNOT SAY THAT OUT OF WHICH ACCOUNT, MY FATHER ISSUED THE CHEQUES FOR GIFT OF RS.1 LAC EACH TO SHRI MANAK CHAND GARG AND WHAT WAS THE DATE OF THESE CHEQUES ( ANS TO QN.7) - SHRI VIJAY SINGH S/O SHRI RATTAN SINGH HAS EXPRES SED HIS INABILITY TO PRODUCE THE COPIES OF BANK STATEMENTS AND BOOKS OF ACCOUNT OF SHRI RATTAN SINGH IN ORDER TO SUBSTANTIATE THE SOURCE OF FUNDS OUT OF WHICH THE G IFT OF RS.2 LAC WAS GIVEN TO SHRI MANAK CHAND GARG BY SHRI RATTAN SINGH. HOWEVER, SHRI VIJAY SINGH HAS STATED THAT HIS FATHER WAS A REGULAR TAX PAYER AND PAN AMMPS 5126M WAS ALLOTTED TO HIM BY THE DEPARTMENT. SHRI VIJAY SINGH HAS FILED COPY OF CAPITAL ACCOUNT, COMPUTATIO N OF INCOME AND ACKNOWLEDGEMENT OF THE RETURN FILED BY S HRI RATTAN SINGH FOR THE AY 2000-01 ON TOTAL INCOME OF RS.91250 + AGRICULTURE INCOME RS.58,500/- IN WARD-L (3) AGRA IN AUGUST, 2000 VIDE RECEIPT NO.22050 (ANS. TO QN.8). ITA NO.192/AGR/2007 A.Y. 2000-01 . 12 IT IS SUBMITTED THAT COPY OF CAPITAL ACCOUNT OF SHR I RATTAN SINGH FOR THE A Y 2000-01 DEPICTS DEBIT OF TOTAL GI FT OF RS.5,10,000/-. IN ANSWER TO QUESTION NO.9 SHRI VIJ AY SINGH HAS STATED THAT OUT OF THIS AMOUNT OF RS.5,10,000/- MY FATHER HAD GIVEN GIFT OF RS.2 LACS TO SHRI MANAK CHAND GARG AN D RS.1 LAC TEN THOUSAND WERE GIFTED TO ME. FOR THE REST OF TH E AMOUNT, I HAVE NO KNOWLEDGE. IT IS SUBMITTED FOR KIND PERUSAL THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE SHRI MANAK CHAM D GARG NEVER INFORMED ME THAT DONOR OF GIFT OF RS.2 LAC SH RI RATTAN SINGH HAS BEEN EXPIRED, NOR HE EXPRESSED HIS INTENT ION TO PRODUCE BEFORE ME THE LEGAL HEIR OF SHRI RATTAN SIN GH TO JUSTIFY THE GENUINENESS OF GIFT OF RS.2 LACS MADE TO HIM BY SHRI RATTAN SINGH. SINCE SHRI VIJAY SINGH, APPEARED AS LEGAL H EIR OF SHRI RATTAN SINGH HAS FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE IN THE SHAPE OF BANK STATEMENT AND BOOKS OF ACCOUNT S OF SHRI RATTAN SINGH FOR VERIFICATION OF GENUINENESS OF THE GIFT AND TO EXPLAIN THE SOURCE OF FUNDS OUT OF WHICH THE GIFT W AS GIVEN THEREFORE, AFTER EXAMINING SHRI VIJAY SINGH, IT APP EARS TO ME THAT A SELF COOKED STORY HAS BEEN PUT BY THE ASSESS EE IN THE MOUTH OF SHRI VIJAY SINGH. THE DONOR SHRI RATTAN S INGH WAS HAVING NO RELATIONSHIP WITH THE DONEE SHRI MANAK CH AND GARG AND THERE WAS NO LOVE AND AFFECTION IN BETWEEN THEM OUT OF WHICH THE SAID GIFT WAS MADE AND THERE IS NO SPECIF IC OCCASION ON WHICH THE GIFT OF RS.2 LAC WAS MADE BY SHRI RATT AN SINGH TO SHRI MANAK CHAND GARG. IN FACT, SHRI MANAK CHAND G ARG HAS INTRODUCED HIS OWN UNACCOUNTED MONEY IN THE GARB OF GIFT THROUGH AN ARTIFICIAL DONOR. IN VIEW OF THE ABOVE FACT IT IS HUMBLY SUBMITTED TH AT THE ASSESSEE DOES NOT DESERVE FOR ANY RELIEF FROM THE A DDITION OF RS.2 LAC MADE U/S. 68 AS UNDISCLOSED INCOME OF THE ASSESSEE IN THE ASSESSMENT ORDER PASSED FOR THE AY 2000-01. 12. AGAIN THE REPLY IN REJOINDER TO THE REMAND REP ORT TENDERED BY THE ASSESSEE IS BEING EXTRACTED BELOW:- GIFT FROM SHRI RATAN SINGH ITA NO.192/AGR/2007 A.Y. 2000-01 . 13 SINCE THE DONOR SHRI RATAN SINGH HAS ALREADY EXPIRE D ON 16.6.2001 HIS SON SHRI VIJAY SINGH APPEARED BEFORE THE LD. A. 0., FILED THE EVIDENCE OF DEATH OF HIS FATHER SHRI RATAN SINGH AND PROVED HIS IDENTITY. IN HIS STATEMENT SHRI VIJAY SINGH CONFIRMED THAT HI S FATHER SHRI RATAN SINGH HAD GIVEN GIFT OF RS.2 LACS TO THE ASSESSEE, ON QUERIES HE FURTHER DEPOSED THAT THE AS SESSEE IS A FAMILY FRIEND AND GENERALLY USED TO VISIT HIS FATHE R. ON FURTHER QUESTION THE SAID SHRI VIJAY SINGH CLARIFIED THAT I N 1987 HIS MOTHER ADMITTED IN AN ACCIDENT AND THE ASSESSEE SHR I MANAK CHAND GARG HELP THE FAMILY PHYSICALLY AND FINANCIAL LY. HIS FATHER BEING IMPRESSED BY THE HELP RENT DEED BY THE ASSESSEE HAD DECIDED TO DO SOMETHING FOR THE ASSESSEE AT ANY TIME. HIS FATHER HAD GIFTED RS.2 LACS TO THE ASSESSEE BY WAY OF TWO CHEQUES OF RS.1 LACS EACH IN THE YEAR 99-2000 OUT O F HIS BANK ACCOUNT. ON FURTHER QUESTION THE SAID SHRI VIJAY SING STATED THAT THE FACT OF GIFT RS.2 LACS HAD BEEN MENTIONED TO HI M BY HIS FATHER, SHRI VIJAY SINGH ALSO CONFIRMED THAT HIS FA THER RATAN SINGH WAS INCOME TAX ASSESSEE AND WAS HAVING HIS PA N AMMPS5126M. THE DONOR SHRI RATAN SINGH USED TO FIL E CAPITAL A/C. AND COMPUTATION OF INCOME WITH THE RET URN. EVIDENCE OF FILING RETURN OF INCOME FOR 2000-01 WAS ALSO FURNISHED. SEVERAL QUESTIONS WERE PUT TO THE SAID SHRI VIJAY S INGH BUT HE FORMALLY CONFIRMED THE ABOVE MENTIONED FACTS . THE AO COULD NOT GET FROM HIS MOUTH ANY CONTRADICTION. TH E LD. AO DULY ADMITTED ALL THE AFORESAID FACTS IN HIS REMAND REPORT SUBMITTED BEFORE YOUR HONOUR. THUS THE FACTS OF TH E FACT OF RS.2 LAC FROM SHRI RATTAN SINGH STAND DULY PROVED. IT IS FURTHER SUBMITTED THAT THE RELATIONSHIP BETWE EN DONOR AND DONEE AND THERE BEING ANY SPECIFIC OCCASI ON AS STATED BY AO IS NOT NECESSARY UNDER LAW. IT IS THEREFORE PRAYED THAT THE ADDITION MADE BY TH E AO MAY KINDLY BE DELETED. ITA NO.192/AGR/2007 A.Y. 2000-01 . 14 13. IT WAS ARGUED BY THE ID. A.R. WITH REFERENCE T O PAGES 12 TO 18 AND 21 OF HIS PAPER BOOK THAT THE GIFT MADE BY SHRI RATAN SINGH TO THE ASSESSEE IS GENUINE. AGAIN, WE ARE NOT CONVINCED RE GARDING THE IDENTITY AND THE CREDITWORTHINESS OF THIS DONOR AS WELL. THE SCRUTINY OF THE REMAND REPORT VIS-A-VIS THE REPLY OF THE ASS ESSEE, IT BECOMES MANIFEST THAT NO DOCUMENTARY EVIDENCE (S) WAS PRODU CED IN SUPPORT OF WHAT WAS STATED BY SHRI VIJAY SINGH. DURING ASSESS MENT PROCEEDINGS, THE ASSESSEE DID NOT EVEN INFORM LD. AO THAT THIS D ONOR HAD ALREADY EXPIRED. A STATEMENT SIMPLICITER MADE ONLY TO SUIT THE REQUIREMENT OF THIS ASSESSEES CASE THROWS A SHROUD OF DISBELIEF A ND ABSENCE OF DOCUMENTARY PROOF TAKES OUT THIS GIFT FROM THE KITT Y OF GENUINENESS. THE EVIDENCES FILED IN THE FORM OF ACKNOWLEDGEMENT OF ROI AGAIN DISPROVE THE CASE OF THE ASSESSEE. THE DONOR HAS D ISCLOSED MEAGER INCOMES IN BOTH THESE YEARS. THUS THE CREDITWORTHIN ESS OF THE DONOR IS ALSO NOT PROVED. FROM THE REMAND REPORT AS WELL AS ASSESSEE'S REPLY, THE CREDITWORTHINESS OF THE DONOR IS NOT AT ALL EST ABLISHED. THEREFORE, WE DO NOT ACCEPT THIS GIFT ALSO 14. NOW COMING TO LEGAL GROUND TAKEN BY THE ASSESS EE AS ADDITIONAL GROUND, GROUND NO.1 OF ADDITIONAL GROUND WHICH HAS BEEN TREATED AS GROUND NO. 6 CHALLENGES THE ASSUMPTION OF JURISDICT ION U/S. 148 OF THE ACT ON THE GROUND THAT THE REASONS RECORDED WITH RE GARD TO ESCAPEMENT OF INCOME ARE NOT SPECIFIC, BUT ARE GENE RAL IN NATURE. AFTER PERUSING THE REASONS RECORDED BY THE AO WHICH HAVE BEEN EXTRACTED IN ABOVE PART OF THIS ORDER, IT BECOMES C LEAR THAT THE REASONS WITH REGARD TO ESCAPEMENT OF INCOME QUA ALLEGED GIF T OF RS.L,00,000/-, GIVEN BY SMT. NEELAM KUMARI THROUGH CHEQUE NO.86443 9 DRAWN ON A PARTICULAR BANK IS DEFINITELY A SPECIFIC AND NOT A GENERAL INFORMATION. THEREFORE, THIS GROUND IS NOT MAINTAINABLE AND IS, THEREFORE, DISMISSED. 15. WITH REGARD TO GROUND NO.2, IT IS FOUND THAT W HEN ONE OF THE REASONS RECORDED FOR REOPENING OF ASSESSMENT IS FOU ND TO BE CORRECT AND EXISTENT, THEREAFTER, IT IS TRITE THAT THE ASSE SSMENT ORDER IS OPEN FOR ANY OTHER ADDITIONS. DURING THE RE-ASSESSMENT PROCE EDINGS, THE GIFTS OF RS.2,00,000/- WAS FOUND TO HAVE BEEN ALLEGEDLY R ECEIVED BY THE ASSESSEE, WHICH WAS NOT EVEN DISCLOSED IN THE ORIGI NAL RETURN FILED BY THE ASSESSEE. THEREFORE, THIS GROUND IS NOT MATERIA L AND DOES NOT RAISE ANY GOOD LEGAL GROUND AND THE SAME IS LIABLE TO BE DISMISSED. WE, ITA NO.192/AGR/2007 A.Y. 2000-01 . 15 THEREFORE, DISMISS GROUND NO.2 OF ADDITIONAL GROUND , WHICH HAS BEEN ADMITTED AS GROUND NO.7 OF APPEAL. 16. IN SO FAR AS THE APPLICATION OF PROVISIONS OF SECTION 68 IS CONCERNED, THE SAME AGAIN IS OF NO USE TO THE ASSES SEE BECAUSE IT IS VERY MUCH CLEAR FROM THE ASSESSMENT ORDER ITSELF TH AT THE ASSESSEE HAD MAINTAINED BOOKS OF ACCOUNTS. SO THERE IS NO QUEST ION OF NOT APPLYING THE PROVISIONS OF SECTION 68 OF THE ACT IN THIS CAS E. THIS ISSUE IS NOT AT ALL COVERED BY THE DECISIONS RELIED BY THE LD. AR A ND ARE DISTINGUISHABLE FOR THE REASON THAT IN THOSE CASES, THE ASSESSEE DID NOT MAINTAIN BOOKS OF ACCOUNTS. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.01.09. 3. THE ASSESSEE FILED MISCELLANEOUS APPLICATION (M. A.) AGAINST THE SAID ORDER BEFORE THE I.T.A.T. THE I.T.A.T. VIDE M.A. 20/AGRA /2010 ORDER DATED 17.09.2010 ALLOWED THE M.A. OF THE ASSESSEE AS UNDER:- THIS IS A MISCELLANEOUS APPLICATION FILED BY THE A SSESSEE ARISING OUT OF ORDER OF THE TRIBUNAL IN ITA NO.192/ AGR/2007 FOR ASSESSMENT YEAR 2000-01. 2. THE APPEAL OF THE ASSESSEE WAS DISPOSED OFF BY T HE TRIBUNAL VIDE ORDER DATED 30.1.2009. IN APPEAL OF THE ASSES SEE THE ISSUE INVOLVED WAS AGAINST DELETION OF ADDITION OF ` 3,00,000/- MADE ON ACCOUNT OF TWO GIFTS OF ` 2 LACS AND ` 1 LAC. THE TRIBUNAL HAS RECORDED A FINDING THAT THOUGH STATEMENTS OF DONORS WERE RECORDED, HOWEVER, NO SUPPORTING EVIDENCE WAS FILED. THESE O BSERVATIONS ARE RECORDED BY THE TRIBUNAL IN PARA 13 OF ITS ORDER. 3. THE LD. COUNSEL OF THE ASSESSEE VEHEMENTLY ARGUE D THAT THE FINDING RECORD BY THE TRIBUNAL IN PARA 13 ARE CONTR ARY TO THE FACTS OF THE CASE. ATTENTION OF THE BENCH WAS DRAWN ON PAG ES 16 & 17 WHERE COPY OF SUPPORTING EVIDENCE I.E. OWNERSHIP OF AGRIC ULTURAL LAND IS PLACED. THEREFORE, IT WAS SUBMITTED THAT THE TRIBU NAL HAS REJECTED THE APPEAL OF THE ASSESSEE UNDER MISCONCEPTION. THEREF ORE, IT SHOULD BE ITA NO.192/AGR/2007 A.Y. 2000-01 . 16 RECALLED. RELIANCE IS PLACED ON VARIOUS CASE LAWS MENTIONED IN THE WRITTEN SUBMISSION FILED BY THE ASSESSEE. 4. ON THE OTHER HAND, THE D/R STATED THAT MISCELLAN EOUS APPLICATION OF THE ASSESSEE MAY BE DISPOSED OFF ON MERIT. 5. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE ORDER OF TRIBUNAL, WE FIND THAT A MISTAKE HAS BEEN CREPT IN THE ORDER OF THE TRIBUNAL. WHETHER THE ADDITION IS LIABLE TO BE DEL ETED OR NOT IS ANOTHER ASPECT, BUT THE FACT IS THAT THE ASSESSEE H AS FILED SUPPORTING EVIDENCE IN ITS CASE. COPY OF OWNERSHIP OF AGRICUL TURAL LAND IS PLACED ON RECORD AS MENTIONED IN THE ORDER OF THE TRIBUNAL AT PAGES 16 & 17. THEREFORE, IT IS A MISTAKE ON THE PART OF THE TRIBU NAL IN MENTIONING THAT NO DOCUMENTARY EVIDENCE WAS PRODUCED IN SUPPOR T OF OWNERSHIP OF AGRICULTURAL LAND, AS STATED BY SHRI VIJAY SINGH LEGAL HEIR OF DONOR SHRI RATAN SINGH. SINCE SUPPORTING EVIDENCE PRODUC ED, COPY OF WHICH IS PLACED ON RECORD IN THE ORIGINAL FILE, THEREFORE , WE HOLD THAT THE ORDER OF THE TRIBUNAL IS LIABLE TO BE RECALLED. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE RECALL THE ORDER OF THE TRIBU NAL AND DIRECT THE REGISTRY TO FIX THE APPEAL IN DUE COURSE. WE ORDER ACCORDINGLY. 6. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 .09.2010.' 4. THUS THE APPEAL WAS ACCORDINGLY FIXED FOR H EARING. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE ASSESSEE IS A PARTNER IN THE FIRM M/S. MANAK CH AND GARG & CO. THE CASE WAS REOPENED UNDER SECTION 147 OF THE ACT AND ISSUED NO TICE UNDER SECTION 148 ON 30.03.2005. A COPY OF REASON WAS ISSUED TO THE ASS ESSEE ON 10.10.2005. IT WAS NOTICED THAT A GIFT OF RS.1,00,000/- WAS RECEIVED T O THE ASSESSEE FROM SMT. NEELAM KUMARI, PROPRIETOR OF M/S BRIJ MOHAN LAL & SONS, 51 , MADHAV KUNJ, PRATAP NAGAR, AGRA THROUGH CHEQUE NO.864439 DATED 25.08.19 99. ON EXAMINATION OF THE ITA NO.192/AGR/2007 A.Y. 2000-01 . 17 GENUINENESS OF THE GIFT, THE A.O. ASKED THE ASSESSE E TO FURNISH THE SUPPORTING EVIDENCE AND MATERIAL. THE A.O. EXAMINED THE MATER IALS FILED BY THE ASSESSEE. THE A.O. NOTICED THAT THE ASSESSEE HAS PRODUCED NOT HING ABOUT THE CREDITWORTHINESS OF THE DONOR. THE A.O. HAS ALSO NOTICED THAT TWO G IFTS OF RS.1, 00,000/- EACH 12.09.1999 AND 26.09.1999 THROUGH CHEQUE NO.597909 AND 597904 RESPECTIVELY RECEIVED TO THE ASSESSEE. IT WAS EXPLAINED THAT THE DONOR SMT. NEELAM KUMARI IS THE WIFE OF ASSESSEES FRIEND AND ALSO HAVING FAMIL Y RELATIONS WITH THEM AND THEY USUALLY ATTEND THEIR FUNCTIONS. IN ORDER TO EXAMINE THE DONORS, SUMMON UNDER SECTION 131 OF THE ACT WAS ISSUED ON 17.11.2005 TO THE DONOR SMT. NEELAM KUMARI BUT THE DONOR SMT. NEELAM KUMARI DID NOT APPEAR BEF ORE THE A.O. SIMILARLY, SUMMON UNDER SECTION 131 OF THE ACT WAS ALSO ISSUED TO SHRI RATTAN SINGH ON 25.11.2005 BY SPEED POST ON THE ADDRESS GIVEN IN TH E GIFT DEED. BUT THE SUMMON WAS RETURNED UN-SERVED WITH THE POSTAL REMARK PATA GALAT HE WALDEEYAT NAHIN. THE A.O. HAS ALSO NOTICED THAT THE CIT(A) VIDE HIS ORDER DATED 8/9.07.2004 HAS GIVEN FINDING IN THE CASE OF TRUSTEES S/SHRI VISHNU BHAGWAN AGARWAL, RAVAINDRA KUMAR, RADHA BALLABH, D.K. AGAWAL AND SHRI SHEETAL PRASAD JAIN THAT M/S. VISHNU BHAGWAN FAMILY TRUST, M/S RADHA TRUST, M/S R ENU AGARWAL TRUST AND M/S. SHEETAL PRASAD JAIN (P) FAMILY TRUST ETC. ARE BOGUS TRUSTS AND THE INCOME SHOWN IN THE HANDS OF THE TRUSTS ARE ACTUALLY BELON GS TO ITS TRUSTEES. ALL THESE TRUSTS WERE MANAGED AND CONTROLLED BY SHRI D K. AGARWAL, C HARTERED ACCOUNTANT. SMT. NEELAM KUMARI IS ALSO ONE OF THE TRUSTEES OF M/S. N ARMADA BENEFIT TRUST WHO HAS ITA NO.192/AGR/2007 A.Y. 2000-01 . 18 EXPIRED ON 22.12.2002. THE A.O. NOTICED THAT GIFT OF RS.1,00,000/- MADE TO THE ASSESSEE BY SMT. NEELAM KUMARI HAS ALSO BEEN ROUTED THROUGH M/S. NARMADA BENEFIT TRUST WHICH HAS ALSO BEEN ALSO MANAGED AND CONTROLLED BY SHRI D.K. AGARWAL, C.A. IT HAS ALSO BEEN NOTED BY THE A.O. T HAT CERTAIN FACTS AS NOTED BY THE A.O. IN PARAGRAPH NO.4 OF HIS ORDER FROM WHICH IT I S CLEAR THAT THE ASSESSEE HAS INITIALLY MISGUIDED THE DEPARTMENT BY GIVING FALSE NAME AND ADDRESS THE GIFT DEED. THE A.O. HELD THAT THE ASSESSEE INTRODUCED HIS OWN UNACCOUNTED MONEY IN THE GARB OF GIFT THROUGH ARTIFICIAL DONORS. THE A.O. FOUND THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE CREDITWORTHINESS OF BOTH THE CREDITOR S SHRI RATTAN SINGH AND SMT. NEELAM KUMARI. THE CIT(A) CONFIRMED THE ADDITION. IT WAS SUBMITTED BEFORE THE CIT(A) THAT THE DONOR SHRI RATTAN SINGH HAS ALSO EX PIRED ON 16.06.2001. THEREFORE, IT WAS NOT POSSIBLE TO PRODUCE HIM BEFOR E THE A.O. THE CIT(A)PROVIDED FRESH OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE LEGAL HEIR OF THE DONOR FOR EXAMINATION BEFORE THE A.O. THE A.O. SUB MITTED THE REMAND REPORT DATED 15.06.2006 WHICH IS REPRODUCED IN THE ORIGINA L I.T.A.T. ORDER. THE CIT(A) REPRODUCED THE ASSESSEES SUBMISSION AGAINST THE R EMAND REPORT SUBMITTED BY THE ASSESSEE WHICH HAVE ALSO REPRODUCED ABOVE IN THE OR IGINAL ORDER OF THE I.T.A.T. THE CIT(A) CONFIRMED THE ADDITION OBSERVING AS UNDE R :- 3.4 I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMI SSION OF AR AND AOS REPORT. IN MY VIEW APPELLANT DESERVES TO FAIL . CONSIDERING THE FACTS OF THE CASE ALLEGED GIFTS UNDER REFERENCE CAN NOT BE SAID TO BE ITA NO.192/AGR/2007 A.Y. 2000-01 . 19 GENUINE. IN CASE OF GIFT FROM SMT. NEELAM KUMARI, THOUGH IN THE PHOTOCOPY OF GIFT DEED IT WAS MENTIONED THAT GIFT W AS GIVEN BY DONOR OUT OF NATURAL LOVE & AFFECTION, HOWEVER, APPELLANT FAILED TO FURNISH EVIDENCE SHOWING THAT THE DONOR WAS RELATED TO HIM BY WAY OF RELATIONSHIP OR FRIENDSHIP. IN SPITE OF SUFFICIENT OPPORTUNITY, THE ASSESSEE FAILED TO PRODUCE THE L/H OF SMT. NEELAM K UMARI. EVEN THE COMPLETE ADDRESS OF L/H WAS NOT FURNISHED. THE APP ELLANT HAS REQUESTED THE AO TO ISSUE SUMMON TO SHRI D K AGARWA L, CA, 46A, MADHAV KUNJ, PRATAP NAGR, AGRA FOR ASCERTAINING THE SOURCE OF FUND IN THE HANDS OF DONOR. SUMMON WAS ISSUED AND SHRI D K AGARWAL WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNT AND BANK STATEMENT OF THE DONOR FAMILY REGARDING SOURCE OF FUND. THE BANK AC COUNTS PRODUCED BY SHRI D K AGARWAL INDICATE VARIOUS CASH DEPOSITS AND THE SOURCE OF THE SAME WERE NOT EXPLAINED BY HIM. WHEN HE WAS SP ECIFICALLY ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSIT THOUGH IT WAS CLAIMED BY HIM THAT THE AFORESAID CASH WAS DEPOSITED BY HIM OUT OF CAPITAL OF THE TRUST, HOWEVER, NO DOCUMENTARY EVIDENCE AND DETAILS IN THIS REGARD WAS SUBMITTED. IN FACT ON 28.3.05 A SURVEY U/S 133 A WAS CONDUCTED AT THE OFFICE PREMISES OF SHRI D K AGARWAL AND DURING THE COURSE OF SURVEY IT WAS FOUND THAT AS MANY AS 292 TRUSTS ARE BEING OPERATED FROM THE AFORESAID ADDRESS. IT WAS ALSO FOUND DURI NG THE COURSE OF SURVEY THAT THE TRUST DO NOT CONDUCT ANY ACTUAL BUS INESS BUT THEY ARE UTILIZED FOR PROVIDING ACCOMMODATION ENTRIES TO VAR IOUS BENEFICIARIES BY WAY OF GIFT, BUSINESS PROFIT, DONATION ETC. IN FACT OFFICIAL LETTER HEAD AND SEALS OF VARIOUS INCOME-TAX AUTHORITIES WERE AL SO FOUND DURING THE COURSE OF SEARCH WHICH INDICATE THAT GENUINENES S OF DOCUMENTS IN RESPECT OF THE ENTITIES ARE DOUBTFUL. THE APPELLAN TS DONOR SMT. NEELAM KUMARI, PROP. OF M/S BRIJ MOHAN LAL & SONS, WHICH WAS THE MANAGING TRUSTEE OF ONE OF THE SUCH TRUST M/S NARMA DA BENEFIT TRUST, 31, LOHARGALI, AGRA. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, SHRI D K AGARWAL HAS CLAIMED THAT THE FUND OF NARMA DA BENEFIT TRUST WAS UTILIZED FOR AFORESAID GIFT OF RS.1 LAKH. IT I S ALSO SEEN THAT BESIDES GIVING GIFT TO APPELLANT THE AFORESAID TRUST HAS DI STRIBUTED GIFT OF MORE THAN RS.25 LACS TO VARIOUS BENEFICIARIES. THE FACT S OF THE CASE CLEARLY INDICATE THAT NARMADA BENEFIT TRUST WAS CREATED WIT H THE SOLE INTENTION OF DEFRAUDING THE REVENUE BY PROVIDING FI CTITIOUS ENTRIES IN RESPECT OF GIFT ETC. THERE ARE UNEXPLAINED CASH DE POSITS IN THE BANK ACCOUNT OF AFORESAID TRUST, IN SUCH CIRCUMSTANCES G IFT ADVANCED BY SMT. NEELAM KUMARI CANNOT BE HELD AS GENUINE GIFT. ITA NO.192/AGR/2007 A.Y. 2000-01 . 20 3.5 SIMILARLY, IN THE CASE OF RATAN SINGH THOUGH HI S L/H HAS CONFIRMED THE FACTS REGARDING GIFT OF RS.2 LACS, HO WEVER, COPY OF BANK ACCOUNTS WAS NOT PRODUCED. DURING THE CONCERNED YE AR, THE TOTAL INCOME OF RATAN SINGH WAS ONLY RS.1,49,750/-. FROM THE COPY OF HIS CAPITAL ACCOUNT PRODUCED BY L/H IT APPEARS THAT LAT E SHRI RATAN SINGH HAS GIVEN GIFT OF RS.5,10,000/-. APPELLANT FAILED TO PRODUCE BANK STATEMENT OR BOOKS OF ACCOUNT OF LATE SHRI RATAN SI NGH, IN SUCH CIRCUMSTANCES CREDITWORTHINESS OF RATAN SINGH REMAI NED UNPROVED. A PERSON HAVING MEASURE INCOME OF RS.1,49,750/- CANNO T HAVE SUFFICIENT FUND TO GIVE GIFT TO THE TUNE OF RS.5,10,000/-. IT IS DIFFICULT TO APPRECIATE WHY A PERSON OF SUCH LOW FINANCIAL WILL PART WITH THEIR HARD EARNED MONEY IN THE FORM OF GIFT TO APPELLANT AND OTHER PERSONS. WHILE EXAMINING THE GENUINENESS OF THE GIFT THE FAC TS OF THE CASE ARE TO BE CONSIDERED; HUMAN CONDUCT AND PREPONDERANCE OF T HE PROBABILITY ARE TO BE SEEN. IN TODAYS COMMERCIAL WORLD WHEN N O PERSON WOULD PART WITH EVEN A SMALL AMOUNT OF GIFT WITHOUT ANY R EASON, OCCASION AND RELATIONSHIP SUCH HUGE GIFT FROM PERSON OF UNKN OWN IDENTITY CANNOT BE COMPLETE DISREGARD TO THIS SITUATION, HE STILL HAD RECEIPT A VALID GIFT. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE 82 ITR 540 HAS HELD THAT HUMAN PROBABIL ITY AND CONDUCT HAS TO BE CONSIDERED IN TAXATION MATTERS. AT PAGE 545 THE HONBLE SUPREME COURT HAS HELD AS UNDER :- IT IS TRUE THAT APPARENT MUST BE CONSIDERED REAL U NTIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE APPARENT IS NOT THE REAL. IN A CASE OF THE PRESENT KIND A PART Y WHO RELIED ON A RECITAL IN A DEED HAS TO ESTABLISH THE TRUTH OF T HOSE RECITALS, OTHERWISE IT WILL BE VERY EASY TO MAKE SELF-SERVING STATEMENTS IN DOCUMENTS EITHER EXECUTED OR TAKEN BY A PARTY AND R ELY ON THOSE RECITALS. IF ALL THAT AN ASSESSEE WHO WANTS TO EVA DE TAX IS TO HAVE SOME RECITALS MADE IN A DOCUMENT EITHER EXECUT ED BY HIM OR EXECUTED IN HIS FAVOUR THEN THE DOOR WILL BE LEF T WIDE OPEN TO EVADE TAX. A LITTLE PROBING WAS SUFFICIENT IN THE PRESENT CASE TO SHOW THAT THE APPARENT WAS NOT THE REAL. THE TAXIN G AUTHORITIES WERE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DOCUMENTS PRODUCED BEFORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS. ITA NO.192/AGR/2007 A.Y. 2000-01 . 21 SIMILARLY, THE HONBLE SUPREME COURT IN THE CASE OF WORKMEN OF ASSOCIATED RUBBER INDUSTRY LTD. VS. ASSOCIATED R UBBER INDUSTRIES LTD. AND ANOTHER IN 157 ITR 77 HAS HELD AS UNDER :- IT IS THE DUTY OF THE COURT, IN EVERY CASE WHERE I NGENUITY IS EXPENDED TO AVOID TAXING AND WELFARE LEGISLATION S, TO GET BEHIND THE SMOKE-SCREEN AND DISCOVER THE TRUE STATE OF AFFAIRS. THE COURT IS NOT TO BE SATISFIED WITH FORM AND LEAV E WELL ALONE THE SUBSTANCE OF A TRANSACTION. .. AVOIDANCE OF WELFARE LEGISLATION IS AS COMMON AS AVOIDANCE OF TAXATION A ND THE APPROACH IN CONSIDERING PROBLEMS ARISING OUT OF SUC H AVOIDANCE HAS NECESSARILY TO BE THE SAME. 3.6 IN THE CASE OF SUMATI DAYAL 214 ITR 801 THE SUP REME COURT HAS HELD THAT SURROUNDING CIRCUMSTANCES AND HUMAN P ROBABILITIES ARE TO BE KEPT IN VIEW IN TAXATION MATTER. IN SUCH MAT TER A SUPERFICIAL APPROACH HAS TO BE AVOIDED. 3.7 THE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. L.N. DALMIA IN 207 ITR 89 HAS HELD THAT FOR DETERMINING WHETHER TH E TRANSACTION SHAM OR A DEVICE OR A ROUTE, INCOME-TAX AUTHORITIES ARE ENTITLED TO ENTER THE FACTUAL COVER AND ASCERTAIN THE TRUTH. 3.8 IN THE CASE OF SUNIL SIDHARTH VS. CIT 156 ITR 5 07 THE SUPREME COURT HAS HELD THAT IT WAS OPEN TO THE INCOME-TAX A UTHORITIES TO GO BEHIND THE TRANSACTION AND EXAMINE WHETHER THE TRAN SACTION WAS GENUINE OR NOT. 3.9 SIMILARLY THE HONBLE SUPREME COURT IN THE FAMO US CASE OF MCDOWELL HAS HELD THAT AVOIDANCE OF TAX THROUGH COL ORABLE DEVICE WAS NOT PERMISSIBLE. THE AFORESAID DECISION HAS BE EN FOLLOWED BY THE KERALA HIGH COURT IN THE CASE OF CIT VS. S. AMI IN 210 ITR 585 AND THE KERALA HIGH COURT HAS HELD THAT EVEN AFTER THE DECISION IN THE CASE OF CWT VS. ARVIND NARROTAM 173 ITR 479 THE DEC ISION OF THE APEX COURT IN THE CASE OF MCDOWELL STILL HOLD THE F LIT. IF THE CONDUCT OF APPELLANT/DONOR IS SEEN IN THE LIGHT OF THE ABOVE D ECISION THE SAME WOULD NOT APPEAL TO EVEN THE PERSON OF ORDINARY PRU DENCE. 3.10 IN VIEW OF THE ABOVE DISCUSSION, THE CONTENTIO N OF THE AR THAT GENUINENESS, IDENTITY AND CREDITWORTHINESS OF THE D ONOR HAS BEEN PROVED AND AO HAS NOT BROUGHT ANY MATERIAL TO SUPPO RT HIS STAND THAT ITA NO.192/AGR/2007 A.Y. 2000-01 . 22 THE APPELLANT HAS INTRODUCED HIS UNACCOUNTED MONEY IN THE GARB OF GIFT IS NOT ACCEPTABLE. IT IS ABUNDANTLY CLEAR THE GIFT UNDER QUESTION WAS ARRANGED BY THE APPELLANT TO INTRODUCE HIS OWN UNACCOUNTED MONEY IN REGULAR BOOKS OF ACCOUNT. THE ADDITION MA DE BY THE AO IS THEREFORE CONFIRMED. THUS, APPELLANTS GROUNDS ARE REJECTED. 6. WE HAVE PERUSED THE ORDERS OF A.O., CIT(A) AND A LSO GONE THROUGH AND EXAMINED COPY OF THE STATEMENT OF SHRI D.K. AGARWAL , LEGAL HEIR OF SMT. NEELAM KUMARI OF WHICH COPY HAS BEEN PLACED AT OLD PAPER B OOK PAGE NOS.30 & 31. ON PERUSAL OF THIS DOCUMENT, STATEMENT ON OATH OF SHRI D.K. AGARWAL, L.H. OF SMT. NEELAM KUMARI, WE NOTICE THAT THE STATEMENT WAS REC ORDED ON 12.06.2006 RELATING TO GIFT OF RS.1,00,000/- BY SMT. NEELAM KUMARI. SH RI AGARWAL REPLIED THAT HE HAS FURNISHED A BUNCH OF PAPERS OF 95 PAGES AND EVERYTH ING IS WRITTEN IN THOSE PAPERS. IN ADDITION TO THAT HE DID NOT WANT TO SAY ANYTHING . IN QUESTION NO.2, IT WAS ASKED THAT IN BANK ACCOUNT RS.1,30,000/- AND RS.1,10,000/ - CASH WAS DEPOSITED ON 26.08.1999, 27.08.1999 AND 28.08.1999 RESPECTIVELY. IT WAS ASKED TO EXPLAIN THE SOURCE. IN REPLY TO THAT IT WAS STATED THAT THE AM OUNT WAS OUT OF TRUST CAPITAL WHICH IS ON RECORD. THE ASSESSEE VIDE DATED 21.12.2005 FI LED BEFORE THE A.O STATED THAT SMT. NEELAM KUMARI HAS EXPIRED ON 22.12.2002. THER EFORE, THE QUESTION DOES NOT ARISE TO APPEAR BEFORE THE A.O. IT WAS ALSO STATED THAT IN M/S. BRIJ MOHAN LAL & SONS AND M/S. NARMADA BENEFIT TRUST SMT. NEELAM KUM ARI WAS MANAGING TRUSTEE. A SURVEY DATED 24.04.2001 WAS CARRIED OUT AT THE RESIDENCE/OFFICE OF SHRI D.K. AGARWAL, C.A. AND RECORDS RELATING TO TRUST WE RE TAKEN OVER BY THE ITA NO.192/AGR/2007 A.Y. 2000-01 . 23 DEPARTMENT. THE TRUST HAS CLOSED THE ACTIVITIES W. E.F. 31.03.2002. THE GIFT OF RS.1,00,000/- WAS GIVEN ON 25.08.1999 BY MANAGING T RUSTEE SMT. NEELAM KUMARI BY CHEQUE. THE RELEVANT ENTRIES ARE DULY RECORDED IN THE BOOKS OF ACCOUNT WHICH WERE ALSO IN THE POSSESSION OF THE DEPARTMENT. THE TRUST IS A VALID TRUST ASSESSED UNDER SECTION 151 OF THE INCOME TAX ACT. IN RESPECT OF GIFT BY SMT. NEELAM KUMARI, IT WAS STATED THAT SHE IS ASSESSED TO TAX A ND PAN WAS ALSO GIVEN. THE GIFT WAS GIVEN THROUGH CHEQUE. IN RESPECT OF GIFT FROM RATTAN SINGH, IT WAS STATED THAT THE ASSESSEE HAS DISCHARGED THE ONUS AS HE HAS PROV ED THE IDENTITY OF THE DONOR WHO HAS BEEN ASSESSED TO TAX. THE GIFT WAS GIVEN THROU GH ACCOUNT PAYEE CHEQUE. THE GIFT DEED OF SMT. NEELAM KUMARI AND ITS ACCEPTANCE, CONFIRMATION OF GIFT, REPLY GIVEN BY THE D K AGARWAL WAS ALSO FIELD AS EVIDENCE BEFORE THE A.O. IN RESPECT OF GIFT FROM SHRI RATTAN SINGH, CONFIRMATION OF TWO GI FTS, TWO GIFT DEEDS AND ITS ACCEPTANCE COPY OF RETURN WERE FILED. STATEMENT OF SHRI VIJAY SINGH, SON OF L.H. OF LATE SHRI RATTAN SINGH RECORDED UNDER SECTION 131 O F THE ACT ON 29.05.2006. IN THE SAID STATEMENT IT WAS STATED BY THE SHRI VIJAY SING H THAT RATTAN SINGH HAS EXPIRED ON 16.06.2001. A DEATH CERTIFICATE ISSUED BY GRAM PANCHAYAT PANVARI DATED 15.06.2006 WAS ALSO FILED. IN RESPECT TO QUESTION NO.4 IT WAS STATED THAT BEFORE THE DEATH LATE SHRI RATTAN SINGH HAS TOLD TO SHRI VIJAY SINGH THAT HE HAS GIVEN GIFT OF RS.2,00,000/- TO THE ASSESSEE. IN QUESTION NO. NIL THE PURPOSE OF THE GIFT WAS ASKED WHEREIN VIJAY SINGH REPLIED THAT THE ASSESSEE AND H IS FATHER WERE FAMILY MEMBERS AND IN 1987 WHEN HIS MOTHER GOT ACCIDENT THE ASSESS EE HAS EXTENDED PHYSICAL AS ITA NO.192/AGR/2007 A.Y. 2000-01 . 24 WELL AS FINANCIAL HELP. THEREFORE, THE GIFT WAS GI VEN FOR RS.2,00,000/-. IN REPLY TO QUESTION NO.8, IT WAS STATED THAT SINCE IT WAS AN O LD LETTER, THEREFORE COPY OF BANK ACCOUNT COULD NOT BE PRODUCED. HOWEVER, LATE SHRI RATTAN SINGH WAS DOING DALALI OF BRICKS. IN REPLY TO QUESTION NO.9 IT WAS STATED THAT OUT OF TOTAL RS.5,10,000/- HIS FATHER HAS GIVEN GIFT OF RS.2,00,000/- TO THE ASSES SEE AND GIFT OF RS.1,10,000/- WAS GIVEN TO VIJAY SINGH. HE DID NOT KNOW ABOUT THE BA LANCE AMOUNT. IN REPLY TO QUESTION NO.10, IT WAS STATED THAT HIS FATHER WAS H AVING TWO BHIGAS OF AGRICULTURAL LAND.SL. COPIES OF RETURN FILED BY SHRI RATTAN SIN GH FOR A.Y. 1997-98 TO 2000-01 AND COPIES OF BALANCE SHEET AND PROFIT & LOSS ACCOU NT HAVE BEEN PLACED AT OLD PAPER BOOK PAGE NOS. 21 TO 29. COPY OF REPLY DATED 22.05.2006 AND 28.05.2006 FILED BEFORE A.O. OF WHICH COPY HAS BEEN PLACED AT PAPER BOOK PAGE NOS.6 & 7 WHEREIN IT WAS REQUESTED TO ISSUE SUMMON IN THE NAM E OF LEGAL HEIRS OF THE DONORS.COPY OF DEATH CERTIFICATE DATED 15.05.2006 I SSUED BY GRAM PANCHAYAT PANWARI, PHOTOCOPY OF THE SAME HAS BEEN PLACED AT P AGE NO. 8 OF THE PAPER BOOK COPY OF KATAUNI OF AGRICULTURE LAND IN THE NAME OF SHRI RATTAN SINGH AND HIS SON. 7. ON PERUSAL OF THE ORDER OF M.A. DATED 17.09.2009 , WE FIND THAT CERTAIN EVIDENCE IN THE FORM OF COPY OF OWNERSHIP OF AGRICU LTURAL LAND WHICH HAS BEEN PLACED ON RECORD AND WERE AVAILABLE AT THE TIME OF ORIGINAL ORDER OF TRIBUNAL MENTIONED AT PAGE NOS.16 & 17 BUT SAME WERE NOT CON SIDERED BY THE ITAT. THE I.T.A.T. HAS RECALLED THE ORDER, ACCEPTING THE ASSE SSEES CONTENTION THAT THE COPY OF ITA NO.192/AGR/2007 A.Y. 2000-01 . 25 OWNERSHIP OF AGRICULTURAL LAND WHICH HAS BEEN PLACE D AT PAGE NO MENTIONED AT PAGE NOS.16 & 17 BUT SAME WERE NOT CONSIDERED BY THE I.T .A.T. IN THE NAME OF RATTAN SINGH AND AFTER THE DEATH OF RATTAN SINGH THEIR LEG AL HEIR IS ON RECORD, BUT THE SAME WAS NOT CONSIDERED. THE EFFECTIVE GROUND RAIS ED IN THIS APPEAL IS PERTAINING TO ADDITION MADE ON ACCOUNT OF GIFT RS.1,00,000/- G IVEN BY SMT. NEELAM KUMARI AND RS.2,00,000/- BY SHRI RATTAN SINGH. THE CRUX O F THE ARGUMENT AND CONTENTION OF THE ASSESSEE THAT THE ADDITION ON ACCOUNT OF GIF TS ARE NOT WARRANTED AS THE ASSESSEE HAS PROVED THE IDENTITY AND FINANCIAL CAPA CITY OF THE DONOR AND GENUINENESS OF THE TRANSACTION WHICH IS THROUGH BAN KING CHANNEL. THE DONORS ARE ASSESSED TO TAX AND HAVE CONFIRMED THE FACTS OF GIF T. THE CASE OF THE A.O. IS THAT THE ASSESSEE HAS INTRODUCED HIS OWN UNACCOUNTED MON EY IN THE GARB OF GIFT THROUGH ARTIFICIAL DONOR. THEREFORE, THE ADDITION IS WARRA NTED UNDER SECTION 68 OF THE ACT. THE VIEW OF THE A.O. HAS BEEN CONFIRMED BY THE CIT( A). IN OTHER WORDS, THE CASE OF THE REVENUE IS THAT THE GIFTS WERE NOT GENUINE. BEFORE COMING TO THE FACTS OF THE CASE, WE WOULD LIKE TO DISCUSS THE ISSUE WHAT IS GE NUINE GIFT. TO EXAMINE THE ISSUE LET US SEE WHAT IS MEANING OF THE GIFT. THE ORDINA RY MEANING OF THE GIFT IS A TRANSFER BY ONE PERSON TO ANOTHER OF ANY EXISTING MOVABLE OR IMMOVABLE PROPERTY MADE VOLUNTARILY OR WITHOUT CONSIDERATION OF MONEY OR MO NEY WORTH. IN LEGAL EFFECT, THERE CANNOT BE A GIFT WITHOUT A GIVING AND TAKIN G. THE GIVING AND TAKING ARE THE TWO CONTEMPORANEOUS RECIPROCAL ACTS WHICH CONSTITUT E A GIFT. IN ORDER TO MAKE A VALID GIFT, THERE MUST BE PERFECT KNOWLEDGE IN THE MIND OF THE PERSON MAKING THE ITA NO.192/AGR/2007 A.Y. 2000-01 . 26 GIFT OF THE EXTENT OF THE BENEFICIAL INTEREST INTEN DED TO BE CONFERRED, AND OF WHICH MAKING IT. DONOR GIVES GIFT IN MONEY OR MONEYS WOR TH AND TAKING LOVE AND AFFECTION FROM DONEE. TO EXAMINE THE ISSUE FROM POI NT OF VIEW OF THE PROVISIONS OF INCOME TAX ACT WE ARE TO SEE THE NATURE OF THE TRAN SACTION. GIFT, ITS NATURE IS CREDIT IN THE HANDS OF THE DONEE BECAUSE DONEE CREDITED GI FT AMOUNT HIS/HER CAPITAL ACCOUNT AND BEING TREATED AS OWN MONEY/CAPITAL. NOR MALLY SUCH CREDIT ENTRY IN CAPITAL ACCOUNT CAN BE MADE ONLY OF THE TRANSITION WHICH HAS BEEN PROCESSED THROUGH THE PROVISIONS OF THE INCOME TAX ACT. IT AP PEARS FROM READING OF SECTION 68 OF THE ACT THAT WHENEVER A SUM IS FOUND CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE THEN, IRRESPECTIVE OF THE COLOUR OR THE NA TURE OF THE SUM RECEIVED WHICH IS SOUGHT TO BE GIVEN BY THE ASSESSEE, THE INCOME-TAX OFFICER HAS THE JURISDICTION TO ENQUIRE FROM THE ASSESSEE THE NATURE AND SOURCE OF THE SAID AMOUNT. WHEN AN EXPLANATION IN REGARD THERETO IS GIVEN BY THE ASSES SEE THEN, IT IS FOR THE INCOME-TAX OFFICER TO BE SATISFIED WHETHER THE SAID EXPLANATIO N IS CORRECT OR NOT. IT IS IN THIS REGARD THAT ENQUIRIES ARE USUALLY MADE IN ORDER TO FIND OUT AS TO WHETHER, FIRSTLY THE PERSONS FROM WHOM MONEY IS ALLEGED TO HAVE BEEN RE CEIVED ACTUALLY EXISTED OR NOT. SECONDLY DEPENDING UPON THE FACTS OF EACH CAS E, THE INCOME-TAX OFFICER MAY EVEN BE JUSTIFIED IN TRYING TO ASCERTAIN THE SOURCE OF THE DEPOSITOR, ASSUMING HE IS IDENTIFIED, IN ORDER TO DETERMINE WHETHER THAT DEP OSITOR IS A MERE NAME LENDER OR NOT. BE THAT AS IT MAY, IT IS CLEAR THAT THE INCOME -TAX OFFICER HAS JURISDICTION TO MAKE ENQUIRIES WITH REGARD TO THE NATURE AND SOURCE OF A SUM CREDITED IN THE BOOKS ITA NO.192/AGR/2007 A.Y. 2000-01 . 27 OF ACCOUNT OF AN ASSESSEE AND IT WOULD BE IMMATERIA L AS TO WHETHER THE AMOUNT SO CREDITED IS GIVEN THE COLOUR OF A LOAN OR A SUM REP RESENTING THE SALE PROCEEDS OR EVEN RECEIPT OF GIFT. THE USE OF THE WORDS ANY SU M FOUND CREDITED IN THE BOOKS IN SECTION 68 INDICATES THAT THE SAID SECTION IS VERY WIDELY WORDED AND AN INCOME-TAX OFFICER IS NOT PRECLUDED FROM MAKING AN ENQUIRY AS TO THE TRUE NATURE AND SOURCE THEREOF EVEN IF THE SAME IS CREDITED AS GIFT. WHAT IS CLEAR, HOWEVER, IS THAT SECTION 68 CLEARLY PERMITS AN INCOME-TAX OFFICER TO MAKE EN QUIRIES WITH REGARD TO THE NATURE AND SOURCE OF ANY OR ALL THE SUMS CREDITED I N THE BOOKS OF ACCOUNT OF THE COMPANY IRRESPECTIVE OF THE NOMENCLATURE OR THE SOU RCE INDICATED BY THE ASSESSEE. IN OTHER WORDS, THE TRUTHFULNESS OF THE ASSERTION O F THE ASSESSEE REGARDING THE NATURE AND THE SOURCE OF THE CREDIT IN ITS BOOKS OF ACCOUN T CAN BE GONE INTO BY THE INCOME TAX OFFICER. THERE IS NO QUARREL WITH THE PROPOSITI ON THAT A MERE IDENTIFICATION OF THE DONOR AND SHOWING THE MOVEMENT OF THE GIFT AMOU NT THROUGH BANKING CHANNELS IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE G IFT AND SINCE THE CLAIM OF A GIFT IS MADE BY THE ASSESSEE THE ONUS LIES ON HIM NOT ONLY TO ESTABLISH THE IDENTITY OF THE DONOR BUT HIS CAPACITY TO MAKE SUCH A GIFT AND GENU INENESS OF THE GIFT. THE ASSESSEE IS REQUIRED TO PROVE THREE IMPORTANT CONDITIONS, NA MELY, (I) THE IDENTITY OF THE CREDITOR, (II) THE CAPACITY OF THE CREDITOR TO ADVA NCE THE MONEY, AND (III) THE GENUINENESS OF THE TRANSACTION. WHAT EVIDENCE WOUL D BE SUFFICIENT TO ESTABLISH THE SAID CONDITIONS OR WHAT MATERIAL WOULD BE RELEVANT IN A PARTICULAR CASE, WOULD DEPEND ON THE FACTS OF EACH CASE. THERE CANNOT BE ONE GENERAL GUIDING YARDSTICK IN ITA NO.192/AGR/2007 A.Y. 2000-01 . 28 THE MATTER. HOWEVER, IN THIS REGARD, AN IMPORTANT C LUE CAN BE TAKEN FROM SOME JUDGMENTS OF THE COURTS. 8. ACCORDINGLY, WE WOULD LIKE TO REFER ONE OF THE J UDGMENTS OF THE APEX COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE, 82 ITR 54 0 (SC) WHEREIN THE COURT HELD THAT SCIENCE HAS NOT YET INVENTED ANY INSTRUMENT TO TEST THE RELIABILITY OF THE EVIDENCE PLACED BEFORE A COURT OR TRIBUNAL. THEREF ORE, THE COURTS AND TRIBUNALS HAVE TO JUDGE THE EVIDENCE BEFORE THEM BY APPLYING THE TEST OF HUMAN PROBABILITIES. IT HAS BEEN FURTHER HELD AS UNDER:- IT IS TRUE THAT AN APPARENT MUST BE CONSIDERED REA L UNTIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE AP PARENT IS NOT THE REAL. IN A CASE OF THE PRESENT KIND A PARTY WHO REL IES ON A RECITAL IN A DEED HAS TO ESTABLISH THE TRUTH OF THOSE RECITALS, OTHERWISE IT WILL BE VERY EASY TO MAKE SELF-SERVING STATEMENTS IN DOCUME NTS EITHER EXECUTED OR TAKEN BY A PARTY AND RELY ON THOSE RECI TALS. IF ALL THAT AN ASSESSEE WHO WANTS TO EVADE TAX IS TO HAVE SOME REC ITALS MADE IN A DOCUMENT EITHER EXECUTED BY HIM OR EXECUTED IN HIS FAVOUR THEN THE DOOR WILL BE LEFT WIDE OPEN TO EVADE TAX. A LITTLE PROBING WAS SUFFICIENT IN THE PRESENT CASE TO SHOW THAT THE APPARENT WAS N OT THE REAL. THE TAXING AUTHORITIES WERE NOT REQUIRED TO PUT ON BLIN KERS WHILE LOOKING AT THE DOCUMENTS PRODUCED BEFORE THEM. THEY WERE EN TITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS. 9. THE APEX COURT IN THE CASE OF COMMISSIONER OF IN COME TAX VS. P. MOHANAKALA, 291 ITR 278 (SC) HAS LAID DOWN CERTAIN GUIDELINES IN RESPECT OF THE GENUINENESS OF A GIFT. IN THIS CASE, FOLLOWING QUE STIONS HAVE BEEN ANSWERED BY THE HIGH COURT IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE :- ITA NO.192/AGR/2007 A.Y. 2000-01 . 29 (A) WHETHER, IN THE FACTS AND CIRCUMSTANCES, THE INCOME-TAX APPELLATE TRIBUNAL WAS CORRECT IN LAW TO ACCEPT THE PRINCIPLE OF PREPO NDERANCE OF PROBABILITIES IN HOLDING THAT THE CLAIM OF THE APPELLANT THAT THE SUM OF RS. 15,62,500 RECEIVED HIM BY WAY OF GIFTS THROUGH NORMAL BANKIN G CHANNELS WAS NOT GENUINE AND THAT IT WAS LIABLE TO BE ASSESSED UNDE R SECTION 68 OF THE INCOME- TAX ACT, 1961 ? (B) WHETHER, IN THE LIGHT OF THE LAW ESTABLISHED AND BASED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED INCOME-TAX A PPELLANT TRIBUNAL IS LEGALLY JUSTIFIED IN CONCLUDING THAT BURDEN OF PROO F CAST ON THE APPELLANT UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 HAS NO T BEEN DISCHARGED AND THE INGREDIENTS FOR INVOKING SECTION 68 OF THE INCO ME-TAX ACT ARE PRESENT? (C) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CONCLUSION OF THE TRIBUNAL THAT THE CLAIM OF GIFT IS NOT GENUINE IS R EASONABLE AND BASED ON RELEVANT MATERIAL AND NOT PERVERSE ? 9.1 THE BRIEF FACTS OF THE CASE WHICH WAS BEFORE TH E APEX COURT WERE THAT THE DISPUTE IN ALL THOSE APPEALS RELATES TO THE ADDITIO N MADE BY THE ASSESSING OFFICER IN RESPECT OF SEVERAL FOREIGN GIFTS STATED TO HAVE BEE N RECEIVED BY THE ASSESSEES FROM ONE COMMON DONOR NAMELY SAMPATH KUMAR. THE GIFTS RECEIVED WERE FROM ONE ITA NO.192/AGR/2007 A.Y. 2000-01 . 30 ARIAVAN THOTAN AND SUPROTOMAN. IT IS DURING THE EN QUIRY BY THE REVENUE IT IS ASSERTED THAT THEY WERE THE ALIASES OF SAMPATHKUMAR . THESE GIFTS WERE MADE TO A. SRINIVASAN AND HIS WIFE, SMT. S. KALAVATHY, HIS SO N, S. BALAJI MANIKANDAN AND TO ONE OF HIS BROTHERS, RAJENDRAN AND SMT. MOHANAKALA .IN ALL THE AGGREGATE GIFTS RECEIVED BY THE ASSESSEES IS TO THE EXTENT OF RS.1 ,79,27,703. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OFFERED BY THE RESPE CTIVE ASSESSEES THAT THE AMOUNT OF CREDIT IS A GIFT FROM NRI AND PROCEEDED TO ADD I T AS THE INCOME OF THE ASSESSEES FROM UNDISCLOSED SOURCES. THE CREDIT ENTRIES HAVE B EEN MADE DURING THE PERIOD FROM JULY 8, 1992 TO OCTOBER 19, 1995. THERE IS NO DISPUTE THAT THE PAYMENTS WERE MADE BY INSTRUMENTS ISSUED BY A FOREIGN BANK AND CR EDITED INTO THE RESPECTIVE ASSESSEES ACCOUNT BY NEGOTIATION THROUGH A BANK IN INDIA. MOST OF THE CHEQUES SENT FROM ABROAD WERE DRAWN ON CITIBANK, N.A. SINGA PORE. THE ASSESSING OFFICER DEALT WITH THE CONTROVERSY AS REGARDS THE CASH CRED IT ENTRIES RECEIVED FROM THE FOREIGN DONOR. HE NOTICED THAT THE GIFTS HAVE BEEN SENT IN THE NAME OF ARIAVAN THOTTAN AND RECEIVED BY A. SRINIVASAN AND OTHERS WH O ARE ALL HIS FAMILY MEMBERS. EACH ONE OF THEM IS AN INDIVIDUAL ASSESSEE. ALL THE ASSESSEES WERE SUMMONED AND THEIR STATEMENTS HAVE BEEN RECORDED BY THE ASSESSIN G OFFICER. SRINIVASAN WHO IS THE KEY PERSON IN HIS STATEMENT SAID THAT HE KNEW S AMPATHKUMAR FOR THE LAST 20 YEARS AND HE HAD BEEN HELPING SAMPATHKUMAR PRIOR TO 1985 BY PAYING RS. 100 TO 200 EVERY MONTH AS HE HAD NO SOURCE OF INCOME TO GE T HIMSELF EDUCATED. SAMPATHKUMAR IN HIS OWN STATEMENT STATED THAT HE WA S IN INDONESIA UP TO THE YEAR ITA NO.192/AGR/2007 A.Y. 2000-01 . 31 1992 AND EMPLOYED AS AN ENGINEER. THEREAFTER, HE S HIFTED TO ENGLAND AND STARTED CONSULTANCY PROFESSION THERE. LATER IN THE END OF T HE YEAR 1994-95, HE JOINED NEW CENTURY MACHINERY LTD., CHESHIRE, SK 16 4XS AND BEC AME ITS DIRECTOR IN 1996. IT IS IN HIS STATEMENT THAT HE IS PAYING TAXES IN ENGL AND FROM HIS INCOME EARNED IN ENGLAND. AS FAR AS HIS INDIAN INCOME IS CONCERNED, HE STATED THAT HE FILED THE RETURNS FOR THE ASSESSMENT YEARS 1996-97 AND 1997-9 8 BEFORE THE INCOME-TAX OFFICER, WARD 1(4), CBE ONLY ON OCTOBER 23, 1997. H IS INVESTMENT IN INDIAN COMPANIES ACCORDING TO HIM WILL BE AROUND RS.5 CROR ES AND MADE OUT OF HIS INCOME EARNED IN THE FOREIGN COUNTRIES. HE DID NOT REVEAL THE DETAILS OF HIS BANK ACCOUNT IN INDIA AND STATED THAT HE WOULD BE SUBMITTING THE DE TAILS THROUGH HIS AUDITOR WHICH HE DID NOT. EXCEPT THE SELF SERVING STATEMENT THERE IS NO MATERIAL EVIDENCE AS REGARDS HIS FINANCIAL STATUS. HE STATED FROM 1972- 73 HE KNEW SRINIVASAN, RAJENDRAN AND THEIR FAMILIES. HIS FATHER WAS A TAX I DRIVER, AND WAS VERY POOR. SRINIVASAN AND HIS FAMILY MEMBERS WERE SUPPORTING H IM WHEN HE WAS IN INDIA. TO A POINTED QUERY AS TO WHETHER THERE IS ANY EVIDENCE TO SHOW THAT HE WAS ALSO KNOWN BY ANY OTHER NAME OTHER THAN SAMPATHKUMAR, HE STATED THAT NO EVIDENCE. ONLY MR. SRINIVASAN USED TO CALL ME AS SUPROTOMAN. THE ASSESSING OFFICER IN THE CIRCUMSTANCES CAME TO THE CONCLUSION THAT THE GIFTS THOUGH APPARENT ARE NOT REAL AND ACCORDINGLY TREATED ALL THOSE AMOUNTS CREDITED IN THE BOOKS OF THE ASSESSEE AS THE INCOME OF THE ASSESSEE. ON APPEAL THE COMMISSIO NER OF INCOME TAX CONCLUDED THAT THE STORY SET UP BY THE ASSESSEE IS UNACCEPTAB LE AND HARD TO BELIEVE AND THE ITA NO.192/AGR/2007 A.Y. 2000-01 . 32 PREPONDERANCE OF PROBABILITIES, THE COMMON COURSE OF HUMAN LIVINGS POINT TO THE CONTRARY. THE APPEALS WERE ACCORDINGLY DISMISSED. THE I.T.A.T. CONCURRED WITH THE FINDINGS AND CONCLUSIONS ARRIVED AT BY THE ASSE SSING OFFICER AND THE COMMISSIONER OF INCOME-TAX. THE TRIBUNAL NOTICED TH AT THE LETTERS EXCHANGED BY THE PERSON WHO HAD SENT FOREIGN EXCHANGE TO THE ASS ESSEE ONLY INDICATE THAT THERE IS NO LOVE AND AFFECTION BETWEEN THEM AND THAT HE IS C LEARLY MATERIALISTIC AND HIS STATEMENT OF ACCEPTING A RECIPROCATION IS ALSO AN I NDICATION TO THE FACT THAT HE IS NOT DOING ANYTHING FREE BUT CLEARLY THE COMPENSATION WA S A ROUNDABOUT MANNER OF SHOWING OF HE HAVING BEEN COMPENSATED EITHER IN IND IA OR ABROAD. THE TRIBUNAL ALSO TOOK NOTE OF THE VARIOUS OTHER ATTENDING CIRCU MSTANCES AND FOUND IT DIFFICULT TO ACCEPT THE EXPLANATION OFFERED BY THE ASSESSEE. TH E HIGH COURT CAME TO THE CONCLUSION THAT THE REASONS ASSIGNED BY THE TRIBUNA L AND OTHER AUTHORITIES ARE IN THE REALM OF SURMISES, CONJECTURES AND SUSPICIONS . . . THE AUTHORITIES UNDER THE ACT HAVE FAILED TO DRAW THE ONLY CONCLUSION THAT IS POS SIBLE LEGALLY AND LOGICALLY. 9.2 THE APEX COURT HELD AS UNDER:- EXPLANATION OFFERED WAS NOT SATISFACTORY. THE ASSE SSEES DID NOT TAKE THE PLEA THAT EVEN IF THE EXPLANATION IS NOT ACCEPTABLE THE MATERIAL AND ATTENDING CIRCUMSTANCES AVAILABLE ON R ECORD DO NOT JUSTIFY THE SUM FOUND CREDITED IN THE BOOKS TO BE TREATED AS A RECEIPT OF AN INCOME NATURE. THE BURDEN IN THIS REGARD WAS ON THE ASSESSEES. NO SUCH ATTEMPT HAS BEEN MADE BEFORE ANY AUTHORITY. ALL THE DECISIONS CITED AND REFERRED TO HEREINABOVE ARE REQUIRED TO B E APPRECIATED AND UNDERSTOOD IN THE LIGHT OF THE LAW DECLARED BY THIS COURT IN SUMATI DAYAL [1995] SUPP 2 SCC 453. ITA NO.192/AGR/2007 A.Y. 2000-01 . 33 WHETHER THE HIGH COURT WAS JUSTIFIED IN INTERFERIN G WITH THE CONCURRENT FINDING OF FACT ARRIVED AT BY ALL THE AU THORITIES INCLUDING THE TRIBUNAL? THE ASSESSING OFFICER FOUND THAT ALL THE SO-CALLED GIFTS CAME FROM ARIAVAN THOTAN AND SUPROTOMAN. THE ASSESS EES DID NOT DECLARE THAT THEY ARE THE ALIASES OF SAMPATHKUMAR. IT IS ONLY AN AFTERTHOUGHT THEY HAVE COME FORWARD WITH THE SAID P LEA. THE ASSESSING OFFICER ALSO FOUND THAT THE GIFTS WERE NO T REAL IN NATURE. VARIOUS SURROUNDINGS CIRCUMSTANCES HAVE BEEN RELIED UPON BY THE ASSESSING OFFICER TO REJECT THE EXPLANATION OFFERED BY THE ASSESSEES. THE COMMISSIONER OF APPEALS CONFIRMED THE FINDINGS AND CONCLUSION DRAWN BY THE ASSESSING OFFICER. THE TRIBUNAL SPEAKI NG THOUGH ITS SENIOR VICE PRESIDENT CONCURRED WITH THE FINDINGS O F FACT. THE FINDINGS IN OUR CONSIDERED OPINION ARE BASED ON THE MATERIAL AVAILABLE ON RECORD AND NOT ON ANY CONJECTURES AND SURMISES. THE Y ARE NOT IMAGINARY AS SOUGHT TO BE CONTENDED. RELYING ON THE DECISIONS OF THIS COURT IN BEJOY GOP AL MUKHERJI V. PRATUL CHANDRA GHOSE, AIR 1953 SC 153 AND ORIEN T DISTRIBUTORS V. BANK OF INDIA LTD. AIR 1979 SC 867, SHRI IYER, LEARNED SENIOR COUNSEL CONTENDED THAT THE ISSUE RELATING TO THE P ROPRIETY OF THE LEGAL CONCLUSION THAT COULD BE DRAWN ON THE BASIS OF PRO VED FACTS GIVES RISE TO A QUESTION OF LAW AND, THEREFORE, THE HIGH COUR T IS JUSTIFIED IN INTERFERING IN THE MATTER SINCE THE AUTHORITIES BE LOW FAILED TO DRAW A PROPER AND LOGICAL INFERENCE FROM THE PROVED FACTS. WE ARE UNABLE TO PERSUADE OURSELVES TO ACCEPT THE SUBMISSION. THE FI NDINGS OF FACT ARRIVED AT BY THE AUTHORITIES BELOW ARE BASED ON PR OPER APPRECIATION OF THE FACTS AND THE MATERIAL AVAILABLE ON RECORD A ND SURROUNDING CIRCUMSTANCES. THE DOUBTFUL NATURE OF THE TRANSACTI ON AND THE MANNER IN WHICH THE SUMS WERE FOUND CREDITED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE HAVE BEEN DULY TAKEN IN TO CONSIDERATION BY THE AUTHORITIES BELOW. THE TRANSACTIONS THOUGH APPARENT WERE HELD TO BE NOT REAL ONES. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUES AND WAS PAID THROUGH THE PROCESS OF BANKING TRANSAC TION BUT THAT ITSELF IS OF NO CONSEQUENCE. NO QUESTION OF LAW MUCH LESS ANY SUBSTANTIAL QUEST ION OF LAW HAD ARISEN FOR CONSIDERATION OF THE HIGH COURT. THE HIGH COURT MISDIRECTED ITSELF AND COMMITTED AN ERROR IN DISTUR BING THE CONCURRENT FINDINGS OF FACT. ITA NO.192/AGR/2007 A.Y. 2000-01 . 34 10. DELHI HIGH COURT IN THE CASE OF RAJEEV TANDON V S. ACIT, 294 ITR 488 (DELHI) HELD AS UNDER:- HAVING HEARD LEARNED COUNSEL FOR THE ASSESSEE, WE FIND THAT THE TRIBUNAL CONSIDERED THE ENTIRE CASE LAW ON THE SUBJECT INCLUDING SEVERAL DECISIONS OF THE SUPREME COURT AND THIS COU RT. REFERENCE HAS BEEN MADE TO CIT V. DURGA PRASAD MORE [1971] 82 ITR 540, WHEREIN THE SUPREME COURT OBSERVED THAT THE TAXING AUTHORIT IES WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REAL AND FACTUAL POSITION. SIMILARLY, THIS COURT IN SAJAN D ASS AND SONS V. CIT [2003] 264 ITR 435 TOOK THE VIEW THAT NOT ONLY MUST THE ASSESSEE ESTABLISH THE IDENTITY OF THE DONOR AND HIS CAPACIT Y TO MAKE THE GIFT, BUT HE MUST ALSO ESTABLISH THAT THE AMOUNT RECEIVED BY HIM WAS IN FACT A GIFT. WE MAY NOTE THAT VERY RECENTLY, THE SUPREME COURT D EALT WITH A SOMEWHAT SIMILAR SITUATION IN CIT V. P. MOHANAKALA [2007] 291 ITR 278. WHILE DEALING WITH SECTION 68 OF THE ACT, THE SUPREME COURT HELD THAT : (I) THERE HAS TO BE A CREDIT OF THE AMOUNT IN THE B OOKS MAINTAINED BY THE ASSESSEE. (II) SUCH CREDIT HAS TO BE OF A SUM DURING THE PREV IOUS YEAR. (III) THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CREDIT FOUND IN THE BOOKS, OR IF THE ASSESS EE OFFERS AN EXPLANATION THEN, IN THE OPINION OF THE ASSESSING O FFICER, IT IS NOT SATISFACTORY. IT IS ONLY THEN THAT THE SUM SO CREDITED MAY BE CHA RGED TO INCOME-TAX AS THE INCOME OF AN ASSESSEE. THE SUPREME COURT CONSIDERED THE EXPRESSION THE AS SESSEE OFFERS NO EXPLANATION AND OBSERVED THAT WHAT IT ME ANS IS THAT THE ASSESSEE OFFERS NO PROPER, REASONABLE AND ACCEPTABL E EXPLANATION IN THE OPINION OF THE ASSESSING OFFICER, FORMED OBJECT IVELY WITH REFERENCE TO THE MATERIAL AVAILABLE ON RECORD. ITA NO.192/AGR/2007 A.Y. 2000-01 . 35 11. PUNJAB & HARYANA HIGH COURT IN THE CASE OF YASH PAL GOEL V. CIT(A), 310 ITR 75 (P&H) UNDER THE CIRCUMSTANCES HELD THAT GIFT TRANSACTION WAS NOT GENUINE. THE COURT ALSO OBSERVED AS UNDER:- THE SO-CALLED GIFT SET UP BY THE APPELLANT WAS NOT BONA FIDE TRANSACTION. THE UNSCRUPULOUS USE EVERY GIMMICK TO AVOID PAYING INCOME-TAX. IF THE STATE EXCHEQUER IS MADE THE TAR GET OF DECEIT AND THE REVENUE COMES DOWN, THE DEVELOPMENT OF THE COUNTRY WILL BE A CASUALTY. IT IS REPREHENSIBLE THAT SAME CITIZENS S PEND ON LITIGATION AND UNNECESSARILY BRING MATTERS BEFORE COURTS THAN TO P AY TAX ON THEIR INCOME. THE TENDENCY NEEDS TO BE DISCOURAGED AND C URBED. THIS COURT IS CONSTRAINED TO FEEL THAT THE DEPARTMENT OF INCOME-TAX HAS UNNECESSARILY BEEN DRAGGED IN THIS LITIGATION AND T HE TIME OF THE COURT HAS ALSO BEEN WASTED. THEREFORE, RS.30,000/- IS IM POSED AS COSTS ON THE APPELLANT. THE AMOUNT SHALL BE DEPOSITED BY TH E APPELLANT WITHIN 45 DAYS FROM TODAY FAILING WHICH THE INCOME-TAX AUT HORITIES SHALL RECOVER IT FROM HIM AS ARREARS OF INCOME-TAX. 12. IN THE LIGHT OF THE ABOVE BACKGROUND OF DISCUSS ION, IF WE CONSIDER THE FACTS OF THE CASE UNDER CONSIDERATION, WE NOTICE THAT FOR THE PURPOSE OF GENUINE GIFT, MERELY GIVING AMOUNT THROUGH BANKING CHANNEL, PROVI NG IDENTITY AND CREDITWORTHINESS OF THE DONOR ARE NOT SUFFICIENT. THE IMPORTANT THING IN ADDITION TO IDENTITY AND CREDITWORTHINESS OF DONOR IN SUCH CASE WHICH IT REQUIRES TO PROVE BY THE ASSESSEE IS GENUINENESS OF THE GIFT. ON PERUSA L OF THE RECORDS INCLUDING THE DOCUMENTS POINTED OUT IN THE ORDER OF MISCELLANEOUS APPLICATION BY THE I.T.A.T., WE FIND THAT NO DOCUMENTS SUPPORT TO THE FACT THAT THERE WAS GENUINE GIFTS. MERELY FILING OF HOLDINGS OF AGRICULTURAL LAND OF DONOR DO ES NOT AMOUNT THAT THE GIFT WAS GENUINE. FILING OF GIFT DEED AND COPIES OF BANK AC COUNT ALSO DOES NOT SERVE THE ITA NO.192/AGR/2007 A.Y. 2000-01 . 36 PURPOSE TO HOLD THAT THERE WAS A GENUINE GIFT. THE SE DOCUMENTS REFERRED BY THE ASSESSEE ARE REQUIRED TO BE CONSIDERED IN THE LIGHT OF LAW LAID DOWN BY THE APEX COURT IN THE CASE OF CIT V DURGA PRASAD MORE 82 ITR 540 (SC) WHERE IN IT HAS BEEN HELD THAT SCIENCE HAS NOT YET INVENTED ANY INS TRUMENT TO TEST THE RELIABILITY OF THE EVIDENCE PLACED BEFORE A COURT OR TRIBUNAL. THE REFORE, THE COURTS AND TRIBUNALS HAVE TO JUDGE THE EVIDENCE BEFORE THEM BY APPLYING THE TEST OF HUMAN PROBABILITIES. IT HAS BEEN FURTHER HELD THAT IT IS TRUE THAT AN AP PARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE APPARENT IS NOT THE REAL. IN A CASE OF THE PRESENT KIND A PARTY WHICH IS UNDER CO NSIDERATION WHO RELIES ON SUCH BALANCE SHEET, GIFT DEED AND OTHER DOCUMENTS, THEY HAS TO ESTABLISH THE TRUTH OF THOSE DOCUMENTS, OTHERWISE IT WILL BE VERY EASY TO MAKE SELF-SERVING DOCUMENTS/STATEMENTS LIKE GIFT DEEDS EITHER EXECUT ED OR TAKEN BY A PARTY AND RELY ON THOSE DOCUMENTS. IF ALL THAT AN ASSESSEE WHO WA NTS TO EVADE TAX IS TO HAVE SOME RECITALS MADE IN A DOCUMENT EITHER EXECUTED BY HIM OR EXECUTED IN HIS FAVOUR THEN THE DOOR WILL BE LEFT WIDE OPEN TO EVADE TAX. A LIT TLE PROBING WAS SUFFICIENT IN THE PRESENT CASE TO SHOW THAT THE APPARENT WAS NOT THE REAL. THE TAXING AUTHORITIES WERE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING AT TH E DOCUMENTS PRODUCED BEFORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDI NG CIRCUMSTANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS. TH EREFORE IN THE CASE UNDER CONSIDERATION, ON PERUSAL OF COPIES OF RETURNS OF THE DONOR, IN THE CASE OF SHRI RATAN SINGH, WE OBSERVED THAT THERE IS A PRACTICE O F FILING SUCH RETURNS SHOWING ITA NO.192/AGR/2007 A.Y. 2000-01 . 37 MEAGER AMOUNT OF INCOME AND PAYING TAX OF RS.1, 000 /OR SO AND CREATING CAPITAL TO ACCOMMODATE THE SAME TO OTHER PARTIES BY INTRODUCIN G THEIR OWN UNACCOUNTED MONEY. THIS FINDING IS SUPPORTED BY CAPITAL ACCOUNT FOR THE YEAR ENDED 31.03.2000 OF LATE RATTAN SINGH, THE SAME IS REPRODUCED FROM PAGE 23 OF THE PAPER BOOK AS UNDER FOR THE PURPOSE OF READY REFERENCE :- CAPITAL ACCOUNT AS ON 31.03.2000 TO WITHDRAWAL 42,000.00 BY BALANCE 7,09,774. 00 TO GIFT GIVEN 5,10,000.00 BY INCOME 91,250.0 0 TO BALANCE C/D 3,07,524.00 BY AGRICULTURE INCOME 58,500.00 --------------- --------------- 8,59,524.00 8,59,524.00 -------------- --------------- 13. IT IS RELEVANT TO MENTION THAT IN A.Y. 2000-01 THE LATE SHRI RATTAN SINGH DID NOT PAY A SINGLE PENNY ON ACCOUNT OF TAX. THE INCO ME OF RS.22,500/- SHOWN ON BRICK DALALI AND INTEREST AND OTHER INCOME OF RS.68 ,750/- TOTAL INCOME RS.91,250/-. THE TAX DUE ON THE SAID INCOME IS RS.8,250/- BUT TH E CLAIM WAS MADE UNDER SECTION 88 OF THE ACT. THE BALANCE TAX PAYABLE WAS NIL. T HE ASSESSEE WAS HAVING OPENING BALANCE OF CAPITAL RS.7,09,774/- OUT OF WHICH HE MA DE GIFT RS.5,10,000/- WITHOUT POINTING OUT THE NAME TO WHOM THE GIFT WAS MADE. A FTER GIVING GIFT AMOUNT AND WITHDRAWAL, THE BALANCE CARRIED FORWARD WAS RS.3,07 ,524/-. A BALANCE SHEET AS ON 31.03.1997 HAS BEEN FILED OF WHICH COPY IS FILED AT PAGE NO.29 OF THE PAPER BOOK. FOR THE PURPOSE OF READY REFERENCE, THE SAME IS REP RODUCED AS UNDER :- (TRANSLATED IN ENGLISH) ITA NO.192/AGR/2007 A.Y. 2000-01 . 38 BALANCE SHEET AS ON 31.3.97 515024.00 RATAN SINGH, PROP. OF FIRM 50000.00 SOI L A/C. 467763.00 OLD BALANCE 16500.00 BHATTA GOLTA A/C . 47261.00 NET PROFIT 600.00 PNB BANK A/C. ----------------- 447924.00 CLOSING BALANCE ------------- ------------- 515024.00 515024.00 ------------- ------------- 14. IN THE SAID BALANCE SHEET, CLOSING BALANCE OF RS.4,47,924/- HAS BEEN SHOWN WITH POINTING OUT WHETHER IT WAS CASH OR BANK OR OT HER BALANCE. IN PRACTICE SUCH CAPITAL ACCOUNT AND SOURCE OF INCOME IS NOT BELIEVA BLE. THESE ARE THE FACTS WHICH SUPPORT WHAT WE HAVE STATED ABOVE THAT SUCH RETURN ARE BEING FILED TO CREATE THE CAPITAL TO ACCOMMODATE UNACCOUNTED MONEY. THEREFOR E, IN SPITE OF THE FACT THAT THE ASSESSEE FILED RETURNS AND THE SAME HAVE BEEN PROCE SSED CANNOT BE SAID TO BE GOOD AND SUFFICIENT EVIDENCE IN SUPPORT OF THE FACT THAT THE DONOR HAVING REAL CAPACITY TO GIVE THE GIFT AND THE GIFT WAS GENUINE. TO CURTAIL SUCH WRONG PRACTICE GOING ON, IT IS VERY MUCH NECESSARY TO HOLD THAT IN SUCH TYPE OF CASES THE GIFT CANNOT BE SAID TO BE GENUINE. 15. IN RESPECT OF GIFT FROM SMT. NEELAM KUMARI OF R S.1,00,000/-, MERELY SUBMITTING BY LEGAL HEIR OF DONOR THAT HE HAS GIVEN A BUNCH OF PAPER OF 95 PAGES THEREFORE THE DONOR HAS DISCHARGED THE BURDEN IS NO T ACCEPTABLE. THE A.O. IN HIS REMAND REPORT CLEARLY SUBMITTED THAT ON PERUSAL OF THE ENTRIES OF CASH DEPOSITS IN ITA NO.192/AGR/2007 A.Y. 2000-01 . 39 BANK STATEMENT AND REPLY OF D.K. AGARWAL IT WAS CLE AR THAT THE TRANSACTION WAS UNACCOUNTED MONEY INTRODUCED BY THOSE PERSONS WHO H AVE BEEN BENEFITED BY THE TRUST BY RECEIVING GIFTS AND MANAK CHAND GARG, THE ASSESSEE, IS ONE OF THEM WHO INTRODUCED HIS UNACCOUNTED MONEY IN THE GARB OF GIF T THROUGH A DONOR WHICH IS NOT A GENUINE GIFT. ON THE COST OF REPETITION, WE WOUL D LIKE REPRODUCE THE REASONS RECORDED FOR REOPENING OF THE CASE WHICH IS SELF EX PLANATORY TO THE SITUATION IN THIS REGARDS, READS AS UNDER:- FOLLOWING REASONS WERE RECORDED BY THE AO FOR MA KING RE-ASSESSMENT : INFORMATION HAS BEEN RECEIVED VIDE LETTER F.NO.ADD L.CIT/R- 4/SUVEY/2004-05 OF THE ADL. CIT, RANGE-4, AGRA DATE D 28.3.2005 THAT A SURVEY U/S. 133A WAS CONDUCTED ON 22.4.2001 AT TH E OFFICE PREMISE OF SHRI D.K. AGARWAL, CA, 245, MADHAV KUNJ, PRATAP NAGAR, AGRA. THE SURVEY PARTY HAS REPORTED THAT AS MANY AS 292 T RUSTS AND THEIR FUNDS ARE CONTROLLED BY SHRI D.K. AGARWAL. THESE TR USTS MOSTLY SHOW THEIR ADDRESSES AT 245-MADHAV KUNJ, 51/46-A, MADHAV KUNJ OR 41/67, LOHAR GALI, AGRA SHRI D.K. AGARWAL HAS BEEN CREATIN G BOGUS TRUST IN THE NAME OF GOD/GODDESSES OF WHICH HE OR HIS FAMILY MEMBERS AND HIS OTHER ASSOCIATES ARE TRUSTEES. THESE TRUSTS DO NOT CONDUCT ANY BUSINESS BUT LARGE RECEIPT OF MONEY IS SHOWN IN THE HANDS OF TRUST BY WAY OF GIFT BUSINESS PROFIT, DONATION ETC. THE TRU ST HAVE RECEIVED GIFT IN CASH FROM OTHER TRUST AND THESE TRUSTS HAVE GIVE N GIFT TO VARIOUS PERSONS. THERE IS NO RELATIONSHIP BETWEEN DONOR AND DONEE. FURTHER MORE ONE SHRI LALIT KUMAR AGARWAL ASSESSEE OF WARD 4(2), AGRA HAS STATED THAT SHRI D.K. AGARWAL HAS CR EATED BOGUS TRUST IN THE NAME OF LALIT KUMR AGARWAL AND THAT ALTHOUGH HE HAS BEEN SHOWN AS TRUSTEE, HE HAS NO KNOWLEDGE OF THE ACTIVI TIES OF THE TRUST. THE CIT(A)-II, AGRA HAS ALSO GIVEN HIS FINDING IN T HE CASES OF THE TRUSTEES VISHNU BHAGWAN AGARWAL, SMT. KUSUM KUMARI, SHRI RAVINDER KUMAR, SHRI RADHA BALLABH & D.K. AGARWAL, SHRI SHITAL PRASAD JAIN THAT M/S. VISHNU BHAGWAN (P) FAMILY TRU ST ARE BOGUS TRUSTS AND THE INCOME SHOWN IN THE HANDS OF TRUST A CTUALLY BELONGS IN ITA NO.192/AGR/2007 A.Y. 2000-01 . 40 TRUSTEE VIDE HIS APPELLATE ORDER DATED 8/9.7.2004. ALL THESE TRUSTS ARE ACTUALLY MANAGED AND CONTROLLED BY SHRI D.K. AGARWA L, CA. IT HAS ALSO BEEN INFORMED THAT ANNEXURE-II OF SEIZE D MATERIAL DURING THE SURVEY SHOWS THAT ONE OF THE TRUST NARMA DA BENEFIT TRUST, 31/67, LOHAR GALI, AGRA IS ALSO MANAGED AND CONTROL LED BY SHRI D. K. AGARWAL, CA HAS GIVEN GIFT OF RS.1,00,000/- ON 25.0 8.1999 TO THE ABOVE NAMED ASSESSEE. IN VIEW OF THE ABOVE, IT IS CLEAR THAT SHRI D. K. A GARWAL HAS BEEN CREATING BOGUS TRUSTS WHICH ARE INVOLVED IN GI VING ENTRY OF GIFTS. AS PER INFORMATION RECEIVED THESE GIFTS HAVE BEEN FOUND TO BE UNACCOUNTED MONEY OF THE BENEFICIARIES THEMSELVES. I HAVE THEREFORE, REASONS TO BELIEVE THAT INCOME TO THE TU NE OF RS.1,00,000/- HAS ESCAPED ASSESSMENT IN THE CASE OF SHRI MANIK CH AND GARG S/O. SHRI LAXMI NARAIN GARG, B-12, NATRAJPURAM, KAMLA NA GAR, AGRA FOR AY 2000-01 TO ISSUE NOTICE U/S. 148. (LETTERS BOLD AND UNDER LINED BY US) 16. EVEN OTHERWISE ALSO, WE FIND THAT THE ASSESSEE HAS FAILED TO PROVE THE OCCASION AS WELL AS THE RELATION THAT HOW THE ASSES SEE HAS PASSED THE CONSIDERATION IN THE FORM OF LOVE AND AFFECTION TO THE DONORS AGA INST THE AMOUNT GIFTED. 17. THE ASSESSEE HAS RELIED UPON VARIOUS DECISIONS WHICH ARE ON RECORD. AFTER PERUSAL OF THOSE DECISIONS WE NOTICE THAT THE ISSUE UNDER CONSIDERATION CANNOT BE SAID TO BE COVERED BY THOSE DECISIONS AS THOSE DECI SIONS HAVE BEEN DECIDED AFTER CONSIDERING THE FACTS OF THE RESPECTIVE CASES. FAC TS OF THOSE CASES ARE NOT SIMILAR TO THE FACTS OF THE CASE UNDER CONSIDERATION. THUS, T HOSE DECISIONS DO NOT HELP THE ASSESSEE. ITA NO.192/AGR/2007 A.Y. 2000-01 . 41 18. ON THE BASIS OF ABOVE DISCUSSION, WE ARE OF THE CONSIDERED VIEW THAT THE GIFTS WERE NOT GENUINE GIFTS EVEN AFTER CONSIDERING DOCUM ENTS WHICH HAVE BEEN POINTED OUT IN THE M.A. ORDER OF THE I.T.A.T. THUS, THE OR DER OF THE CIT(A) ON THE ISSUE IS CONFIRMED. 19. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND CHALLENGING JURISDICTION UNDER SECTION 147 ON THE GROUND THAT THE REASONS RECORDED WITH REGARD TO ESCAPEMENT OF INCOME ARE NOT SPECIFIC BUT ARE GENERAL IN NATURE. IN THIS REGARDS THE ASSESSEE DID NOT POINT OUT ANY MISTAKE IN THE ORIGINAL ORDER OF THE I.T.A.T. IF WE READ THE M.A. ORDER IN THE LIGHT OF SECTION 254(2) OF THE ACT WHI CH PROVIDES POWER TO ITAT TO AMEND THE ORDER WITH A VIEW TO RECTIFYING ANY MISTA KE APPARENT FROM THE RECORD, PASSED BY IT UNDER SUB-SECTION (1), WE DO NOT FIND ANY REASON TO DISTURB THE ORIGINAL FINDING OF THE I.T.A.T. ON THE ISSUE AS STATED ABOV E THAT NEITHER ANY MISTAKE IN THIS REGARD HAS BEEN POINTED OUT BY THE LD. A.R. AT THE TIME OF HEARING BEFORE US NOR SUCH MISTAKE HAS BEEN POINTED IN M.A. ORDER BY THE TRIBUNAL. IN ORIGINAL ORDER THE I.T.A.T. HELD THAT THE REASONS RECORDED BY THE A.O. WERE VERY CLEAR THAT THE REASONS WITH REGARD TO ESCAPEMENT OF INCOME QUA ALL EGED GIFT OF RS.L,00,000/-, GIVEN BY SMT. NEELAM KUMARI THROUGH CHEQUE NO.86443 9 DRAWN ON A PARTICULAR BANK IS DEFINITELY A SPECIFIC AND NOT A GENERAL INF ORMATION. THEREFORE, IT WAS HELD THAT THE GROUND IS NOT MAINTAINABLE AND IS, THEREFO RE, DISMISSED. SIMILAR IS THE ITA NO.192/AGR/2007 A.Y. 2000-01 . 42 POSITION REGARDING APPLICATION OF SECTION 68 OF THE ACT RAISED IN ADDITIONAL GROUND AT THE TIME OF ORIGINAL HEARING OF THE APPEAL. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 8 TH JUNE, 2012 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT RESPONDENT CIT CONCERNED CIT (APPEALS) CONCERNED D.R., ITAT AGRA BENCH, AGRA GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY