MRS. ASHA M. AGARWAL, MUMBAI V. THE ITO WD 24(1), MUMBAI

ITA 400/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1579 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 05-05-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 17-01-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KESHAVE SAXENA
• Assessee Lawyers: PRADIP KEDIA
• Keywords: Gift; Question of law
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI. BEFORE SHRI A L GEHLOT (ACCOUNTANT MEMBER) & SHRI V D RAO (JUDICIAL MEMBER) I.T.A. NO.400/MUM/2008 (ASSESSMENT YEAR: 2004-05) MRS. ASHA M. AGARWAL 9 TH FLOOR, KANTA APARTMENT, SHARADCHAND CHATTERJEE MARG, SANTACRUZ (WEST), MUMBAI 400 054 PAN NO.: - ACWPG 7133 L VS. INCOME TAX OFFICER, WARD 24(1), PRATYAKSH KAR BHAWAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI 400 051 APPELLANT RESPONDENT ASSESSEE BY : SHRI PRADIP KEDIA DEPARTMENT BY : SHRI KESHAVE SAXENA ORDER PER A L GEHLOT (AM) THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-XXIV, MUMBAI, DATED 19.10.2007, RELATING TO THE ASSESSMENT YEAR 2004-05. 2. THE EFFECTIVE GROUNDS OF APPEAL RAISED BY THE AS SESSEE READS AS UNDER: - 1) THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONFIR MING THE ORDER OF THE ASSESSING OFFICER BY TREATING GENUINE GIFT OF RS.30,00,000/- RECEIVED FROM MRS. CHANDRA HINGORANI AS NON- GENUINE AND UPHOLDING THE ADDITION U/S.68 OF THE IN COME TAX ACT. ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 2 2) THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONCLUD ING THAT THE DONOR AND DONEE WERE STRANGERS, NOT REMOTELY CO NNECTED AND THE ELEMENT OF NATURAL LOVE AND AFFECTION WAS M ISSING IN THE CASE. 3) THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONCLUD ING THAT APPELLANT FAILED TO PROVE THAT THE GIFT WAS GENUINE FOR NATURAL LOVE AND AFFECTION. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE RE CEIVED A GIFT OF RS.30,00,000/- FROM MRS. CHANDRA HINGORANI. THE GEN UINENESS OF THE GIFT WAS EXAMINED BY THE ASSESSING OFFICER BY CONSI DERING THE VARIOUS DOCUMENTS INCLUDING TAKING STATEMENTS OF THE ASSESS EE WHICH WAS RECORDED ON 19.12.2006. THE ASSESSING OFFICER HAS R EPRODUCED THE QUESTION AND ANSWER REPLIED BY THE ASSESSEE IN THE STATEMENT AT PAGE 2 & 3 OF THE ASSESSMENT ORDER. THE SAME IS REPRODUCED BELOW: - Q.1. PLEASE STATE HOW MANY GIFTS YOU HAVE MADE DUR ING YOUR LIFE? ANS. NO, I HAVE NOT MADE ANY GIFTS AT ANY STAGE OF MY LIFE. Q.2. HAVE YOU RECEIVED ANY GIFTS, IF SO PLEASE INT IMATE THE DETAILS? ANS. I DO NOT REMEMBER HAVING RECEIVED ANY GIFTS I N MY LIFE OR AFTER MY MARRIAGE, EXCEPT ONE GIFT OF RS.30,00,000/- RECE IVED FROM ONE MRS.CHANDRA HINGORANI. HOWEVER, I DO NOT KNOW H ER EXACT ADDRESS OF THE HOUSE, BUT SHE LIVES IN HER OW N HOUSE AT PALI HILL, BANDRA (WEST). SHE IS ABOUT 83 YEARS OLD AND IS WIDOW OF LATE SHRI NANAK BHAI. HER HUSBAND WAS FRIE ND OF MY FATHER AND IS WIDOW OF LATE SHRI NANAK BHAI. HER HUSBAND WAS FRIEND OF MY FATHER LATE SHRI MUNSHIRAM GUPTA. I HAVE VISITED HER HOUSE IN PALI HILL, ONLY WHEN I WAS 7 O R 8 YEARS OLD. THEREAFTER, I NEVER VISITED HER AND THEY ALSO NEVER VISITED OUR HOUSE, EXCEPT WHEN MY FATHER EXPIRED IN MARCH, 1996. Q.3. PLEASE TELL ABOUT THE DONOR SMT. CHANDRA HING ORANI? ANS. SHE IS OF FAIR COLOUR, 5FT 4 INCHES APPROX, 8 3 YEARS OLD WITH WELL BUILT BODY. I DO NOT KNOW HER TELEPHONE NUMBER S, ADDRESS, HER BUSINESS INTERESTS, THE BUSINESS/ PROF ESSION OF HER CHILDREN. I DO NOT KNOW ABOUT THE CHILDREN SHE HAS. I DO ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 3 NOT KNOW THEIR NAMES. I HAVE NEVER VISITED THEIR FA MILIES EVEN ON THE MARRIAGES OF HER 4 SONS OR FOR THAT MATTER E VEN ON FAMILY FUNCTIONS LIKE BIRTHDAYS, ETC, AS I WAS NEVE R INVITED, NOR WE WERE INVITING THEM FOR SUCH SOCIAL GET TOGET HERS. Q.4. PLEASE TELL ME ABOUT HER HUSBAND MR. HINGORAN I? ANS. HE IS NO MORE. HE EXPIRED 6 TO 7 YEARS BACK. HE WAS FAIR, WELL BUILT, 5FT 10 INCHES, HOWEVER, CANNOT EXPLAIN ANYTH ING ABOUT HIM AS I NEVER MET HIM. Q.5. WHAT WAS THE OCCASION OF MAKING GIFTS TO YOU AND HOW THE OFFER WAS MADE? ANS. SMT.CHANDRA HINGORANI OFFERED THE GIFT SUO-MO TO TO MY MOTHER, WHO IN TURN HAD A TALK WITH MY HUSBAND AND FINALLY THE GIFT WAS MADE BY HER BY CHEQUES. I HAD MY SECON D BABY ON 2 ND FEB., 2003. MY MOTHER INFORMED THIS TO SMT. CHANDR A HINGORANI WHO OFFERED THE GIFT ON THIS OCCASION IN MARCH, 2003. IN FACT SHE IS A WELL OFF LADY AND WANTED TO MAKE THIS GIFT OUT OF LOVE AND AFFECTION FOR OUR FAMILY. Q.6. WHEN YOU DO NOT HAVE ANY INTERACTION WITH SMT . CHANDRA HINGORANI ALMOST FOR 26 YEARS NOW AND SHE HAS HER O WN SONS AND GRAND SONS, HOW IS IT THAT SHE HAS MADE SUCH A HUGE GIFT TO YOU WITHOUT ANY APPARENT CONSIDERATION OR LOVE A ND AFFECTION FOR YOU AND YOUR FAMILY MEMBERS AND THAT TOO WHEN YOU CLAIMED THAT YOU HAVE NEVER VISITED HER HOUSE A ND YOU AND YOUR PARENTS HAVE NO SOCIAL LINK WITH THEM AS N ONE OF YOU MADE ANY GIFTS TO HER OR HER FAMILY EVEN ON THE MAR RIAGES OF HER 4 SONS AND ON BIRTHDAYS AND OTHER SOCIAL FUNCTI ONS OF HER GRAND CHILDREN? ANS. WHATEVER GIFT IF ANY MADE TO THE FAMILY OF TH E DONOR WERE MADE BY MY PARENTS WITHOUT MY KNOWLEDGE, HOWEVER I CONFIRM THAT I HAVE NEVER VISITED DONORS HOUSE, HER CHILDREN NOR HAVE I ATTENDED ANY FUNCTION IN HER FAMILY. I H AVE NEVER GIVEN ANY GIFTS TO HER AND HER FAMILY MEMBERS. AND I DO NOT KNOW ABOUT ANY GIFTS MADE BY MY PARENTS. Q.7. DID THE DONOR EVER VISIT YOU OR YOUR FAMILY A T ANY SOCIAL OCCASION? ANS. NO. NO GIFTS WERE RECEIVED FROM HER FAMILY. Q.8. WHAT WAS THE MODE OF RECEIPT OF GIFT MADE BY YOU? ANS. THE GIFT WAS RECEIVED THROUGH CHEQUES. HOWEVE R, I DO NOT KNOW THE NAME OF THE BANK, MY BANK ACCOUNT NUMBER O R MY ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 4 BANK. MY HUSBAND SHRI MUKUL AGARWAL RECEIVED THE CH EQUES OF GIFT. I DO NOT KNOW WHERE HE DEPOSITED THE CHEQU ES AND HOW HE IS UTILIZING THE GIFT IS ALSO NOT KNOWN TO M E. Q.9. WHEN YOU AND YOUR FAMILY HAVE SUCH LIMITED RE LATIONSHIP WITH SMT.CHANDRA HINGORANI AND YOU AND YOUR FAMILY HAVE NEVER GIVEN SUCH A BIG AMOUNT OF GIFT TO HER FAMILY, HOW IS IT THAT SHE GAVE YOU A GIFT OF RS.30 LACS WITHOUT ANY CONSIDERA TION, REASON, OCCASION OR RECIPROCAL LOVE AND AFFECTION? ANS. THE DONOR TOLD MY MOTHER ON THE OCCASION OF B IRTH OF MY SECOND BABY THAT SHE HAD BEEN ADVISED BY HER LATE H USBAND TO GIVE SOMETHING TO OUR FAMILY OUT OF LOVE AND AFF ECTION AND SHE FULFILLED HIS LAST WISH. I BELIEVE IT TO BE MY DESTINY THROUGH MY DAUGHTER THAT WHAT MY FATHER COULD NOT GIVE TO M E AT THE TIME OF MARRIAGE, I HAVE BEEN BLESSED BY MY FATHER S FRIEND THROUGH HIS LAST WISH. Q.10. YOU HAVE PURCHASED A FLAT. DID YOU REQUIRE T HE WHITE MONEY FOR PAYMENT OF THE FLAT, HAD YOU ARRANGED THE MONEY AS GIFT? FROM YOUR RETURN FILED FOR 2005-06 IT IS CLEAR THAT YOU HAVE SHOWN FLAT INVESTMENT AT 13.67 LAKHS AND ANOTHER FL AT COST FOR RS.96 LAKHS. ANS. NO. 4. ON THE BASIS OF THE ABOVE STATEMENT THE AO NOTIC ED THAT THE ASSESSEE IS NOT REMOTELY CONNECTED WITH THE FAMILY OF THE DONOR. SHE HAS NO KNOWLEDGE ABOUT THE FAMILY OF THE DONOR, SHE NEV ER VISITED THEIR HOUSE. SHE NEVER ATTENDED ANY SOCIAL FUNCTION OR NO RMAL GET TOGETHER WITH THE FAMILY OF THE DONOR. SHE WAS NEVER INVITED BY THE DONOR FAMILY AND THE SAME WAS THE CASE WITH THE ASSESSEE AS THE DONOR FAMILY HAD NO LINK WHATSOEVER WITH THE ASSESSEE. IT HAS ALSO BEIN G NOTED BY THE ASSESSING OFFICER THAT MRS. CHANDRA HINGORANI, THE ALLEGED DONOR WAS REQUIRED TO BE PRODUCED. INSTEAD OF ATTENDING SHE P REFERRED TO FILE LETTER AT THE RECEIPT COUNTER ON 29.11.2006. THE DETAILS F ILED ALONG WITH THE SAID LETTER BY MRS. CHANDRA HINGORANI BEFORE THE AO. THE OBSERVATION OF THE ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 5 ASSESSING OFFICER THEREON NOTED BY THE ASSESSING OF FICERS IN HIS ORDER READS AS UNDER: - THEREBY FILING THE DETAILS OF HER I.T. RETURNS WHE RE THE GIFTS HAD BEEN DISCLOSED. THE DONOR PLEADED THAT DUE TO H ER OLD AGE SHE COULD NOT TRAVEL. IT IS RELEVANT TO MENTION HER E THAT AS PER COPY OF THE I.T. RETURN FILED, SHE HAS DECLARED THA T SHE IS PROPRIETOR OF M/S. INTERNATIONAL EXPORT CORPORATION AND THE SALES WERE DECLARED AT RS.20,75,000/-. THESE FACTS COUPLED WITH THE FACTS THAT THE DONOR HAS DECLARED THE INCO ME OF ABOUT RS.64 LAKHS FROM INTEREST, DIVIDEND AND GAINS ON SA LES OF INVESTMENT (RS.48.67 LAKHS) CONCLUSIVELY PROVES THA T THE DONOR WAS SIMPLY AVOIDING TO ATTEND THE PROCEEDINGS TO AV OID THE TRUTH TO COME OUT. A PERSON RUNNING A BUSINESS, MAK ING SALES OF RS.20 LAKHS AND EARNING OTHER INCOME OF RS.64 LA KHS CANNOT CLAIM EXEMPTION ON THE GROUND OF OLD AGE SPE CIALLY WHEN SHE IS LIVING IN BANDRA (WEST) AND THE INCOME- TAX OFFICE IS LOCATED AT BANDRA (EAST). IT IS RELEVANT TO MENTION HERE THAT MRS. CHANDRA HI NGORANI IS NOT IN ANY WAY CONNECTED TO THE ASSESSEE OR TO HER FAMILY. THERE WAS NO OCCASION FOR SUCH HUGE GIFTS TO THE AS SESSEE. THE DONOR HAS SIMPLY MADE LAME EXCUSE NOT TO ATTEND PROCEEDINGS. THE APPARENT IS THAT ONLY FAKE DOCUMEN TS OF GIFT WERE PREPARED ON CONSIDERATION AND, THE DONOR AND T HE DONEE IS AVOIDING THE TRUTH TO COME OUT AND ARE ACCORDING LY AVOIDING THE PRESENCE. I HAVE, THEREFORE, NO ALTERNATIVE BUT TO CONCLUDE T HAT THIS IS A CASE OF BOGUS GIFTS AND THE ASSESSEE HAS INTRODUCED HER CONCEALED INCOME IN THE FORM OF ALLEGED GIFT FROM A NY UNKNOWN LADY, WHO IS NOT IN ANY WAY CONNECTED WITH THE ASSE SSEE AND WHO IS ALSO NOW AVOIDING TO ATTEND THE INCOME-TAX PROCEEDINGS TO AVOID THE TRUTH TO COME OUT. ACCORDI NGLY, THE AMOUNT OF GIFT OF RS.30,00,000/- IS ADDED TO THE IN COME OF THE ASSESSEE AS UNDISCLOSED INCOME OF THE ASSESSEE AND PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME ARE INITIATED SEPARATELY. 5. THE ADDITION MADE BY THE ASSESSING OFFICER HAS B EEN CONFIRMED BY THE CIT(A) RELYING ON THE JUDGMENT OF HONBLE SUPRE ME COURT IN THE CASE ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 6 OF CIT VS. P. MOHANAKALA (2007) 291 ITR 278 (SC) AN D THE JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF JASPAL SINGH VS. CIT (2007) 290 ITR 306 (P&H). THE CIT(A) HELD THAT THE ASSESSEE FAILED TO PROVE THAT THE GIFT WAS GENUINE . 6. THE LEARNED AUTHORISED REPRESENTATIVE POINTED TH AT MRS. CHANDRA HINGORANI WAS THE FAMILY FRIEND OF THE ASSESSEE; SH E GAVE GIFT OUT OF LOVE AND AFFECTION. SHE IS 83 YEARS OLD LADY. THERE WAS NO DOUBT ON THE GENUINENESS OF HER AND IDENTITY AND CAPACITY TO GIV E THE GIFT, WHICH WAS GIVEN THROUGH BANKING CHANNEL AS WAS GIVEN DULY CON FIRMED BY THE DONOR. 7. THE LEARNED AR IN SUPPORT OF ITS CONTENTIONS REF ERRED TO THE VARIOUS PAGES OF THE PAPER BOOK; VIZ. COPY OF THE B ANK ACCOUNT OF THE DONOR WHICH HAS BEEN PLACED AT PAGE 10 OF THE PAPER BOOK, COPY OF THE RETURN FILED AT PAGE 5 OF THE PAPER BOOK, COPY OF D EED OF GIFT DECLARATION AT PAGE 1 TO 3 OF THE PAPER BOOK AND WHILE REFERRING P AGE 9 OF THE ASSESSEES PAPER BOOK WHERE THE CAPITAL ACCOUNT OF INTERNATION AL EXPORTS CORPORATION FOR YEAR ENDED 31 ST MARCH, 2004 IS PLACED LD. AR POINTED OUT THAT THE GIFT GIVEN BY MRS. CHANDRA HINGORANI HAVE BEEN DEBITED AS GIFT A/C. IN HER CAPITAL A/C. 8. THE LD. AR SUBMITTED THAT THE GIFT DEED IS SIGNE D BY THE DONOR ON OATH AND IN CASE OF ANY FALSITY LIABLE TO PERJURY UNDER IPC. THE AO HAS OVER LOOKED THE FACT , THAT DONORS HUSBAND WAS FRI END OF ASSESSEE FATHER. TO FULFILL LAST WISH OF HER HUSBAND, THE DO NOR HAS OFFERED GIFT TO MOTHER OF THE ASSESSEE WHICH ULTIMATELY DEVOLVED TO THE ASSESSEE. THE LD. AR REFERRED TO QUESTION 9 OF THE STATEMENTS OF THE ASSESSEE AND SUBMITTED THAT THE GIFT ROSE OUT OF LOVE AND AFFECT ION AND SENTIMENTS. HE ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 7 SUBMITTED THAT THE DONOR IS 83 YEARS OLD AND FURNIS HED ALL RELEVANT MATERIAL PARTICULARLY LIKE BANK STATEMENT, RETURN F ILED, DEED OF GIFT, ETC. LD. AR SUBMITTED THAT THE NETWORTH OF DONOR WAS 6.8 7 CRORES EVEN AFTER GIVING GIFT OF RS.30,00,000/-. THE LD. AR SUBMITTED THAT THE ADVANCE TAX ON 30 LACS ON 21.03.2003 AND THE CAPACITY OF THE GI FT GIVEN IS A MAJOR. HE SUBMITTED THAT THE GIFT WAS GIVEN AT THE TIME IN TH E CASE OF SECOND BABY OF THE ASSESSEE ON 2 ND FEB., 2003. 9. THE LD. AR SUBMITTED THAT ASSESSEE HERSELF HAS D ECLARED SUBSTANTIAL TAXABLE INCOME OF RS.28.71 LACS. THERE NO ALLEGATION OF GENERATION OF CASH. NO ALLEGATION THAT THE ALLEGED CASH HAS BEEN GIVEN TO DONOR IN RETURN. HE SUBMITTED THAT WITHOUT CONSIDER ING THE FACTS NAMELY THE ASSESSING OFFICER HELD THAT THE GIFT IS UNPROVE D WHILE REFERRING PAGE 11 OF THE PAPER BOOK. LD. AR SUBMITTED THAT THE DON OR REITERATED THAT THE DONOR IS FAMILY FRIEND OF THE ASSESSEE. THE LD. AR SUBMITTED CLOSE RELATIONSHIP AND OCCASION IS NOT LEGALLY NECESSARY. LD. AR SUPPORTED ON HIS CONTENTIONS RELIED ON THE DECISION OF ITAT, CHA NDIGARH BENCH IN THE CASE OF R.K. SYAL VS. CIT REPORTED IN 66 TTJ 656, R.S. SIBAL 269 ITR 429 (DEL.) AND MURLIDHAR LAHORIMAL 280 ITR 512. 10. LD. AR FURTHER SUBMITTED THAT INSTANCES ARE NOT RARE, WHEN EVEN STRANGERS MAKE GIFTS OUT OF VERY MANY CONSIDERATION S, INCLUDING ARISING OUT OF LOVE, AFFECTION AND SENTIMENTS. THE LD. AR R ELIED ON THE DECISION OF RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. PADAM S INGH CHOUHAN REPORTED IN 215 CTR 303 (RAJ.). IT IS ALSO SUBMISSI ONS OF LD. AR THAT THE OPINION WAS SAME OF LOVE AND AFFECTION AND THE MATE RIAL AVAILABLE ON RECORD. LD. AR ON SUPPORT OF ITS CONTENTION RELIED UPON THE DECISION OF KANCHAN SINGH 221 CTR 456 (ALL.). HE SUBMITTED THAT BALD JUSTIFICATION IS NOT SUSTAINABLE. HE RELIED UPON CIT VS. GANGAUR INVESTMENT LTD. LD. ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 8 AR SUBMITTED THAT THE DONOR HAD COMPENSATED IN CASH OR ON KIND IS A MERE CONJECTURE AND SURMISE IN ABSENCE OF SPECIFIC EVIDENCE. LD. AR SUPPORTED ITS CONTENTIONS RELIED ON THE DECISION IN THE CASE OF R.K. SYAL VS. CIT (SUPRA). HE FURTHER SUBMITTED THAT UNDER SE CTION 68, THE EXPLANATION OF THE ASSESSEE HAS TO BE ONLY SATISFAC TORY AS AGAINST REQUIREMENT OF DEMONSTRATIVE OR INFALLIBLE PROOF. H E RELIED ON MALHOTRA JEWELLERS 47 TTJ 354 (DEL.) AND ON THE ORDER OF THE HONBLE ITAT, MUMBAI IN THE CASE OF ASHA HAMPANNAWAR VS. ITO WHIC H IS CONFIRMED BY THE HONBLE BOMBAY HIGH COURT AND THE SLP AGAINST T HE ORDER OF THE HIGH COURT HAS BEEN DISMISSED BY THE APEX COURT. 11. THE LD DR ON THE OTHER HAND RELIED UPON THE ASS ESSEE AND RELIED UPON THE AUTHORITIES BELOW. THE ASSESSEE HAS FAILED TO PROVE THAT THE GIFT WAS GIVEN OUT OF LOVE AND AFFECTION. THE DR REFERRE D TO THE VARIOUS QUESTION AND ANSWERS OF THE STATEMENT OF THE ASSESS EE RECORDED BY THE ASSESSING OFFICER. THE LD. DR SUBMITTED THAT THE CIT HAS RIGHTLY RELIED ON THE DECISION OF P. MOHANKALA 291 ITR 278 (SC). I T IS ALSO THE SUBMISSIONS OF THE LD DR THAT PROOF IS ON THE ASSES SEE ON SUCH CASES, SINCE THE ASSESSEE HAS FAILED TO PROVE GENUINENESS OF THE GIFT THEREFORE THE ASSESSING OFFICER HAS RIGHTLY MADE ADDITION. 12 WE HAVE HEARD LEARNED REPRESENTATIVES OF THE PARTIES PERUSED THE RECORD AND GONE THROUGH THE DECISIONS CITED AND REF ERRED. IN THE CASE UNDER CONSIDERATION THE ISSUE IS IN RESPECT OF GIFT OF RS 30/- LAKH. THE ORDINARY MEANING OF THE GIFT IS A TRANSFER BY ONE P ERSON TO ANOTHER OF ANY EXISTING MOVABLE OR IMMOVABLE PROPERTY MADE VOLUNTA RILY OR WITHOUT CONSIDERATION OF MONEY OR MONEY WORTH. IN LEGAL EFF ECT, THERE CANNOT BE A GIFT WITHOUT A GIVING AND TAKING. THE GIVING AND TAKING ARE THE TWO CONTEMPORANEOUS RECIPROCAL ACTS WHICH CONSTITUTE A GIFT. IN ORDER TO ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 9 MAKE A VALID GIFT, THERE MUST BE PERFECT KNOWLEDGE IN THE MIND OF THE PERSON MAKING THE GIFT OF THE EXTENT OF THE BENEFIC IAL INTEREST INTENDED TO BE CONFERRED, AND OF WHICH MAKING IT. DONOR GIVES G IFT IN MONEY OR MONEYS WORTH AND TAKING LOVE AND AFFECTION FROM DO NEE. TO EXAMINE THE ISSUE FROM POINT OF VIEW OF THE PROVISIONS OF INCOM E TAX ACT WE ARE TO SEE THE NATURE OF THE TRANSACTION. GIFT, ITS NATURE IS CREDIT IN THE HANDS OF THE DONEE BECAUSE DONEE CREDITED GIFT AMOUNT HIS/HER CA PITAL ACCOUNT AND BEING TREATED AS OWN MONEY/CAPITAL. NORMALLY SUCH C REDIT ENTRY IN CAPITAL ACCOUNT CAN BE MADE ONLY OF THE TRANSITION WHICH HAS BEEN PROCESSED THROUGH THE PROVISIONS OF THE INCOME TAX ACT. IT APPEARS FROM READING OF SECTION 68 OF THE ACT THAT WHENEVER A SU M IS FOUND CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE THEN, IRRESPEC TIVE OF THE COLOUR OR THE NATURE OF THE SUM RECEIVED WHICH IS SOUGHT TO B E GIVEN BY THE ASSESSEE, THE INCOME-TAX OFFICER HAS THE JURISDICTI ON 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 EXPLANATION IS CORRECT OR NOT. IT IS IN THIS REGARD THAT ENQUIRIES ARE USU ALLY MADE IN ORDER TO FIND OUT AS TO WHETHER, FIRSTLY THE PERSONS FROM W HOM MONEY IS ALLEGED TO HAVE BEEN RECEIVED ACTUALLY EXISTED OR NOT. SEC ONDLY DEPENDING UPON THE FACTS OF EACH CASE, THE INCOME-TAX OFFICER MAY EVEN BE JUSTIFIED IN TRYING TO ASCERTAIN THE SOURCE OF THE DEPOSITOR, AS SUMING HE IS IDENTIFIED, IN ORDER TO DETERMINE WHETHER THAT DEPOSITOR 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 N ATURE AND SOURCE OF A SUM CREDITED IN THE BOOKS OF ACCOUNT OF AN ASSESSEE AND IT WOULD BE IMMATERIAL AS TO WHETHER THE AMOUNT SO CREDITED IS GIVEN THE COLOUR OF A LOAN OR A SUM REPRESENTING THE SALE PROCEEDS OR EVE N RECEIPT OF GIFT. THE USE OF THE WORDS ANY SUM FOUND CREDITED IN THE BO OKS IN SECTION 68 ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 10 INDICATES THAT THE SAID SECTION IS VERY WIDELY WORD ED 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 INCO ME-TAX OFFICER TO MAKE ENQUIRIES WITH REGARD TO THE NATURE AND SOURCE OF A NY OR ALL THE SUMS CREDITED IN THE BOOKS OF ACCOUNT OF THE COMPANY IRR ESPECTIVE OF THE NOMENCLATURE OR THE SOURCE INDICATED BY THE ASSESSE E. IN OTHER WORDS, THE TRUTHFULNESS OF THE ASSERTION OF THE ASSESSEE R EGARDING 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 TH E PROPOSITION THAT A MERE IDENTIFICATION OF THE DONOR AND SHOWING THE MO VEMENT OF THE GIFT AMOUNT THROUGH BANKING CHANNELS IS NOT SUFFICIENT T O PROVE THE GENUINENESS OF THE GIFT AND SINCE THE CLAIM OF A GI FT 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. THE ASS ESSEE IS REQUIRED TO PROVE THREE IMPORTANT CONDITIONS, NAMELY, (I) THE I DENTITY OF THE CREDITOR, (II) THE CAPACITY OF THE CREDITOR TO ADVANCE THE MO NEY, AND (III) THE GENUINENESS OF THE TRANSACTION. WHAT EVIDENCE WOULD BE SUFFICIENT TO ESTABLISH THE SAID CONDITIONS OR WHAT MATERIAL WOUL D BE RELEVANT IN A PARTICULAR CASE, WOULD DEPEND ON THE FACTS OF EACH CASE. THERE CANNOT BE ONE GENERAL GUIDING YARDSTICK IN THE MATTER. 12.1 THE ASSESSEE HAS FURNISHED VARIOUS TYPE O F MATERIAL/EVIDENCE IN THE FORM OF GIFT DEED, CONFIRMATION AND OTHERS, TO APPRECIATE THOSE MATERIAL/ EVIDENCES WE WOULD LIKE REFER ONE OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT V DURGA PRASAD MORE 82 IT R 540 (SC) WHEREIN THE COURT HELD THAT SCIENCE HAS NOT YET INVENTED AN Y INSTRUMENT TO TEST THE RELIABILITY OF THE EVIDENCE PLACED BEFORE A COU RT OR TRIBUNAL. THEREFORE, THE COURTS AND TRIBUNALS HAVE TO JUDGE THE EVIDENCE BEFORE THEM BY ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 11 APPLYING THE TEST OF HUMAN PROBABILITIES. IT HAS BE EN 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 APPARENT IS NOT THE REAL. IN A CAS E OF THE PRESENT KIND A PARTY WHO RELIES ON A RECITAL IN A DEED HAS TO ESTABLISH THE TRUTH OF THO SE RECITALS, OTHERWISE IT WILL BE VERY EASY TO MAKE SELF-SERVING STATEMENTS IN DOCUMENTS EITHER EXECUTE D OR TAKEN BY A PARTY AND RELY ON THOSE RECITALS. IF ALL THAT AN ASSESSEE WHO WANTS TO EVAD E 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 LITTLE PROBING WAS SUFFICIENT IN THE P RESENT CASE TO SHOW THAT THE APPARENT WAS NOT THE REAL. THE TAXING AUTHORITIES WERE NOT REQUIRED TO P UT ON BLINKERS WHILE LOOKING AT THE DOCUMENTS PRODUCED BEFORE THEM. THEY WERE ENTITLED TO LOOK IN TO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS . 12.2 WE WOULD ALSO LIKE REFER ONE MORE JUDGMENT OF THE APEX COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. P MOHANAKALA 291 ITR 278 (SC) IN THIS CASE FOLLOWING QUESTIONS HAV E BEEN ANSWERED BY THE HIGH COURT IN FAVOUR OF THE ASSESSEES AND AGAI NST THE REVENUE : (A) WHETHER, IN THE FACTS AND CIRCUMSTANCES, THE INCOME-TAX APPELLATE TRIBUNAL WAS CORRECT IN LAW TO ACCEPT THE PRINCIPLE OF PREPONDERANCE OF PROBABILITIES IN HOLDING THAT THE CLAIM OF THE APPE LLANT THAT THE SUM OF RS. 15,62,500 RECEIVED HIM BY WAY OF GIFTS THROUGH NORMAL BANKING CHANNELS WAS NOT GENUINE AND THAT IT WAS LIABLE TO BE ASSESSED UNDER 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 I NCOME-TAX APPELLANT TRIBUNAL IS LEGALLY JUSTIFIED IN CONCLUDING THAT BU RDEN OF PROOF CAST ON THE APPELLANT UNDER SECTION 68 OF THE INCOME-TAX AC T, 1961 HAS NOT BEEN DISCHARGED AND THE INGREDIENTS FOR INVOKING SECTION 68 OF THE INCOME-TAX ACT ARE PRESENT ? ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 12 (C) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CONCLUSION OF THE TRIBUNAL THAT THE CLAIM OF GIFT IS NOT GENUINE IS REA SONABLE AND BASED ON RELEVANT MATERIAL AND NOT PERVERSE ? THE DISPUTE IN ALL THESE APPEALS RELATES TO THE A DDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF SEVERAL FOREIGN GIF TS STATED TO HAVE BEEN RECEIVED BY THE ASSESSEES FROM ONE COMMON DONOR NAM ELY SAMPATH KUMAR. THE GIFTS RECEIVED WERE FROM ONE ARIAVAN THO TAN AND SUPROTOMAN. IT IS DURING THE ENQUIRY BY THE REVENU E 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 A ND SMT. MOHANAKALA.IN ALL THE AGGREGATE GIFTS RECEIVED BY T HE ASSESSEES IS TO THE EXTENT OF RS.1,79,27,703. THE ASSESSING OFFICER DI D NOT ACCEPT THE EXPLANATION OFFERED BY THE RESPECTIVE ASSESSEES TH AT THE AMOUNT OF CREDIT IS A GIFT FROM NRI AND PROCEEDED TO ADD IT 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 F OREIGN BANK AND CREDITED 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. SINGAPORE. THE ASSESSING OFFICER DEA LT WITH THE CONTROVERSY AS REGARDS THE CASH CREDIT ENTRIES RECE IVED FROM THE FOREIGN DONOR. HE NOTICED THAT THE GIFTS HAVE BEEN SENT IN THE NAME OF ARIAVAN THOTTAN AND RECEIVED BY A. SRIN IVASAN AND OTHERS W HO ARE ALL HIS FAMILY MEMBERS. EACH ONE OF THEM IS AN INDIVIDUAL ASSESSE E. ALL THE ASSESSEES WERE SUMMONED AND THEIR STATEMENTS HAVE BEEN RECOR DED BY THE ASSESSING OFFICER. SRINIVASAN WHO IS THE KEY PERSON IN HIS STATEMENT SAID THAT HE KNEW SAMPATHKUMAR FOR THE LAST 20 YEAR S AND HE HAD BEEN HELPING SAMPATHKUMAR PRIOR TO 1985 BY PAYING RS. 10 0 TO 200 EVERY ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 13 MONTH AS HE HAD NO SOURCE OF INCOME TO GET HIMSELF EDUCATED. SAMPATHKUMAR IN HIS OWN STATEMENT STATED THAT HE WA S IN INDONESIA UP TO THE YEAR 1992 AND EMPLOYED AS AN ENGINEER. THER EAFTER, HE SHIFTED TO ENGLAND AND STARTED CONSULTANCY PROFESSION THERE. LATER IN THE END OF THE YEAR 1994-95, HE JOINED NEW CENTURY MACHINERY LTD., CHESHIRE, SK 16 4XS AND BECAME ITS DIRECTOR IN 1996. IT IS IN H IS STATEMENT THAT HE IS PAYING TAXES IN ENGLAND FROM HIS INCOME EARNED IN ENGLAND. AS FAR AS HIS INDIAN INCOME IS CONCERNED, HE STATED THAT HE F ILED THE RETURNS FOR THE ASSESSMENT YEARS 1996-97 AND 1997-98 BEFORE THE IN COME-TAX OFFICER, WARD 1(4), CBE ONLY ON OCTOBER 23, 1997. HIS INVEST MENT IN INDIAN COMPANIES ACCORDING TO HIM WILL BE AROUND RS. 5 CR ORES 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 WOU LD BE SUBMITTING THE DETAILS THROUGH HIS AUDITOR WHICH HE DID NOT. EXCEP T THE SELF SERVING STATEMENT THERE IS NO MATERIAL EVIDENCE AS REGARDS HIS FINANCIAL STATUS. HE STATED FROM 1972-73 HE KNEW SRINIVASAN, RAJENDRA N AND THEIR FAMILIES. HIS FATHER WAS A TAXI DRIVER, AND WAS VER Y POOR. SRINIVASAN AND HIS FAMILY MEMBERS WERE SUPPORTING HIM WHEN HE WAS IN INDIA. TO A POINTED QUERY AS TO WHETHER THERE IS ANY EVIDENCE T O SHOW THAT HE WAS ALSO KNOWN BY ANY OTHER NAME OTHER THAN SAMPATHKUMA R, HE STATED THAT NO EVIDENCE. ONLY MR. SRINIVASAN USED TO CALL ME A S SUPROTOMAN. THE ASSESSING OFFICER IN THE CIRCUMSTANCES CAME TO THE CONCLUSION THAT THE GIFTS THOUGH APPARENT ARE NOT REAL AND ACCORDIN GLY TREATED ALL THOSE AMOUNTS CREDITED IN THE BOOKS OF THE ASSESSEES AS T HE INCOME OF THE ASSESSEES. ON APPEAL THE COMMISSIONER OF INCOME-TAX CONCLUDED THAT THE STORY SET UP BY THE ASSESSEES IS UNACCEPTABLE A ND HARD TO BELIEVE AND THE PREPONDERANCE OF PROBABILITIES, THE COMMON COU RSE OF HUMAN LIVINGS POINT TO THE CONTRARY. THE APPEALS WERE ACCORDINGL Y DISMISSED. THE ITAT CONCURRED WITH THE FINDINGS AND CONCLUSIONS ARRIVED AT BY THE ASSESSING ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 14 OFFICER AND THE COMMISSIONER OF INCOME-TAX. THE TRI BUNAL NOTICED THAT THE LETTERS EXCHANGED BY THE PER- SON WHO HAD SENT FOREIGN EXCHANGE TO THE ASSESSEES ONLY INDICATE THAT THERE IS NO LOVE A ND AFFECTION BETWEEN THEM AND THAT HE IS CLEARLY MATERIALISTIC AND HIS S TATEMENT OF ACCEPTING A RECIPROCATION IS ALSO AN INDICATION TO THE FACT THA T HE IS NOT DOING ANYTHING FREE BUT CLEARLY THE COMPENSATION WAS A RO UNDABOUT MANNER OF SHOWING OF HE HAVING BEEN COMPENSATED EITHER IN IND IA OR ABROAD. THE TRIBUNAL ALSO TOOK NOTE OF THE VARIOUS OTHER ATTEND ING CIRCUMSTANCES AND FOUND IT DIFFICULT TO ACCEPT THE EXPLANATION OFFERE D BY THE ASSESSEES. THE HIGH COURT CAME TO THE CONCLUSION THAT THE REASONS ASSIGNED BY THE TRIBUNAL 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 POSSIBLE LEGALLY AND LOGICA LLY. 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 A ND ATTENDING CIRCUMSTANCES AVAILABLE ON RECORD 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 BE APPRECIATED AND UNDERSTOOD IN THE LI GHT OF THE LAW DECLARED BY THIS COURT IN SUMATI DAYAL [1995] SUPP 2 SCC 453. WHETHER THE HIGH COURT WAS JUSTIFIED IN INTERFERIN G WITH THE CONCURRENT FINDING OF FACT ARRIVED AT BY ALL THE AUTHORITIES INCLUDING THE TRI BUNAL? THE ASSESSING OFFICER FOUND THAT ALL THE SO-CALLED GIFTS CAME FROM ARIAVAN THOTAN AN D SUPROTOMAN. THE ASSESSEES DID NOT DECLARE THAT THEY ARE THE ALIASES OF SAMPATHKUMAR. IT IS ONLY AN AFTERTHOUGHT THEY HAVE COME FORWARD WITH THE SAID PLEA. THE ASSESSING OFF ICER ALSO FOUND THAT THE GIFTS WERE NOT 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 SPEAKING THOUGH ITS SENIOR VICE PRESIDENT CONCURRED WITH THE FINDINGS OF FACT. ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 15 THE FINDINGS IN OUR CONSIDERED OPINION ARE BASED ON THE MATERIAL AVAILABLE ON RECORD AND NOT ON ANY CONJECTURES AND SURMISES. THEY ARE NOT I MAGINARY AS SOUGHT TO BE CONTENDED. RELYING ON THE DECISIONS OF THIS COURT IN BEJOY GO PAL MUKHERJI V. PRATUL CHANDRA GHOSE, AIR 1953 SC 153 AND ORIENT DISTRIBUTORS V. B ANK OF INDIA LTD. AIR 1979 SC 867, SHRI IYER, LEARNED SENIOR COUNSEL CONTENDED THAT TH E ISSUE RELATING TO THE PROPRIETY OF THE LEGAL CONCLUSION THAT COULD BE DRAWN ON THE BASIS OF PROVED FACTS GIVES RISE TO A QUESTION OF LAW AND, THEREFORE, THE HIGH COURT IS JUSTIFIED IN INTERFERING IN THE MATTER SINCE THE AUTHORITIES BELOW FAILED TO DRAW A PROPER AND LOGI CAL INFERENCE FROM THE PROVED FACTS. WE ARE UNABLE TO PERSUADE OURSELVES TO ACCEPT THE S UBMISSION. THE FINDINGS OF FACT ARRIVED AT BY THE AUTHORITIES BELOW ARE BASED ON PR OPER APPRECIATION OF THE FACTS AND THE MATERIAL AVAILABLE ON RECORD AND SURROUNDING CIRCU MSTANCES. THE DOUBTFUL NATURE OF THE TRANSACTION AND THE MANNER IN WHICH THE SUMS WERE FOUND CREDITED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE HAVE BEEN DULY TAKEN INTO CONSIDERATION BY THE AUTHORITIES BELOW. THE TRANSACTIONS THOUGH APPAREN T WERE HELD TO BE NOT REAL ONES. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUES AND WAS PA ID THROUGH THE PROCESS OF BANKING TRANSACTION 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 MIS DIRECTED ITSELF AND COMMITTED AN ERROR IN DISTURBING THE CONCURRENT FINDINGS OF FACT . 12.3 IN THE LIGHT OF ABOVE LAW LAID DOWN BY THE APEX COURT IN THE CASE OF CIT V DURGA PRASAD MORE 82 ITR 540 (SC) AND IN T HE CASE OF COMMISSIONER OF INCOME-TAX V. P MOHANAKALA 291 ITR 278 (SC) IF WE CONSIDER THE FACTS OF THE CASE UNDER CONSIDERATION AND THE SURROUNDING CIRCUMSTANCES, PREVAILING PRACTICE/CUSTOMS IN THE S OCIETY, WE FIND THAT THE ASSESSEE IS NOT REMOTELY CONNECTED WITH THE FAM ILY OF THE DONOR AS EVIDENT FROM THE REPLIES GIVEN BY THE ASSESSEE IN H ER STATEMENT RECORDED BY THE AO WHICH ARE REPRODUCED ABOVE IN PARA NO 3 OF THIS ORDER. SHE HAS NO KNOWLEDGE ABOUT THE FAMILY OF THE DONOR, SHE NEVER VISITED THEIR HOUSE. SHE NEVER ATTENDED ANY SOCIAL FUNCTION OR NO RMAL GET TOGETHER ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 16 WITH THE FAMILY OF THE DONOR. SHE WAS NEVER INVITED BY THE DONOR FAMILY AND THE SAME WAS THE CASE WITH THE ASSESSEE AS THE DONOR FAMILY HAD NO LINK WHATSOEVER WITH THE ASSESSEE. THAT DONOR, MRS. CHANDRA HINGORANI IS NOT IN ANY WAY CONNECTED TO THE ASSESSEE OR TO H ER FAMILY. THERE WAS NO SUCH OCCASION FOR SUCH HUGE GIFTS TO THE ASSESSE E. UNDER THE ALLEGED CIRCUMSTANCES GIFT RECEIVED BY THE ASSESSEE IS NOT A GENUINE GIFT. WHEN GIFT IS NOT GENUINE, THE ADDITION U/S 68 IS WARRANT ED. FURTHER, AS SAID ABOVE THOSE TWO ELEMENTS ARE ESSENTIAL IN THE GIFT, GIVING AND TAKING. IN THE CASE UNDER CONSIDERATION, THE ASSESSEE HAS FAIL ED TO ESTABLISH SECOND PART OF THAT ELEMENT I.E. GIVING ANY LOVE AND AFFEC TION TO DONOR. ONE OF THE ASPECT OF THE GIFT IS THAT UNLESS IT IS IN FAVOUR O F A RELATIVE, A DISPOSITION CAN BE SAID TO OPERATE AS A GIFT ONLY IF IT CAN BE SHOWN TO CONTAIN SOME ELEMENT OF BOUNTY. IN THE CASE UNDER CONSIDERATION GIFT IS NOT GIVEN TO RELATIVE, THEREFORE, THE BURDEN IS ON THE ASSESSEE TO PROVE SOME ELEMENT OF BOUNTY. BUT THE ASSESSEE HAS FAILED IN THIS REGA RD. UNDER THE CIRCUMSTANCES WE ARE OF THE CONSIDERED VIEW THAT TH E AO HAS RIGHTLY MADE THE ADDITION U/S 68 OF THE ACT AS GIFT WAS NOT A GENUINE GIFT. SINCE WE FOLLOWED THE LAW LAID DOWN BY THE HONBLE SUPREM E COURT, THEREFORE, THE DECISION CITED BY THE LEARNED AR DOES NOT HELP THE ASSESSEE. IN THE RESULT THE APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 4 TH JUNE, 2010. SD/- SD/- V D RAO A L GEHLOT (JUDICIAL MEMBER) (ACCOUNTANT M EMBER) MUMBAI, ON THIS 4 TH JUNE, 2010. NEELAM ITA NO. 400/M/08 ASSESSMENT YEAR: 2004-05 MRS. ASHA M. AGARWAL 17 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (A) XXIV CONCERNED 4. THE CIT CONCERNED 5. THE DR H BENCH BY ORDER TRUE COPY ASST.REGISTRAR, ITAT, MUMBAI DATE INITIALS 1. DRAFT DICTATED ON: 12.05.10 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 17.05.10 SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/ PS 6. ORDER PRONOUNCED ON: SR. PS/PS 7. ORDER COME BACK TO SR.PS/PS 8. FILE SENT TO THE BENCH CLERK: SR. PS/PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK: 10. DATE OF DISPATCH OF ORDER: