Sri. Shambulal G. Chhabria, Bangalore V. ACIT, Bangalore

ITA 586/BANG/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5619 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-03-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 08-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMRITA RANJAN
• Keywords: Unexplained investment; Gift; Principle of natural justice; Deemed to accrue or arise in india; Reassessment proceedings
• Section: 143(3); 234B; 131; 68; 6

Judgement Text

PAGE 1 OF 14 ITA NO.5 86/BANG/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SHRI GEORGE GEORGE K, J.M. AND SHRI A MOHAN ALANKAMONY, A.M ITA NO.586/BANG/2009 (ASSESSMENT YEAR 2001-02) SRI SHAMBULAL G CHHABRIA, G-5, RAMANASHREE COMPLEX, NO.37, LADY CURZON ROAD, BANGALORE-1. - APPELLANT VS THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-8(1), BANGALORE. - RESPONDENT APPELLANT BY : SHRI S PARTHASARATHI, ADVOC ATE RESPONDENT BY : SMT. AMRITA RANJAN, ADDL. CIT ORD ER PER GEORGE GEORGE K : THIS APPEAL INSTITUTED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE LD. CIT (A)-II, BANGALORE IN ITA NO: 1 95/AC-8(1)/CIT(A)- II/06-07 DATED: 16.3.2009 FOR THE ASSESSMENT YEAR 2001-02 . 2. THE ASSESSEE HAD RAISED EIGHT GROUNDS, IN WH ICH, GROUND NOS.6 & 8 DO NOT SURVIVE FOR ADJUDICATION SINCE THEY BEING GEN ERAL AND NO SPECIFIC ISSUES INVOLVED. GROUND NO.7 IS NOT MAINTAINABLE AS CHARGING OF INTEREST U/S 234B AND U/S 234C OF THE ACT IS MANDATORY AND CONSEQ UENTIAL IN NATURE. IT IS THEREFORE, DISMISSED AS NOT MAINTAINABLE. IN TH E REMAINING GROUNDS, THE CRUX OF THE ISSUE IS CONFINED TO THE EFFECT THAT PAGE 2 OF 14 ITA NO.5 86/BANG/2009 2 THE LD. CIT (A) OUGHT TO HAVE REFRAINED FR OM UPHOLDING THE ADDITION OF RS.23.35 LAKHS BY APPLYING THE PROVISIONS OF S. 68 OF THE ACT. 3. THE ISSUE, IN BRIEF, WAS THAT THE ASSESSEE, A N INDIVIDUAL, A DEALER IN CERAMIC TILES AND ADHESIVES, FURNISHED HIS RETURN O F INCOME FOR THE AY UNDER CHALLENGE, ADMITTING A TOTAL INCOME OF RS.26.24 LAK HS WHICH WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE ASSESSMENT WAS SUBJECTED TO SCRUTINY U/S 143(3) OF THE ACT AND, ACCORDINGLY CONCL UDED, DETERMINING HIS TOTAL INCOME AT RS.49.59 LAKHS BY ADDING RS.23.35 LA KHS AS UNEXPLAINED INVESTMENT ALLEGEDLY CLAIMED AS GIFT FOR THE DETAILE D REASONS RECORDED IN THE SAID ORDER WHICH WAS CHALLENGED BY THE ASSESSEE AT T HE FIRST APPELLATE AUTHORITY LEVEL. THE LD. CIT (A)-IV, BANGALORE, FOR THE REASONS SET-OUT IN HIS FINDINGS IN ITA NO.36/R-8/CIT(A)-IV/03-04 DT.26 .7.2004 SUSTAINED THE ADDITION. AGGRIEVED, THE ASSESSEE CARRIED THE ISS UE BEFORE THE TRIBUNAL FOR SUCCOR. THE HONBLE TRIBUNAL IN ITS ORDER IN ITA N O.2671/B/2004 DT: 4.3.2005, AFTER DUE CONSIDERATION OF THE EITHER SID ES SUBMISSIONS, RESTORED THE MATTER ON THE FILE OF THE AO WITH A DIRECTION T O EXAMINE THE GENUINENESS OF TRANSACTION AFRESH. 4. IN THE REASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 263 (SIC) 254 OF THE ACT, THE AO HAD ANALYZED THE ISSUE AT LENGTH AND CAM E TO A CONCLUSION THAT THE GIFT OF RS.23.35 LAKHS WAS NOT GENUINE FOR THE ELABORATE REASONS RECORDED THERETO. PAGE 3 OF 14 ITA NO.5 86/BANG/2009 3 5. AGITATED, THE ASSESSEE HAD AGAIN APPROACHED TH E LD. CIT (A)-II ARMED WITH A STRONG PLEA THAT THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE GIFT WAS NOT GENUINE. 5.1. AFTER DUE CONSIDERATION OF THE ASSESSEES CO NTENTIONS, AOS REMAND REPORT AND ALSO THE ASSESSEES REJOINDER, THE LD. C IT (A) HAD IN FACT GONE INTO THE ROOT OF THE ISSUE, GIVING ILLUSTRATION OF THE STATEMENT OF THE ASSESSEE RECORDED ON OATH BY THE AO, EXTRACTED THE A FFIDAVIT FURNISHED BY THE ALLEGED DONOR AND ALSO EXHAUSTIVELY QUOTING THE PRONOUNCEMENTS OF VARIOUS JUDICIARY ON A SIMILAR ISSUE, THE LD. CIT ( A) HELD THAT THE GIFT ALLEGEDLY RECEIVED BY THE APPELLANTS DAUGHTER IS NOT GENUINE. TO ARRIVE AT SUCH A CONCLUSION, THE LD. CIT (A) HAD DELIBERATED THE ISSUE AT A GREAT LENGTH, THE RELEVANT AND CRUCIAL PORTION OF WHICH, FOR APPRECIATION OF FACTS, ARE REPRODUCED HERE-UNDER: 4.15THE GENERAL PRINCIPLES WHICH COULD BE CULLED OUT FROM THE DECISIONS (SUPRA) OF APEX COURT AND HIGH C OURT ARE THAT (I) IT IS FOR THE ASSESSEE TO LEAD EVIDE NCE TO PROVE THE IDENTITY, CREDITWORTHINESS AND FINANCIAL CAPACITY OF THE DONORS AS WELL AS THE GENUINENESS OF THE GIF T TRANSACTION; (II) MERE IDENTIFICATION OF THE DONOR AND MOVEMENTS OF THE AMOUNTS THROUGH BANKING CHANNELS A RE NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE GIFT ; (III) IT IS ALSO NECESSARY FOR THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF A GIFT TRANSACTION CANNOT BE DE TERMINED WITHOUT LOOKING INTO THE ASPECT OF THE FINANCIAL CA PACITY OF THE DONOR, THE SOURCE OF THE GIFT WAS GENUINE; (IV) THE GENUINENESS OF A GIFT TRANSACTION CANNOT BE DETERMI NED WITHOUT LOOKING INTO THE ASPECT OF THE FINANCIAL CA PACITY OF THE DONOR, THE SOURCE OF THE GIFT AND CAPACITY OF T HE DONOR TO GIVE SUCH AMOUNT IN GIFT; (V) THE GENUINEN ESS OF A GIFT TRANSACTION CANNOT BE DETERMINED WITHOUT LOOKI NG INTO THE ASPECT OF HUMAN PROBABILITIES, SURROUNDING PAGE 4 OF 14 ITA NO.5 86/BANG/2009 4 CIRCUMSTANCES SUCH AS RELATIONSHIP OF THE DONOR AND DONEE, THE OCCASION FOR MAKING SUCH GIFT ETC., (VI) IN CAS E THE GIFT RECEIVED BY THE ASSESSEE FROM THE DONOR ARE NOT GEN UINE THEN THE AMOUNT RECEIVED AS GIFTS IS TO BE TREATED AS CONCEALED INCOME OF THE ASSESSEE AND CAN BE ADDED T O THE INCOME OF THE ASSESSEE AS BEING THE ASSESSEES INCO ME FROM UNDISCLOSED SOURCES. 5.2. EXTENSIVELY QUOTING VARIOUS CASE LAWS, C HIEFLY, THE RULING OF THE HONBLE HIGH COURT OF P & H IN THE CASE OF YASH PAL GOEL V. CIT (310 ITR 75), THE LD. CIT (A) HAD COUNTERED THE ASSESSEES CLAIM THUS: 4.18. IN THE INSTANT CASE, THE AO ALSO FOUND THAT TELEPHONIC CONTACT WITH THE DONOR BY THE APPELLANT AFTER RECORDING OF THE STATEMENT OF THE APPELLANT BY THE AO ON 10.10.03. AT THE TIME OF APPEAL HEARING ALSO, THE APPELLANT FILED COPIES OF THE TELEPHONE BILLS WHICH REVEALED THAT TELEPHONIC CONTACT WITH THE DONOR WAS 3 4 TI MES ONLY AND THAT WAS DURING THE YEAR 2005. THE APPELLANT D ID NOT FILE FURTHER DETAILS HAVING TELEPHONIC CONVERSATION BEFORE RECEIVI NG THE GIFT. 4.19. FROM THE STATEMENT OF THE APPELLANT, IT TRANS PIRES THAT HE MET THE DONOR CASUALLY IN MUMBAI IN SOME RESTAURANT THROUGH A THIRD PERSON. THE DONOR NEVER VI SITED THE HOUSE OF THE APPELLANT AND AS SUCH HAD NO CHANCE T O MEET THE DAUGHTER OF THE APPELLANT. THUS, THE STAT EMENT MADE IN THE AFFIDAVIT PROVED TO BE FALSE THAT THE D ONOR MET KUMARI VANDANA (APPELLANTS DAUGHTER) AND HAD L OT OF LOVE AND AFFECTION. IT IS ALSO STATED THAT THE DON OR GAVE HER RIBS BY WAY OF GIFT SO THAT ENCASHMENT WOULD BE USED FOR HER MARRIAGE CEREMONY. THE INFORMATION AVAILAB LE ON RECORD REVEALED THAT MARRIAGE OF THE APPELLANTS DA UGHTER TOOK PLACE IN MAY 2001. HOWEVER, THE ALLEGED GIFT OF RS.23,35,000/- WAS LYING IN THE CAPITAL ACCOUNT OF THE APPELLANT EVEN AFTER THE EXPIRY OF TWO YEARS FROM H ER MARRIAGE. FROM THE RECORDED STATEMENT ON 8/10/2003 , IT IS SEEN THAT THE APPELLANT STATED THAT HE HAS GIVEN GIFTS TO HER ON VARIOUS OCCASIONS; THEREFORE, THE AFORESAID ALLEGED GIFT WAS NOT TRANSFERRED. HOWEVER, THE DETAILS OF SUCH PAGE 5 OF 14 ITA NO.5 86/BANG/2009 5 VARIOUS GIFTS GIVEN TO HIS DAUGHTER WERE NOT FURNIS HED BEFORE THE AO AND EVEN AT THE TIME OF APPEAL HEARIN G. THE AO HAS RIGHTLY HELD THAT, IF IT WAS A GIFT BY T HE DONOR TO THE APPELLANTS DAUGHTER, THEN THE AMOUNT WOULD HAVE BEEN TRANSFERRED AND, ACCORDINGLY, DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANTS DAUGHTER BUT THE IMPUGNE D GIFT IS BEING USED BY THE APPELLANT FOR HIS BUSINESS. T HUS, THE APPELLANT HAS NOT GIVEN ANY FURTHER CONCLUSIVE EVID ENCE TO PROVE THE GENUINENESS OF THE GIFT. 4.20. THE APPELLANT CLAIMED THAT RESURGENT INDIA BONDS FOR USD 50000 EQUIVALENT TO RS.23,35,000/- IN INDIA N CURRENCY, WAS RECEIVED BY HIM AS GIFT FROM SUBHASH DUDDANI ON ACCOUNT OF LOVE AND AFFECTION. INDEED, THE SAID BONDS AT THE FACE VALUE OF RS.23,35,000/- WAS CREDITED IN THE CAPITAL ACCOUNT OF THE APPELLANT F OR THE PREVIOUS YEAR RELEVANT TO THE A.Y. 2001-02. THE STATEMENT OF THE APPELLANT WAS RECORDED. THE CIT ( A)- IV, BANGALORE REQUESTED THE APPELLANT TO PRODUCE SH RI SUBHASH DUDDANI FOR CROSS-EXAMINATION. IN REPLY, T HE A.R OF THE APPELLANT VIDE LETTER DATED 15/1/2007 STATED THAT THE APPEAL BE KEPT IN ABEYANCE FOR CROSS EXAMINATI ON OF THE DONOR WHENEVER HE COMES TO INDIA AND UNTIL SUCH TIME AND TILL DATE SHRI DUDDANI DID NOT APPEAR FOR CROSS - EXAMINATION. MOREOVER, FROM THE STATEMENT RECORDED ON 8/10/03 AND THE AFFIDAVIT FILED BY THE DONOR, IT TR ANSPIRES THAT - (I) HE NEVER VISITED THE HOUSE OF THE APPELLANT IN BANGALORE; (II) THAT HE HAS NEVER MADE ANY GIFT TO HIS FAMILY MEMBERS OR ANYONE ELSE EXCEPT THE APPELLANT. THE AFFIDAVIT RAISES THE QUESTION AS TO WHETHER SUB BASH DUDDANI HAD THE CAPACITY TO MADE A GIFT OF RS.23,35,000/- TO THE APPELLANT WHO WAS NOT HIS REL ATIVE AND HE CASUALLY MET THE APPELLANT IN MUMBAI AND WHE THER THE GIFT WAS ON ACCOUNT OF LOVE AND AFFECTION, THE ANSWER IS INEVITABLY IN THE NEGATIVE. A SIMPLE IDENTIFICA TION OF THE DONOR AND SHOWING THE MOVEMENT OF THE GIFT THROUGH BANKING CHANNELS IS NOT SUFFICIENT TO PROVE THE GEN UINENESS OF THE GIFT. SINCE THE CLAIM OF GIFT IS RECEIVED B Y THE APPELLANT, THE ONUS LIES ON HIM NOT ONLY TO ESTABLI SH THE PAGE 6 OF 14 ITA NO.5 86/BANG/2009 6 IDENTITY OF THE PERSON MAKING THE GIFT BUT ALSO HIS CAPACITY TO MAKE THE GIFT AND THAT IT HAS ACTUALLY BEEN RECE IVED AS A GIFT FROM THE DONOR. NO SUFFICIENT REASON WHATSO EVER HAS BEEN ASSIGNED FOR GIFTING SUCH A HUGE AMOUNT BY NONE DONOR TO THE APPELLANT. THE DONOR NEVER VISITED TH E HOME OF THE APPELLANT. THEN, THE QUESTION ARISES, WHERE WAS THE LOVE AND AFFECTION? IT WAS NOTHING BUT A SUBT ERFUGE TO AVOID INCOME-TAX. THE TRANSACTIONS WERE NOT GEN UINE ONES. 4.21. IN VIEW OF THE CASE LAWS CITED ABOVE WHICH AR E APPLICABLE TO THE FACTS OF THE APPELLANTS CASE AND ALSO IN THE FACTS STATED ABOVE, IT IS HELD THAT THE GIFT AL LEGEDLY RECEIVED BY THE APPELLANTS DAUGHTER IS NOT GENUINE . THEREFORE, THE ACTION OF THE AO IN BRINGING THE SUM OF RS.23,35,000/- TO TAX IN THE HANDS OF THE APPELLANT AS HIS UNEXPLAINED INCOME U/S 68 OF THE ACT IS CONFIRMED. 6. DISILLUSIONED WITH THE TREATMENT HANDED DOWN BY THE LD. CIT (A), THE ASSESSEE HAS COME UP WITH THE PRESENT APPE AL. 6.1. DURING THE COURSE OF HEARING, THE LD. A R R EITERATED MORE OR LESS WHAT WAS PORTRAYED BEFORE THE FIRST APPELLATE A UTHORITY. IN FURTHERANCE, IT WAS SUBMITTED THAT - THAT THE CIT (A) OUGHT TO HAVE APPRECIATED TH AT THE GIFT GIVEN BY SUBBASH DUDDANI WAS GENUINE AND, ACCORDINGL Y, THE ADDITION MADE U/S 68 OF THE ACT WAS UNWARRANTED; - THE CIT (A) OUGHT TO HAVE APPRECIATED THAT THE DONO R HAD CONFIRMED THE GIFT AND THE POOF OF RECEIPT OF THE G IFT HAD BEEN FURNISHED BY THE ASSESSEE AND, CONSEQUENTLY THE PROVI SIONS OF S.68 WERE INAPPLICABLE AND THE ADDITION AS MADE WAS OPPO SED TO LAW AND LIABLE TO BE DELETED; - THAT THE CIT (A) OUGHT TO HAVE CONSIDERED THE STATE MENTS GIVEN IN THE REASSESSMENT PROCEEDINGS TO SATISFY THE GENUINE NESS OF THE PAGE 7 OF 14 ITA NO.5 86/BANG/2009 7 TRANSACTION AND HAVING FAILED TO DO SO, THE ADDITIO N AS SUSTAINED BY HIM WAS OPPOSED TO LAW; - WITHOUT PREJUDICE, EVEN THE GIFT WAS NOT ACCEPTABLE TO THE REVENUE TILL THE AMOUNT HAVING BEEN RECEIVED FROM DODDANI W HO HAD CONFIRMED THE SAME AND HIS CREDIT-WORTHINESS HAVING BEEN PROVED BY THE ASSESSEE, THE PROVISIONS OF S.68 WERE NOT APP LICABLE AND, THE ADDITION AS MADE WAS OPPOSED TO LAW 6.2. TO FURTHER STRENGTHEN THE ASSESSEES CASE , THE LD. A R CAME UP WITH A PAPER BOOK CONTAINING 1 24 PAGES WHICH CON SIST OF, AMONG OTHERS, THE COPIES OF (I) CAPITAL ACCOUNT, (II) SWORN STATEMENT U/S 131 OF THE ACT AND ALSO STATEMENT RECORDED U/S 131 OF THE ACT, (III) CORRES PONDENCE WITH THE AUTHORITIES WITH ITS ENCLOSURES. 6.3. ON THE PART OF THE REVENUE, THE LD. D R CAME UP WITH A SPIRITED ARGUMENT THAT A CLOSE SCRUTINY OF SEQUENCE OF EVENTS AS BROUGHT OUT BY THE AO IN HIS IMPUGNED ORDER REVEAL THAT THERE WA S NO CLOSE RELATIONSHIP BETWEEN THE ASSESSEE AND THE ALLEGED DONOR; THAT TH E ASSESSEE ADMITTED IN HIS STATEMENT DATED 24.11.05 THAT THE ALLEGED DONOR WAS NOT RELATED TO HIM BUT ONLY A FRIEND WHOM HE HAD MET VERY RARELY; THAT T ILL THE DATE OF THE ALLEGED GIFT, HE HAD MET THE DONOR ONLY 2 3 TIMES THAT TOO THROUGH AN INTERMEDIARY BANSILAL THAT TOO IN A RESTAURANT WHICH GOES TO PROVE THAT THE ENTIRE EPISODE HAS BEEN ENACTED IN SUCH A WAY TO MAKE BELIEVE THAT THE DONOR HAD MADE A GIFT TO THE ASSESSEES DAUGHTER OU T OF LOVE AND AFFECTION ETC., MOREOVER, THE AUTHORITIES BELOW, FOR THE RE ASONS RECORDED IN THEIR RESPECTIVE FINDINGS, HAVE TAKEN A JUDICIOUS VIEW T HAT THE ALLEGED GIFT OF RS.23.35 LAKHS BY SUBHAS DUDDANI WAS NOT GENUINE. IT WAS, THEREFORE, FERVENTLY PLEADED BY THE LD. D R THAT THE IMPUGNED O RDER OF THE FIRST PAGE 8 OF 14 ITA NO.5 86/BANG/2009 8 APPELLATE AUTHORITY REQUIRES TO BE SUSTAINED. TO DR IVE HOME HER POINT, THE LD. D R HAD PLACED STRONG RELIANCE ON THE FOLLOWING CASE LAWS: SMT KUSUM LATA THAKRAL V CIT (2009) 226 CTR (P&H) 5 15; CIT V. P.MOHANAKALA & ORS. (2007) 291 ITR 278 (SC); SUMATI DAYAL V. CIT (1995) 214 ITR 801 (SC); SAJAN DASS & SONS V. CIT (2003) 264 ITR 435 (DEL); & ITO V. MUKESH BHANUBHAI SHAH (2009) 318 ITR (AT) 39 4 (MUMBAI) 7. WE HAVE ATTENTIVELY CONSIDERED THE RIVAL SUB MISSIONS, DILIGENTLY PERUSED THE RELEVANT CASE RECORDS AND ALSO THE EVID ENCES ADDUCED BY THE EITHER PARTY IN THE PAPER BOOK ETC., 7.1. ON A CLOSE SCRUTINY OF THE IMPUGNED ASSESSM ENT ORDER AS WELL AS THE SWORN STATEMENT RECORDED U/S 131 AND SUBSEQUENT STA TEMENT DT.24.11.05, ONE COULD INFER THAT THE REPLIES ADDUCED BY THE ASSE SSEE WERE EITHER VERY CASUAL OR EVASIVE WHICH HAVE NO COHESION. HE HAD EMPHATICALLY ADMITTED THAT THE ALLEGED DONOR WAS NEITHER A CLOSE RELATIVE NOR A FREQUENT VISITOR TO THE ASSESSEES FAMILY. THE ALLEGED DONOR IN HIS AF FIDAVIT CANDIDLY ADMITTED THAT WE ARE FRIENDS OF PAST 18 20 YEARS SINCE THEN WE A RE REGULARLY INTERACTING OVER PHONE THOUGH I MET HIM ONLY IN THE YEAR 1997 IN FACT I HAD LOT OF LOVE AND AFFECTION TOWARDS HIS DAUGHTER KUMA RI VANDANA WHEN I MET HER LONG BEFORE KUMARI VANDANA WAS TOO SMALL . THE AFFIDAVIT WAS DATED; 24.2.2005 WHEREIN HE HAD SOLEMNLY AFFIRMED THAT HE A ND THE ASSESSEE WERE FRIENDS FOR THE PAST 18 TO 20 YEARS I.E., TO SAY THEY WERE FRIENDS RIGHT FROM 1985 OR 1987, HOWEVER , HE MET HIM ONLY IN THE YEAR 1997, THAT IS TO SAY HE MET THE ASSESSEE FOR THE FIRST TIME IN 1997, BUT, THEY WERE FRIENDS AND THE ALLEGED DONOR KNEW THE ASSESSEE FROM THE WAY BA CK IN 1985 OR PAGE 9 OF 14 ITA NO.5 86/BANG/2009 9 1987. IT IS TOO CLUMSY TO UNDERSTAND AS TO HOW THEY HAVE BECOME FRIENDS AND KNEW EACH OTHER WITHOUT SEEING THEM IN PERSON R IGHT FROM 1985 OR 1987. FOR HAVING SAID AND DONE, THE ALLEGED DONOR ADMITS THAT HE HAD LOT OF LOVE AND AFFECTION TOWARDS HIS (ASSESSEES) DAUGHTER VAN DANA WHEN HE MET HER LONG BEFORE VANDANA WAS TOO SMALL AND VERY CUTE CHILD AND I WAS VERY MUCH FOND OF HER. WHEN I CAME TO KNOW THAT SH E IS GETTING MARRIED, I DECIDED TO GIVE HER A SUITABLE GIFT. AS PER THE MATERIAL AVAILABLE ON RECORD, THE ASSSESSEES DAUGHTERS (VA NDANA) MARRIAGE TOOK PLACE IN MAY 2001 FOR WHICH THE DONOR ALLEGED TO HAV E MADE A MARRIAGE GIFT. HOWEVER, AS PER HIS OWN ADMISSION IN THE SAID AFFID AVIT, HE HAD MET THE ASSESSEE ONLY IN THE YEAR 1997 AND AS PER THE DONORS OWN ADMIRATION , VANDANA WAS TOO SMALL BUT VERY CUTE ETC., THE MIND BOGGLING QUESTION IS - HOW A CHILD WHO WAS TOO SMALL IN THE YEAR 1997 ATTA INED THE MARRIAGEABLE AGE IN 2001, SAY, WITHIN A SPAN OF FIVE YEARS ? ANOTHER AVERMENT OF THE DONOR FOR WORTH CONSIDERATION IS TH AT HIS ANNUAL INCOME FROM MULTIPLE BUSINESSES WAS AROUND USD 3 MILLION. SUCH BEING A PERSON WHO WAS FINANCIALLY WELL PLACED, THOUGHT IT FIT TO P RESENT A RESURGENT BOND WHICH WAS YET TO BE MATURED AS A MARRIAGE GIFT WAS RATHER INTRIGUING. IN A NUT-SHELL, THE SO CALLED AFFIDAVIT OF THE ALLEGED D ONOR WAS FULL OF CONTRADICTION AND THE SAME HAS RATHER BEEN CRAFTED IN SUCH A MANNER TO BAIL OUT THE ASSESSEE FROM THIS SORDID AFFAIR. 7.2. ON A GLIMPSE OF THE IMPUGNED ORDER OF THE LD. CIT (A) WHICH IS UNDER CHALLENGE, WE FIND THAT THE FIRST APPELLATE A UTHORITY HAD ALSO BROUGHT OUT THE CONTRADICTIONS GALORE OF THE ASSERTIONS IN THE AFFIDAVIT AND THE STATEMENTS OF THE ASSESSEE RECORDED ON OATH. TO SUS TAIN THE AOS STAND, PAGE 10 OF 14 ITA NO. 586/BANG/2009 10 THE LD. CIT (A) DREW STRENGTH FROM VARIOUS JUDICIAL PRONOUNCEMENTS WHICH ARE, BRIEFLY, BROUGHT OUT HEREUNDER: (I) THE HONBLE TRIBUNAL, DELHI BENCH IN THE CASE OF IT O V. NAVEEN KUMAR AGARWAL [25 SOT 253] HAD DECIDED THE GIFT AM OUNT AS NOT GENUINE AND CONSIDERED IT DEEMED INCOME OF THE ASSESSEE U/S 68 OF THE ACT FOR THE REASONS RECORDED THERETO. (II) THE HONBLE SUPREME COURT, IN ITS WISDOM, IN THE C ASE OF SUMATI DAYAL V. (1995) 214 ITR 801 (SC) RULED THAT IN THE CASES IN WHICH A RECEIPT IS SOUGHT TO BE TA XED AS INCOME, THE BURDEN LIES ON THE DEPARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PROVISION AND IF A RECEIPT IS IN THE NATURE OF INCOME, THE BURDEN OF PROVIDING THAT IT I S NOT TAXABLE BECAUSE IT FALLS WITHIN EXEMPTION PROVIDED BY THE ACT LIES UPON THE ASSESSEE. BUT IN VIEW OF S.68 OF THE ACT, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS O F THE ASSESSEE FOR ANY PREVIOUS YEAR, THE SAME MAY BE CHA RGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION OFFERED BY THE ASS ESSEE ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPIN ION OF THE AO, NOT SATISFACTORY. IN SUCH A CASE THERE IS, PRIMA FACIE EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECE IPT OF MONEY, AND IF HE FAILS TO REBUT, THE SAID EVIDENCE BEING UN-REBUTTED, CAN BE USED AGAINST HIM BY HOLDING THA T IT WAS A RECEIPT OF AN INCOME IN NATURE. (III) YET ANOTHER RULING IN THE CASE OF CIT V. P MOHANAKA L & ORS., REPORTED IN 291 ITR 278 (SC), THE H ONBLE APEX COURT OBSERVED THUS AO, CIT (A) AND TRIBUNAL AFTER CONSIDERATION OF MATERIAL ON RECORD HAVING FOUND THAT THE EXPLANATI ON OFFERED BY THE ASSESSEE WAS UNACCEPTABLE AND HELD THAT NRI GIFTS WERE NOT REAL, NO SUBSTANTIAL QUESTI ON OF LAW AROSE, AND HIGH COURT WAS NOT JUSTIFIED IN DISTURBING SAID FINDINGS OF FACT AND DELETING ADDIT ION UNDER S.68. PAGE 11 OF 14 ITA NO. 586/BANG/2009 11 (IV) MORE SIGNIFICANTLY, THE HONBLE PUNJAB & HA RYANA HIGH COURT IN THE CASE OF YASPAL GOEL V. CIT 310 ITR 75 WAS VERY EMPHATIC IN ITS RESOLVE THAT THE FINANCIAL POSITION OF M SUGGESTED THAT HE NEIT HER HAD THE CAPACITY TO MAKE THE GIFT NOR THE SOURCE FROM W HERE THE GIFT WAS MADE. NO REASON WHATSOEVER HAD BEEN ASSIGNED FOR GIFTING SUCH A HUG E AMOUNT BY M TO THE ASSESSEE. M NEVER VISITED THE HOME OF THE ASSESSEE AND, HENCE, THERE WAS NO LOVE AND AFFECTION. IT WAS NOTHING BUT A SUBTERFUGE TO AVOID INCOME-TAX.THE TRANSACTIONS WERE NOT GENUINE ONES. 7.3. WE HAVE ALSO PERUSED THE VARIOUS JUDICIAL PRONOUNCEMENTS ON WHICH THE REVENUE HAD PLACED ITS FAITH, A FEW OF WH ICH, ARE DELIBERATED UPON HERE-UNDER: (I) IN THE CASE OF KUSUM LATA THAKRAL V. CIT RE PORTED IN (2009) 226 CTR (P&H), THE HONBLE PUNJAB & HARYANA HIGH COU RT HAD OBSERVED THUS- IT IS CLEAR FROM THE FINDING OF THE TRIBUNAL THAT THERE WAS NO RELATIONSHIP BETWEEN THE DONORS AND THE ASSE SSEE AND THERE WAS NO NATURAL LOVE AND AFFECTION. THE T RIBUNAL HAS FOLLOWED THE JUDGMENT OF THIS COURT LAYING DOWN THAT IN THE ABSENCE OF NATURAL LOVE AND AFFECTION, THE GIFT COULD NOT BE ACCEPTED AS GENUINE. THE ABOVE BEING UNDISP UTED POSITION, MERE FACT THAT THE ASSESSEE PRODUCED THE CONFIRMATIONS OF THE GIFT DEEDS AND THE ASSESSEE WA S NOT ALLOWED OPPORTUNITY TO CROSS-EXAMINE THE DONORS WHO DISOWNED THE MAKING OF THE GIFTS, THEY WILL NOT BE IN ANY MANNER AFFECTED. THE QUESTION WHETHER DENIAL OF OPPORTUNITY OR CROSS EXAMINATION RESULTS IN VIOLAT ION OF NATURAL JUSTICE DEPENDS UPON FACTS OF EACH CASE. T HE OBJECT OF CROSS-EXAMINATION IS TO TEST THE VERACITY OF THE VERSION GIVEN IN EXAMINATION IN CHIEF. IN THE PRES ENT CASE, EVEN IF CROSS EXAMINATION WAS ALLOWED AND THE DONOR S WHO HAD DISOWNED THE MAKING OF GIFTS, WERE CONFRONTED A ND PAGE 12 OF 14 ITA NO. 586/BANG/2009 12 SHOWN TO BE FACTUALLY WRONG, THE SAME WOULD HAVE MA DE NO DIFFERENCE, AS THERE WAS NO NATURAL LOVE AND AFFECT ION AND IN ITS ABSENCE, THE GIFTS WERE NOT GENUINEMERE FACT THAT THE ASSESSEE PRODUCED THE CONFIRMATIONS OF THE GIFT DEEDS AND THE ASSESSEE AS NOT ALLOWED OPPORTUNITY T O CROSS EXAMINE THE DONORS WHO DISOWNED THE MAKING OF THE G IFTS, THEY WERE NOT IN ANY MANNER AFFECTED SINCE THERE W AS NO RELATIONSHIP OR LOVE AND AFFECTION BETWEEN THE DONO RS AND THE ASSESSEE. (II) IN THE CASE OF ITO V. MUKESH BHANUBHAI SHAH REPORTED IN (2009) 318 ITR (AT) 394 (MUMBAI), THE HONBLE TRIBU NAL, MUMBAI BENCH, HAD OBSERVED THUS THE ASSESSEE MUST PRODUCE EVERY NECESSARY EVIDENCE TO SUBSTANTIATE THE CLAIM OF GENUINE GIFTS. IN THE CIRCUMSTANCES OF SUCH FAILURES, THE ADVERSE OPINION OF THE ASSESSING OFFICER ABOUT THE GENUINENESS OF THE TRAN SACTION OF THE GIFT IN ITSELF CONSTITUTES AN EVIDENCE AGAIN ST THE ASSESSEE. THE OWNERSHIP MUST BE QUALIFIED BY THE WORTHINESS TO ACQUIRE THE OWNED ASSET. THE DOCUMEN TS AVAILABLE ON RECORD DID NOT INDICATE BASIC FINANCIA L CAPABILITIES OF THE DONORS AS THERE WERE NO ELEMENT ARY PARTICULARS ABOUT THE INCOME PARTICULARS OF THE DON ORS SUCH AS ANNUAL STATEMENTS OR INCOME-TAX ASSESSMENT PARTI CULARS ETC. THE ASSESSEE WAS NOT IN A POSITION TO SUBMIT THEM EITHER. THUS, THE ASSESSEE DID NOT FURNISH REQUISI TE BASIC DETAILS RELATING TO VARIOUS ASPECTS OF CREDIT WORTH INESS OF THE DONORS. REGARDING THE GENUINENESS OF THE TRANS ACTION, THE DONORS AND DONEEE DID NOT KNOW ONE ANOTHER AS T HEY HAD NEVER MET, NOR WERE THEY AWARE OF THEIR FINANCI AL POSITIONS. FURTHER, IT WAS AN ADMITTED POSITION TH AT THERE WERE NO FORMAL OCCASIONS OR EVENTS FOR CONTEXTUALIZ ING THE ALLEGED GIFTS. THE RELATIONSHIP BETWEEN THE DONOR AND THE DECEASED FATHER OF THE ASSESSEE WAS NOT ESTABLISHED TOO. THERE WAS NEITHER THE CONFIRMATION LETTERS NOR THE GIFT DEEDS ON RECORD. BANK TRANSACTIONS SHOULD NOT BE T REATED SACROSANCT AND COULD NOT ASSUME EVIDENTIARY SIGNIFI CANCE FOR THE PURPOSE OF SECTION OF 68 OF I.T.ACT. PAGE 13 OF 14 ITA NO. 586/BANG/2009 13 7.4. TAKING COGNIZANCE OF THE ASSESSEES ASSERTIO NS, THE SUBMISSIONS OF THE LD. D.R, CAREFUL PERUSAL OF THE RELEVANT CAS E RECORDS AND ALSO THE FINDING OF THE LD. CIT (A) AND CHIEFLY THE RULING OF THE VARIOUS HONBLE JUDICIARY AS DELIBERATED UPON IN THE FOREGOING PARAG RAPHS, WE ARE OF THE UNANIMOUS VIEW THAT THE GIFT ALLEGEDLY RECEIVED BY THE ASSESSEE ON THE OCCASION OF HIS DAUGHTERS MARRIAGE WAS NOT GENUINE AS CONTEMPLATED BY THE AUTHORITIES BELOW. OUR ABOVE VIEW IS SOLIDLY B ACKED BY THE FOLLOWING REASONS: (I) THE ALLEGED DONOR HAD NOT VISITED THE RESIDENCE OF THE ASSESSEE EVEN ONCE AND, THUS, THERE WAS TOTAL ABSEN CE OF LOVE AND AFFECTION WHICH PROMPTED THE DONOR TO DONA TE A WHOPPING SUM OF [EQUIVALENT TO] RS.23.35 LAKHS; (II) THERE WERE TOTAL DISTORTIONS IN THE ASSERTIONS OF T HE DONOR THAT HE AND THE ASSESSEE WERE FRIENDS FOR 18 20 YEARS, BUT THEY HAVE NOT MET EACH OTHER UNTIL THE DONOR HA D MET THE ASSESSEE FOR THE FIRST TIME ONLY IN 1997 THAT T OO THROUGH AN INTERMEDIARY IN A RESTAURANT AT MUMBAI. THIS IMPLICITLY MAKES IT CLEAR THAT THE CLAIM OF THE DONOR IN HIS AFFIDAVIT THAT THEY WERE FRIENDS FOR MORE THAN TWO DECADES WAS FALSE; (III) ANOTHER GLARING DISTORTION IN THE DONORS ASSERTION WAS THAT IN FACT I HAD LOT OF LOVE AND AFFECTION TOWARDS HI S DAUGHTER KUMARI VANDANA WHEN I MET HER LONG BEFORE KUMARI VA NDANA WAS TOO SMALL AND VERY CUTE. HE HAD MET THE ASSESSEE HIMSELF ONLY IN 1997 ITSELF AND IF THE DON ORS STATEMENT WERE TO BE TAKEN ON ITS FACE VALUE DOE S IT MEAN THAT THE SMALL KID (VANDANA) ATTAINED THE MARRIAGEA BLE AGE WITHIN A SPAN OF FIVE YEARS [FROM 1997 TO MAY, 2001 ]? (IV) AS RIGHTLY POINTED OUT BY THE HONBLE MUMBAI BENCH IN THE CASE OF ITO V. MUKESH BHANUBHAI SHAH CITED SUPRA, T HE ASSESSEE DID NOT FURNISH REQUISITE BASIC DETAILS RE LATING TO VARIOUS ASPECTS OF CREDITWORTHINESS OF THE DONOR AN D, THUS, PAGE 14 OF 14 ITA NO. 586/BANG/2009 14 THE RELATIONSHIP BETWEEN THE DONOR AND THE ASSESSEE WAS NOT ESTABLISHED WITH ANY DOCUMENTARY EVIDENCE; (V) FOR THE AMOUNT GIFTED FOR ASSESSEES DAUGHTERS MAR RIAGE, THERE IS NO MATERIAL ON RECORD TO PROVE THAT THESE AMOUNTS WERE ACTUALLY UTILIZED FOR THE BENEFIT OF ASSESSEE S DAUGHTER. MOREOVER, THOUGH THE ALLEGED DONOR HAD S TATED THAT THIS GIFT IS OUT OF NATURAL LOVE AND AFFECTION FOR ASSESSEES DAUGHTER, HE NEVER ATTENDED HER MARRIAGE . (VI) TO TOP IT ALL , THE COPY OF THE AFFIDAVIT AS FURNISHED BY THE LD. A.R.[SOURCE: P 23 -24 OF PB], THE ALLEGED DONOR HAD NOT SWORN ON OATH EITHER BEFORE A NOTARY OR AN AUTHORIZED OFFICER OF INDIAN EMBASSY AT DUBAI AND, THUS, THE AUTHENTICITY OF THE DONORS SOLEMN AFFIRMATION HAD NO SANCTITY. 8. IN THE LIGHT OF THE AFORESAID REASONS, WE ARE OF THE VIEW THAT THE STAND TAKEN BY THE CIT(A) IS JUSTIFIED AND WE CO NFIRM HIS ORDER. 9. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED . THE ORDER PRONOUNCED ON THURSDAY, THE 21 ST DAY OF APRIL, 2011 AT BANGALORE. SD/- SD/- (A MOHAN ALANKAMONY) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE C IT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/28/3. BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.