ITO, Jaipur V. SHRI HARI CHARAN SHARMA, Jaipur

ITA 979/JPR/2011

• Counselvise Citation: 97923114 RSA 2011
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 09-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift; Business income; Source of fund; Additional evidence; Onus to prove; Reassessment proceedings
• Section: 68; 148

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. MEENA) I.T.A. NO. 979/JP/2011 ASSTT. YEAR- 2007-08 PAN NO. ACUPS 9986 P THE I.T.O., HARI CHARAN SHARMA, WARD 6(3), JAIPUR. VRS. 44, DURGA VIHAR, DURGAPURA, JAIPUR. (APPELLANT) (RESPONDENT) DEPARTMENT BY :- SHRI RAJESH OJHA. ASSESSEE BY :- NONE (DATE WAS NOTED). DATE OF HEARING : 08/09/2014 DATE OF PRONOUNCEMENT : 12/09/2014 O R D E R PER: T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 10/08/2011 OF THE LEARNED C.I.T.(A)-II, JAIPUR FOR T HE A.Y. 2007-08. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDIT ION OF RS. 15,00,153/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED GIFT WITH OUT APPRECIATING THE FACTS THAT:- (I) THE DONOR WAS NOT PRODUCED FOR PERSONAL EXAMINATI ON BEFORE THE A.O. NOR HER CORRECT ADDRESS, PRESENT WHEREABOUTS, D ETAILS OF PASSPORT ETC. WERE GIVEN FOR FURTHER EXAMINATION; ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 2 (II) THE CREDITWORTHINESS OF THE DONE AND GENUINENESS OF THE TRANSACTION IS NOT ESTABLISHED BEYOND DOUBT; (III) THERE WAS NO OCCASION TO MAKE SUCH A HUGE GIFT AND GIFT MADE WITHOUT ANY OCCASION CANNOT BE HELD AS GENUINE AS HE LD BY HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CHAIN S UKH RATHI VS. CIT 270 ITR 369 (RAJ.); (IV) THE GENUINENESS OF THE GIFT WAS NOT ESTABLISHED BEYOND DOUBT CONSIDERING THE SURROUNDING CIRCUMSTANCES, PREVAILI NG PRACTICE/CUSTOM IN THE SOCIETY, DOUBTFUL NATURE OF THE TRANSACTIONS, THE MANNER IN WHICH THE SUMS ARE FOUN D CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE AND THE PRINCIPLES OF HUMAN PROBABILITIES AS LAID DOWN IN THE CASE OF CIT VS. DUR GAPRASAD MORE 82 ITR (SC) AND SUMATI DAYAL VS CIT 214 ITR 801. 2. GROUNDS NO. (I) TO (IV) OF THE APPEAL ARE AGAINS T DELETING THE ADDITION OF RS. 15,00,153/- MADE BY THE ASSESSING OFFICER ON AC COUNT OF UNEXPLAINED GIFT. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IS AN LIC AGENT. DURING THE YEAR UNDER CONSIDERATION, HE HAS RECEIVED RS. 15,00 ,153/- AS GIFT FROM HIS DAUGHTER ON FOLLOWING DATES. 1. ON 04/05/2006 RS. 2,00,000/- 2. ON 07/05/2006 RS. 10,00,000/- 3. ON 12/07/2006 RS. 3,00,153/- IT WAS NOTICED BY THE ASSESSING OFFICER THAT DONOR H AD RECEIVED AMOUNT OF RS. 15,03,657/- FROM LIC, WHICH WAS CREDITED IN HER BANK ACCOUNT ON 28/3/2006 AND THE ENTIRE AMOUNT WAS WITHDRAWN ON 30/3/2006 AND 3 1/3/2006 LEAVING A ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 3 BALANCE OF RS. 4,823/-. THEREAFTER, FOLLOWING AMOUNT HAD BEEN CREDITED THROUGH CHEQUES IN THIS ACCOUNT. 1. 29/04/2006 RS. 7,00,000 2. 05/05/2006 RS. 2,00,000 3. 06/06/2006 RS. 4,00,000 4. 09/05/2006 RS. 2,00,000 THE ASSESSING OFFICER ASKED TO EXPLAIN THE SOURCE OF ENTRIES IN THE BANK ACCOUNT OF HER DAUGHTER TO PROVE THE GENUINENESS OF THE GIFT. THE ASSESSEE GAVE SIMPLE CERTIFICATE FROM THE DONOR ON A PLAIN P APER MENTIONING THAT SHE HAD GIVEN ABOVE MENTIONED AMOUNT OF GIFT TO THE ASS ESSEE WITHOUT EXECUTING PROPER GIFT DEED ON A NON-JUDICIAL STAMP PAPER NOR THERE WAS ANY MENTION OF THE RECEIPT OF GIFT BY THE DONEE. THE DONOR DID NOT HAVE ANY PAN NUMBER AND IT IS CONCLUDED BY THE ASSESSING OFFICER ON THIS BA SIS THAT THE ASSESSEE HAS ROUTED HIS UNACCOUNTED MONEY THROUGH THE DAUGHTERS BANK ACCOUNT. SHE IS MARRIED AND IT IS NOT BELIEVABLE THAT ANY FATHER WOU LD ACCEPT GIFT FROM MARRIED DAUGHTER WHEN FATHER WAS HAVING SUFFICIENT INCOME AN D THERE WAS NO COMPELLING CIRCUMSTANCES FOR TAKING GIFT. THOUGH, TH E IDENTITY OF DONOR IS PROVE BUT SINCE THE CREDITWORTHINESS WAS NOT PROVE AN D SOURCE OF THE DEPOSIT MADE FOR MAKING THE GIFT REMAINED UNPROVED. THE GENU INENESS OF THE GIFT HAD NOT BEEN PROVED, THEREFORE, HE MADE ADDITION OF RS. 15,00,153/- IN THE INCOME OF THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCE. ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 4 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED ASSE SSING OFFICER, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A), WHO HAD ALLOWED THE APPEAL BY OBSERVING AS UNDER:- 4.1 I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APPELLANT . THE AO NOTICED THAT THE ASSESSEE HAD RECEIVED GIFT OF RS 1 5,00,1537- FROM HIS DAUGHTER. THE AO WAS AGGRIEVED WITH THE FA CT THAT NO GIFT DEED WAS FILED. THE SOURCES OF CHEQUES DEPOSITED IN THE BANK ACCOUNT OF DONOR WERE NOT EXPLAINED. IT WAS NOT KNO WN WHETHER THE DONOR WAS ASSESSED TO TAX OR NOT. THE AO WAS OF THE OPINION THAT IT WAS NOT CUSTOMARY TO ACCEPT GIFTS FROM A MARRIED DA UGHTER PARTICULARLY WHEN THE FATHER HAD SUFFICIENT INCOME. THE AO ACCEPTED THAT THE IDENTITY OF DONOR WAS PROVED HOWE VER SINCE HER CREDIT WORTHINESS WAS NOT PROVED, THE AO MADE THE I MPUGNED ADDITION U/S 68 OF THE IT ACT. DURING THE PRESENT A PPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED THE NECESSARY E VIDENCES SUCH AS GIFT DEED, PAN OF THE DONOR, BANK STATEMENT , NAME & ADDRESS OF PARTY FROM WHOM ADVANCES WERE RECEIVED O UT OF WHICH GIFTS WERE MADE TO THE ASSESSEE. ONE M/S SUNNY DAL MILLS PVT. LTD HAD GIVEN ADVANCES THROUGH CHEQUES TO THE DONOR I.E . SMT. DEEPALI SHARMA WHICH WERE CREDITED IN HER BANK ACCOUNT. OUT OF THESE RECEIPTS, THE DAUGHTER OF THE APPELLANT PARTED AWAY WITH GIFTS TO THE APPELLANT. THE BANK STATEMENT OF THIRD PARTY M/S SU NNY DAL MILLS PVT. LTD WAS ALSO SUBMITTED. THESE ADDITIONAL EVIDENCES WERE FORWARDED TO THE ITO, WARD-6(3), JAIPUR VIDE MY LETTER DATED 25.5.11. IN RESPONSE, THE AO SUBMITTED DETAILED REMAND REPORT V IDE HIS LETTER DATED 25.7.11. THE AO HAD EXAMINED THE ORIGINAL GIFT DEED DATED 19.7.06 EXECUTED ON STAMP PAPER PURCHASED ON 06.03. 06. THE ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 5 GIFT DEED WAS NOTARIZED ON 19.7.06 BY SH. ANIL KUMA R JAIN, ADVOCATE. THE DETAILS OF GIFTS OF RS 15,00,1537-ALO NG WITH CHEQUE NUMBER 145043 DATED 04.05.06 FOR AN AMOUNT OF RS 2 LAKHS, CHEQUE NUMBER 145044 DATED 07.05.06 FOR AN AMOUNT O F RS 10 LAKHS AND CHEQUE NUMBER 145046 DATED 12.07.06 FOR A N AMOUNT OF RS 3 LAKHS DRAWN ON SBBJ BANK, JAIPUR WERE SPECIFICA LLY MENTIONED. THE GIFT WAS STATED TO BE UNCONDITIONAL AND OUT OF FREE WILL & PLEASURE. IT IS APPARENT THAT THE GIFT DEED WAS EXE CUTED AT THE TIME OF MAKING GIFT AND WAS NOT EXECUTED ON A LATER DATE . THE IMMEDIATE SOURCES OF GIFTS WERE RECEIPTS ON ACCOUNT OF ADVANCES FROM M/S SUNNY DAL MILLS PVT. LTD. PRIOR TO THESE D EPOSITS, THE DONOR HAD RECEIVED AMOUNT OF RS 15,03,6567- ON MATURITY O F LIC POLICY. THE AO HAD EXAMINED ALL THE CREDIT AND DEBIT ENTRIE S APPEARING IN THE BANK ACCOUNT OF THE DONOR. THE DONOR I.E. SMT. D EEPALI SHARMA WAS ALSO ASSESSED WITH THE SAME AO. HER PAN WAS STAT ED TO BE AXEPS1213N. IN THE REMAND REPORT, THE AO HAS STATED THAT THE DONOR WAS SHOWING MEAGER INCOME IN HER RETURNS OF I NCOME AND SUCH A HUGE GIFT TO HER FATHER WAS NOT JUSTIFIED. T HE AO ALSO MADE INQUIRIES FROM M/S SUNNY DAL MILLS PVT. LTD AND THE SE TRANSACTIONS WERE FOUND RECORDED IN THEIR AUDITED ACCOUNTS. SINC E M/S SUNNY DAL MILLS PVT. LTD HAD CONFIRMED THE TRANSACTIONS A ND SOURCE OF THE SOURCE STOOD EXPLAINED, IN SUCH CIRCUMSTANCES THE O BSERVATION OF THE AO AS TO WHY THE DONOR HAD MADE THE GIFTS OUT OF LO ANS THAT TOO AGAINST PREVAILING PRACTICE AND SOCIAL NORMS DID NO T REQUIRE COGNIZANCE. SINCE THE DONOR WAS RESIDING IN USA AFTER MARRIAGE, SHE COULD NOT BE PRODUCED BEFORE THE AO. THEREFORE, I AM NOT INCLINED TO AGREE WITH THE CONTENTIONS RAISED BY TH E AO. THE DONOR WAS A PERSON OF MEANS WITH THE FINANCIAL CAPACITY TO GIVE THE ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 6 GIFTS. THE DONOR HAD SHOWN RECEIPTS IN HER BANK STA TEMENT AMOUNTING TO RS. 15,03,6577- ON ACCOUNT OF RECEIPT OF LIC MATURITY. THIS AMOUNT WAS WITHDRAWN BY HER. FURTHER , THE IMMEDIATE SOURCES OF THE MONIES GIFTED BY THE DONOR WERE THE CHEQUES CREDITED IN HER BANK ACCOUNT WHICH WERE REC EIVED FROM M/S SUNNY DAL MILLS PVT. LTD. THERE IS NO EVIDENCE OR M ATERIAL TO EVEN SUGGEST, AS POINTED OUT ON BEHALF OF THE ASSESSEE, THAT THE CHEQUES DIRECTLY OR INDIRECTLY EMANATED FROM THE ASSESSEE S O THAT IT COULD BE SAID THAT THE ASSESSEE'S OWN MONIES WERE BROUGHT BACK IN THE GUISE OF GIFTS. THE* SUSPICION OF THE DEPARTMENT IS GENERALLY AROUSED IF THERE ARE CASH DEPOSITS JUST PRIOR TO THE ISSUE OF CHEQUES TO THE ASSESSEE'S AS GIFTS. IN SUCH A CASE, THE BURDEN ON THE ASSESSEE WOULD PROBABLY BE HEAVIER TO DISPEL THE SUSPICION A ND SHOW THAT THE CASH DID NOT EMANATE FROM HIM. HOWEVER NOTHING OF T HIS SORT EXISTS IN THE PRESENT CASE. IN THE PRESENT CASE, THERE ARE NO CASH DEPOSITS IN THE BANK ACCOUNTS OF THE DONOR PRIOR TO THE GIFT S. THE PRESENT CASE DOES NOT APPEAR TO BE A CASE WHERE THE CREDITWO RTHINESS OF THE DONOR AND THE GENUINENESS OF THE GIFTS CAN BE C ALLED IN QUESTION. THE AO HAS MADE CERTAIN OBSERVATIONS IN T HE REMAND REPORT THAT THE DONOR WAS HAVING MEAGER SOURCES OF INCOME AND THERE WAS NO JUSTIFICATION IN MAKING HUGE GIFT OF R S 15,00,0007- TO THE ASSESSEE. THE OBSERVATIONS OF THE AO WERE NOT J USTIFIED LOOKING TO THE FACTS & SURROUNDING CIRCUMSTANCES AS THE DON OR HAD RECEIVED AMOUNT OF RS 15,00,1537- ON LIC MATURITY WHICH WAS WITHDRAWN FROM BANK. THE DONOR DUE TO HER OWN SAVING HABITS W AS ABLE TO DERIVE SUCH A HUGE LIC MATURITY AMOUNT WHICH CLEARL Y ESTABLISHED THAT SHE WAS A PERSON OF MEANS. THE DONOR BELONGED TO A RICH & SOUND FAMILY. THE SPOUSE OF THE DONOR WAS A SOFTWAR E ENGINEER ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 7 WORKING IN USA AND DERIVED HANDSOME SALARY. FURTHER THE A.O HAD COMPLETELY OVERLOOKED THE FACT OF SELF WITHDRAWALS MADE BY THE DONOR. THE AO WAS NOT HAVING ANYTHING ON RECORD WHI CH COULD SUGGEST THAT WITHDRAWALS WERE EXPLOITED BY THE DONO R IN ANY OTHER MANNER. THE AO HAS EMPHASIZED THAT THE SIGNATURES O F DONOR ON CONFIRMATION SUBMITTED BEFORE THE AO AND THAT ON HE R RETURN DID NOT TALLY. HOWEVER IT IS SEEN THAT SIGNATURES OF THE DO NOR AS SHOWN IN PAN CARD TALLY WITH THAT ON GIFT DEED SUBMITTED DUR ING APPELLATE PROCEEDINGS AND RETURN OF INCOME FOR AY 08-09. EVEN OTHERWISE THE CONFIRMATION FURNISHED BEFORE THE AO DURING ASSESSM ENT PROCEEDINGS HAD BEEN REJECTED BY THE AO ON THE GROUND THAT IT D ID NOT CONTAIN PAN OF THE DONOR. THE DOCUMENT WHICH HAD BEEN REJECT ED BY THE AO COULD NOT BE RELIED UPON BY HIM SUBSEQUENTLY. TH E AO HAD MADE OBSERVATIONS ABOUT LEGALITY & VALIDITY OF SOURCES O F THE GIFT. HOWEVER IT IS A SETTLED LAW THAT THE RECIPIENT HAS T O PROVE CREDITWORTHINESS OF THE DONOR ONLY IN RESPECT OF TRA NSACTION BETWEEN THEM. THE APPELLANT HAD DISCHARGED HIS ONUS OF PROVING SOURCES/ CREDITWORTHINESS OF THE DONOR BY PRODUCING CONFIRMATION, BANK STATEMENT, AUDITED BALANCE SHEET OF THE ALLEGE D CREDITOR COMPANY. FURTHER THERE WAS NO QUESTION RAISED BY TH E AO WHILE EXAMINING THE GENUINENESS OF TRANSACTION BETWEEN S UNNY DAL MILLS (P) LTD & THE DONOR. FURTHER THERE WAS NO CON CLUSION THAT TRANSACTION WAS MERELY NAME LENDING BETWEEN THE COM PANY & DONOR AND THERE WAS NOTHING ON RECORD TO SUGGEST THAT AMOUNT SO PASSED ON BETWEEN THE DONOR & COMPANY BELONGED T O THE APPELLANT. THE COMPANY WHICH ADVANCED MONEY TO THE DO NOR WAS REPUTED ONE & ALSO A RUNNING CONCERN. THESE FACTS W ERE DULY SUPPORTED BY THE HEAVY TRANSACTIONS IN BANK STATEME NTS AND AUDITED ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 8 REPORTS. THE AO HAD TRIED TO JUSTIFY HIS PRESUMPTIO N BY TAKING SHELTER UNDER THE FACT THAT THE DONOR WAS OUT OF IND IA & WAS NOT PRODUCED FOR EXAMINATION. SINCE THE DONOR WAS STAYI NG IN USA ALONG WITH HER SPOUSE AT 202, COUNTRY CLUB LANE, SCO TCH PLAIN, NEW JERSY, USA -07076. THEREFORE SHE COULD NOT BE PR ODUCED. THE APPELLANT HAD DISCHARGED HIS ONUS OF PROVING VALID GIFT BY PRODUCING GIFT DEED, BANK STATEMENT OF THE DONOR, PAN OF THE DONOR, PRESENT ADDRESS OF THE DONOR, CONFIRMATION ABOUT THE SOURCE S OF GIFT ALONG WITH BANK STATEMENT & AUDITED FINANCIAL STATEMENTS. SINCE THE ASSESSEE HAD DISCLOSED PERMANENT ACCOUNT NUMBER OF THE DONOR, HER BANK STATEMENT AND IMMEDIATE SOURCES OF GIFTS, THE IDENTITY AND CAPACITY OF THE DONOR WERE ESTABLISHED. FURTHER GIF T WAS RECEIVED THROUGH BANKING CHANNELS AND GENUINENESS OF THE TRA NSACTION WAS ALSO ESTABLISHED. THE BURDEN TO PROVE THAT APPARENT WAS NOT REAL LAY ON THE SHOULDER OF THE REVENUE. THE AO HAD NOT BROU GHT ANY MATERIAL ON RECORD TO FALSIFY THE CLAIM OF THE ASSE SSEE EXCEPT STATING THAT DONOR WAS NOT PRODUCED FOR EXAMINATION. ON THE OTHER HAND, THE ASSESSEE HAD PROVED THE SOURCES OF SOURCES OF T HE DONOR. IT IS WELL SETTLED LAW THAT WHILE CONSTRUING AN INSTRUMEN T, THE SURROUNDING CIRCUMSTANCES TO FIND OUT ITS TRUE NATURE AND THE R EALITY OF THE RECITALS MADE IN THE DOCUMENTS MUST ALWAYS BE CONSI DERED BUT IT DOES NOT MEAN THAT LEGAL RELATION RESULTING FROM SU CH TRANSACTION COULD BE IGNORED. THE APPELLANT HAD ESTABLISHED TRUTH OF THE RECITAL MADE IN THE GIFT DEED & OTHER STATEM ENTS BY PRODUCING BANK STATEMENTS OF THE DONOR, FULLY EXPLAINING THE SOURCES OF SOURCES OF THE DONOR BEFORE THE AO. IN THE CASE OF CIT VS SURESH KUMAR KAKAR (324 ITR 231) , THE MOTHER OF THE ASSESSEE HAD GIVEN GIFT OF RS 24.77 LAKHS TO HER SON. THE ASSESSEE HAD FILED HER ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 9 CONFIRMATION AND ALSO HER BANK ACCOUNT, YET THE AO TREATED IT AS UNEXPLAINED. IT WAS HELD BY HONOURABLE DELHI HIGH C OURT THAT THE CONCLUSIONS OF THE ASSESSING OFFICER AND CIT (APPEA LS) WITH REGARD TO THE GENUINENESS OF THE TRANSACTIONS WERE MERELY CONJECTURAL AND BASED ON SURMISES' AND ASSUMPTIONS. SUCH CONJECTURE S AND ASSUMPTIONS COULD NOT TAKE THE PLACE OF PROOF, ONCE THE ASSESSEE HAD DISCHARGED THE PRIMARY BURDEN WHICH HAD BEEN CAST UPON HIM. THE TRIBUNAL HELD THAT WHEN THE IDENTITY AND THE CAP ACITY WERE PROVED BEYOND DOUBT AND THE SOURCE OF THE GIFTS WAS THE MOTHER, THERE WAS NO QUESTION OF MAKING THE ADDITION UNDER S ECTION 68 OF THE ACT. IT WAS HELD THAT THE FINDINGS RECORDED BY THE TRIBUNAL DID NOT SUFFER FROM ANY PERVERSITY. 4.2 IN THE CASE OF ITO VS SNEHA GOYAL (2011-TIOL-210 -ITAT-KOLKATA), THE ASSESSEE CREDITED AN AMOUNT OF RS.34,33,189/- I N HER CAPITAL ACCOUNT OF THE PROPRIETORSHIP FIRM, M/S. SHREE TEXTI LES TOWARDS MATURITY AMOUNT OF INDIA MILLENNIUM DEPOSITS AS GIF T RECEIVED FROM SHRI ANAND SURANA DURING THE FY 2001-02. BEFOR E THE AO THE ASSESSEE FURNISHED THE COPY OF DECLARATION OF G IFT, COPY OF LETTER FOR TRANSFER OF SAID INDIA MILLENNIUM DEPOSI TS WITH STATE BANK OF INDIA DATED 27-11-2001, COPY OF PASSPORT FO R IDENTITY PROOF OF THE DONOR. HOWEVER, THE AO REQUIRED THE PER SONAL ATTENDANCE OF THE ASSESSEE REPEATEDLY, THE SAME WAS NOT COMPLIED WITH. IN THE FACTS AND AS THE DONOR WAS NOT RELATED TO THE ASSESSEE THE AO HELD THE GIFT TO BE FICTITIOUS AND ADDED THE IMPUGNED AMOUNT OF RS.34,33,189/- AS UNEXPLAINED CA SH CREDIT U/S.68 OF THE ACT. BEFORE CIT(A), THE ASSESSEE STAT ED THAT SHE HAD RECEIVED THE GIFT IN AND AROUND NOV 2001 OF INDIAN MILLENNIUM ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 10 DEPOSITS WORTH US DOLLARS 50,000 FROM SHRI ANAND SU RARANA OF DUBAI. THE SAID BONDS WERE TRANSFERRED AND REDEEMED I N A. Y.2006-07 BY S.B.I, NRI BRANCH, MUMBAI FOR RS 34 LA KHS. IN SUPPORT OF EVIDENCES, THE ASSESSEE SUBMITTED COPIES OF IMDS BONDS, COPY OF LETTER DATED 27.11.2002 ISSUED TO S. B.I.,NRI BRANCH, MUMBAI FOR THE REQUEST OF RECORDING THE GIF T, COPY OF LETTER DATED 03/12/2001 RECEIVED FROM SHRI ANAND SU RANA ENDORSING TRANSFER OF THE IMDS BONDS AND COPY OF DE CLARATION OF GIFT OBTAINED FROM SHRI ANANDA SURANA. THE CIT(A ) OPINED THAT IT WAS QUITE CLEAR THAT AMOUNT OF RS.34,33,189 /- WAS RECEIVED BY THE APPELLANT ON REDEMPTION OF INDIA MI LLENNIUM DEPOSIT RECEIVED BY HER FROM SHRI ANAND SURANA IN 2 001. IT WAS ALSO CLEAR THAT THE ASSESSEE AND THE DONOR WERE KNO WN TO EACH OTHER FOR A LONG PERIOD. HE, THEREFORE, HELD THAT T HERE WAS NOTHING ON RECORD TO HOLD THAT THERE WAS ABSENCE OF CLOSENESS BETWEEN THE ASSESSEE AND THE DONOR. ON THE BASIS OF EVIDENCE ON RECORD, IT WAS HELD BY HIM THAT IT COULD NOT BE S AID THAT THE APPELLANT HAD FAILED TO DISCHARGE THE ONUS CAST ON HER IN ESTABLISHING THE TRANSACTION OF GIFT AND THERE WAS NOTHING ON RECORD TO SUGGEST THAT THE ABOVE AMOUNT REPRESENTED ACCOMM ODATION ENTRY OF THE ASSESSEE'S OWN MONEY. HE, THEREFORE, H ELD THAT THE CASE LAWS RELIED ON BY THE AO WERE NOT APPLICABLE A ND DELETED THE IMPUGNED ADDITION OF RS.34,33,1897-. BEFORE THE TRI BUNAL, IT WAS ARGUED THAT THE DONOR WAS ONLY 32 YEARS OLD WHEN TH E SO-CALLED GIFT WAS MADE TO THE ASSESSEE. IT WAS ALSO NOT KNOWN AS T O HOW HE ACCUMULATED SUFFICIENT FUNDS SO AS TO GIVE A GIFT O F US DOLLARS 50,000 WORTH IN INDIA MILLENNIUM DEPOSIT CERTIFICAT E. IT WAS, THEREFORE, CONTENDED BY THE DEPARTMENT THAT THE DON OR DID NOT HAVE ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 11 THE CREDITWORTHINESS AND THE AO HAD RIGHTLY ADDED T HE IMPUGNED AMOUNT OF RS.34,33,159/- U/S 68 OF THE ACT . RELIANCE WAS PLACED ON THE HON'BLE APEX COURT'S DECISION IN THE CASE OF CIT VS. P MOHANA KALA (291 ITR 278). IT WAS HELD BY HON' BLE KOLKATA TRIBUNAL THAT THERE WAS AMPLE EVIDENCE AVAILABLE ON RECORD TO SUPPORT ASSESSEE'S CLAIM THAT THE GIFT OF INDIA MIL LENNIUM BOND WAS GIVEN TO THE ASSESSEE. IT WAS NOT THE CASE OF THE R EVENUE THAT DURING THE PREVIOUS YEAR 2005-06 THE ASSESSEE HAD ROUTED H ER UNDISCLOSED MONEY IN THE SHAPE OF THE SAID GIFT. THERE WAS NO E VIDENCE ON RECORD TO SUGGEST THE SAME. THERE WAS NO DISPUTE TH AT THE SAID AMOUNT WAS RECEIVED BY THE ASSESSEE ON REDEMPTION O F INDIA MILLENNIUM DEPOSIT. THE COPY OF THE CHEQUE T FOR RECEIVING THE SAID AMOUNT FROM SBI, NRI BRANCH, MUMBAI HAD BEEN FURNIS HED BY THE ASSESSEE. IN THIS VIEW OF THE MATTER, IT WAS HELD T HAT IT COULD NOT BE SAID THAT THE CREDIT OF THE SAID AMOUNT IN THE ASSE SSEE'S BOOKS OF ACCOUNT WAS NOT PROPERLY EXPLAINED IN TERMS OF SECT ION 68 OF THE ACT. THUS, IT WAS HELD THAT THE AMOUNT COULD NOT BE ADDED U/S. 68 OF THE ACT. THE GROUNDS TAKEN BY THE REVENUE WERE, T HEREFORE, REJECTED. IN THE CASE OF ITO VS SMT RUKSHANA S CONT RACTOR (2010- TIOL-32-ITAT-MUMBAI), THE AO NOTICED THAT THE ASSESSEE HAS SHOWN IN CAPITAL ACCOUNT AN AMOUNT OF RS. 70,20,529 7- RECEIVED AS GIFT. THE GIFTS AMOUNTING TO RS. 68 LAKHS WERE RECE IVED BY THE ASSESSEE FROM HER HUSBAND MR. SIRAJ KUMAR, CONTRACT OR WHO WAS NRI AND DOING BUSINESS IN DUBAI. ANOTHER GIFT OF RS . 2,27,5297-WAS RECEIVED BY THE ASSESSEE FROM HER BROTHER MR. MANSO R SUTERWALA, WHO WAS RESIDING IN USA. THE ASSESSEE FURNISHED CONFI RMATION AND OTHER DETAILS BEFORE THE AO. THE AO WAS OF THE VIEW THAT THE ASSESSEE HAD FAILED TO PROVE CREDITWORTHINESS, AND CAPACITY OF THE ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 12 DONORS TO MAKE GIFTS. THE AO MADE THE ADDITION U/S 68 OF THE ACT. THE CIT(A) AFTER EXAMINING THE ISSUE IN DETAIL AND HELD THAT THE ASSESSEE HAD PROVED ALL THE INGREDIENTS, SUCH AS, I DENTITY, GENUINENESS AND CREDITWORTHINESS OF THE DONORS. IT WAS OBSERVED BY CIT(A) THAT THE OPENING BALANCE IN THE CAPITAL ACCO UNT OF THE DONOR HUSBAND WAS AT RS. 1,34,02,8687-. AFTER ADJUSTING T HE WITHDRAWALS FOR THE YEAR WHICH INCLUDED GIFTS OF RS. 68,00,0007 - TO HIS WIFE (APPELLANT) AND RS. 54,00,0007-, HE STILL HAD ABOUT RS. 90 LAKHS LEFT IN BALANCE. THE DONOR WAS REGULARLY ASSESSED TO IN INDIA IN WARD- 19(L)(4). THE FINANCIAL CAPACITY OF THE DONOR WAS A MPLY DEMONSTRATED. THE BUSINESS INCOME OF THE DONOR IN T HE RELEVANT YEAR WAS AN IRRELEVANT CONSIDERATION. THE OTHER RELATED OBSERVATION OF THE AO THAT THE PERSONAL INCOME AND EXPENDITURE SHOWED LOSS OF RS. 43 LAKHS WAS NOT BORNE OUT BY FACTS BROUGHT ON R ECORD. IN FACT AMOUNT OF RS. 43.16 LAKHS REPRESENTED EXCESS O F WITHDRAWAL OVER INCOME WHICH INCLUDED RS. 1.22 CRORES AS GIFTS GIVEN. THE FACT OF GIVING GIFTS WAS DEMONSTRATED IN THE STATEMENTS. COMING TO THE SMALL GIFT RECEIVED FROM THE BROTHER IN USA, IT WAS OBSERVED THAT THE APPELLANT HAD FILED AN AFFIDAVIT GIVING FULL DE TAILS, CHEQUES, ETC. IT WAS SWORN STATEMENT MADE IN USA BY THE DONOR (BROTH ER). THE COPY OF INCOME TAX RETURN OF MR. MANSOOR SUTERWALA FOR 2005-06 BEFORE THE AUTHORITIES IN USA WAS ALSO FILED WHICH SHOWED RETURNED INCOME OF $ 69,400 WHICH WHEN CONVERTED INTO INDIAN CURRENCY CAME TO ABOUT RS. 31.58 LAKHS. WHAT THE DONOR GIFTE D WAS $5000 ONLY WHICH WAS LESS THAN 8% OF HIS TOTAL INCOME EAR NED. SINCE THE AO DID NOT ISSUE ANY NOTICE OR SUMMONS TO THE DONOR S WHO COULD NOT BE PRODUCED BY THE ASSESSEE, IT COULD NOT BE IN FERRED THAT THE DONORS DID NOT RESPOND TO THE NOTICE. THERE WAS NO DENIAL OR ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 13 REPUDIATION BY ANY DONOR THAT THEY HAD NOT GIVEN AN Y GIFTS TO THE APPELLANT. MOREOVER, THE GIFTS HAD BEEN GIVEN BY TH E HUSBAND TO HIS WIFE AND BY A BROTHER TO HIS SISTER. IT WAS A N ATURAL INSTINCT TO GIVE GIFTS TO THE CLOSELY RELATED PERSONS. BOTH THE DONORS WERE DIRECTLY AND CLOSELY RELATED TO THE APPELLANT. THER E WAS NOTHING ON RECORD NOR INVESTIGATED BY THE AO THAT THERE WAS AN Y CONSIDERATION FOR MAKING THE GIFTS. THE CIT(A) HELD THAT THE APPEL LANT HAD FULFILLED ALL THE PROPOSITIONS OF A LAW IN THE CONT EXT OF SECTION 68 OF THE ACT WHICH WAS BASED ON DISTILLATION OF THE PREC EDENTS ON THE SUBJECT. THERE WAS HARDLY ANY ADVERSE MATERIAL TO I NFER OTHERWISE THAT THE GIFT WAS NON-GENUINE. AS SUCH THE ADDITION ON BOTH THE ACCOUNTS AMOUNTING TO RS. 70,27,5297-WAS DELETED BY CIT(A).THE HON'BLE MURNBAI TRIBUNAL HELD THAT THE ASSESSEE HAD FURNISHED SUFFICIENT EVIDENCE AND ESTABLISHED THE CREDITWORTH INESS OF THE DONORS. IN THE LIGHT OF THIS DISCUSSION, THE ORDER OF CIT(A) WAS CONFIRMED AND THE GROUNDS RAISED BY THE REVENUE IN THIS REGARD WERE DISMISSED. IN THE CASE OF CIT VS KUSUM GUPTA ( 2010- TIOL-519-HC-DELHI), IT WAS HELD BY HON'BLE DELHI HIGH COURT THAT THE GENUINENESS OF THE TWO GIFTS WAS ESTABLISHED IN AS MUCH AS REGISTERED GIFT DEEDS WERE PRODUCED BUT ALSO THE ST ATEMENTS OF TWO DONORS ALONG WITH THE ASSESSEE WERE RECORDED. IN F ACT, THE TRIBUNAL IN THE IMPUGNED ORDER HAD CONCLUDED ON FAC TS THAT THE IDENTITY AND CREDITWORTHINESS OF THE DONORS WAS PRO VED BEYOND DOUBT. AS GIFTS WERE MADE BY WAY OF REGISTERED GIFT D EEDS AS WELL AS PAYMENTS WERE MADE BY WAY OF ACCOUNT PAYEE CHEQUES AND BOTH THE DONORS WERE INCOME TAX ASSESSES, IT COULD N OT BE SAID THAT THE GIFTS WERE NOT GENUINE. RESULTANTLY, THE AP PEAL WAS DISMISSED IN LIMINE. IN THE CASE OF MURLIDHAR LAHOR IMAL VS CIT ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 14 (280 ITR 512), THE ASSESSEE, AN INDIVIDUAL, FILED A RETURN OF INCOME ACCOMPANIED BY A COPY OF HIS CAPITAL ACCOUNT IN THE PARTNERSHIP FIRM WHERE HE WAS A PARTNER. THE CAPITAL ACCOUNT CONTAINED A CREDIT ENTRY SHOWING A SUM OF RS. 50,000 AS GIFT RECEIVED. THE ASSESSMENT WAS MADE ACCEPTING THE GIFT BUT NOTICE WAS SUBSEQUENTLY ISSUED UNDER SECTION 148 ON THE GRO UND THAT THE GIFT WAS NOT GENUINE AND THE AMOUNT OF RS. 50,0 00 WAS ASSESSABLE UNDER SECTION 68. THE TRIBUNAL FOUND THA T THE GIFT WAS GIVEN BY WAY OF BANK DRAFT, THE DONOR HAD CONFIRMED THE FACT OF HAVING MADE THE GIFT. HE PRODUCED EVIDENCE IN SUPPO RT OF THE SOURCE FROM WHICH THE FUNDS FOR MAKING THE GIFT WERE AVAILABLE WITH HIM. THE TRIBUNAL HOWEVER HELD THAT THE MOTIVA TION FOR MAKING THE GIFT WAS NOT ESTABLISHED. IT UPHELD THE A DDITION. ON A REFERENCE, IT WAS HELD BY HON'BLE GUJARAT HIGH COURT THAT THE TRIBUNAL FAILED TO NOTE THE FACT THAT THE IDENTITY O F THE DONOR WAS ESTABLISHED, THE DONOR HAD CONFIRMED THE FACT OF GI VING GIFT BEFORE THE ASSESSING OFFICER, THE GENUINENESS OF TH E TRANSACTION WAS ESTABLISHED, NOT ONLY BY THE RECEIPT OF THE BANK DRAFT, BUT ALSO BY THE FACT OF THE TRANSACTION HAVING BORNE GIFT TA X ONCE THE ASSESSMENT WAS FRAMED. THE PRIMARY ONUS WHICH RESTED WITH THE ASSESSEE, THUS, STOOD DISCHARGED. THEREAFTER, IF TH E REVENUE WAS NOT SATISFIED WITH THE SOURCE OF THE FUNDS IN TH E HANDS OF THE DONOR, IT WAS UP TO THE REVENUE TO TAKE APPROPRIATE ACTION. THE TRIBUNAL CONSIDERED THE MOTIVATION FOR MAKING THE G IFT WHICH WAS NOT RELEVANT. THE ADDITION OF RS. 50,000 WAS HELD TO BE NOT JUSTIFIED. IN THE CASE OF ITO VS SANJAY KUMAR GOEL (108 TTJ 823), THE ASSESSEE IN THE REASSESSMENT PROCEEDINGS FILED COPIES OF GIFT DEEDS, ACKNOWLEDGEMENT OF RETURN OF INCOME ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 15 AND STATEMENT OF BANK ACCOUNTS OF THE DONORS. THE GI FTS HAD BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND ALL THE DONORS WERE ASSESSED TO INCOME-TAX. THE ASSESSEE WAS ASKED TO P RODUCE THE DONORS FOR EXAMINATION BY THE ASSESSING OFFICER . THE ASSESSEE FAILED TO PRODUCE THE DONORS. HOWEVER, AFF IDAVITS OF THE DONORS WERE RECEIVED BY POST BY THE ASSESSING OFFIC ER. FROM A PERUSAL OF THESE AFFIDAVITS, THE ASSESSING OFFICER NOTICED THAT SOME PAPERS ON WHICH THE AFFIDAVITS WERE TYPED WERE PURCHA SED ON 23.03.2002 AND THE AFFIDAVITS HAD BEEN MADE ON THE SAME DAY. THE ASSESSING OFFICER ALSO NOTICED THAT THE DONORS WE RE RESIDENTS OF DELHI AND THERE COULD NOT BE ANY DIFFICULTY IN P RODUCING THEM FOR EXAMINATION. THE GIFTS HAD COME TO THE ASSESSEE DURING THE YEAR WHEN HE MADE INVESTMENT IN GDA FOR PURCHASE OF PLOTS C- 28 AND C-43 AND PURCHASE OF LAND AT DASNA. ALL THE ALLEGED DONORS WERE RESIDENTS OF DELHI AND AS PER STATEMENT OF INCOME FURNISHED, THEY HAD INCOME IN THE RANGE OF RS. 50,0 00 TO RS. 60,000 FOR THE ASSESSMENT YEAR 1999-2000, WHICH, IN ANY CASE, MIGHT BE INSUFFICIENT TO MEET THEIR BASIC AND SOCIA L NEEDS AT DELHI. ONLY ONE PERSON HAD INCOME AROUND RS. 1,00,0 00. THE ASSESSING OFFICER, THEREFORE, HELD THAT THE ASSESSE E HAD FAILED TO DISCHARGE THE ONUS OF ESTABLISHING THE GENUINENESS OF THE GIFTS. THE COMMISSIONER (APPEALS) HELD THAT THE ASSESSEE HA D PRODUCED ENOUGH EVIDENCE TO JUSTIFY THE GIFTS IN QU ESTION AND THAT THE ASSESSING OFFICER HAD REJECTED THE PLEA OF THE ASSESSEE WITHOUT ANY MATERIAL. THE COMMISSIONER (APPEALS), THE REFORE, CONCLUDED THAT THE GIFTS WERE EXPLAINED BY THE ASSE SSEE AND THERE WAS NO JUSTIFICATION FOR MAKING THE ADDITION B Y THE ASSESSING OFFICER. IT WAS HELD BY HON'BLE TRIBUNAL IN THE CIT ED CASE THAT ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 16 THE ASSESSEE IN DISCHARGE OF HIS BURDEN OF PROOF UN DER SECTION 68 OF THE ACT HAD FILED GIFT DEEDS OF ALL THE 10 DONOR S. THE ASSESSEE HAD ALSO FURNISHED THE INCOME-TAX PARTICULARS OF AL L THE 10 DONORS. IT WAS NO DOUBT TRUE THAT THERE WERE SOME P ECULIARITIES IN THESE GIFTS, NAMELY, THEY WERE ALL FOR A SUM OF RS. 1.00,000 EACH. THE GIFT DEEDS DID NOT SET OUT THE OCCASION F OR MAKING THE GIFTS. THE ABOVE CIRCUMSTANCES CERTAINLY RAISED A S USPICION ABOUT THE NATURE AND SOURCE OF THE GIFTS. BUT, THIS SUSPICION ALONE COULD NOT FORM THE BASIS FOR COMING TO A CONCLUSION THAT THE NATURE AND SOURCE OF THE GIFTS REMAINED UNEXPLAINED . THE DONORS HAD FILED AFFIDAVITS DULY NOTARIZED WHEREIN THEY HA D EXPLAINED THAT THEY WERE MAKING THE GIFTS OUT OF LOVE AND AFF ECTION, WHICH THEY HAD TOWARDS THE ASSESSEE. THEY HAD ALSO EXPLAIN ED THEIR SOURCE OF FUNDS IN THEIR AFFIDAVITS. ACCORDINGLY IT WAS HELD THAT COMMISSIONER(APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO AND ORDER OF COMMISSIONER DID NOT CA LL FOR ANY INTERFERENCE. 4.3 IN PRESENT CIRCUMSTANCES, I AM INCLINED TO HOL D THAT THE ASSESSEE HAS DISCHARGED THE INITIAL BURDEN TO PROVE THE GIFTS AND THEREAFTER THE BURDEN DID SHIFT TO THE AO WHO ALSO S EEMS TO HAVE TAKEN NECESSARY STEPS BY ISSUING SUMMONS TO M/S SUN NY DAL PVT LTD WHO HAD ISSUED THE CHEQUES TO THE DONOR. THUS E VEN SOURCE OF SOURCE STANDS PROVED IN THE PRESENT CASE. ON THE EVIDENCE ADDUCED BY THE APPELLANT, IT IS DIFFICULT TO DOUBT THE CREDITWORTHINESS OF THE DONOR AND THE SOURCES OF TH E GIFT AND THE GENUINENESS OF THE TRANSACTION. THE APPELLANT HAD P RODUCED BEFORE AO ALL EVIDENCES WHICH WERE NECESSARY FOR ESTA BLISHING ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 17 TRUTHFULNESS OF THE TRANSACTIONS. FURTHER THERE IS NOT AN IOTA OF EVIDENCE ON RECORD TO PROVE THAT ASSESSEE WAS THE O WNER OF FUNDS HENCE NO ADDITION COULD BE MADE. THE ALLEGATI ON OF THE AO THAT AMOUNT ADVANCED BY THE COMPANY TO THE DONOR BELONGED TO THE APPELLANT WAS SUPERFICIAL AND THERE WAS NO MATERIAL ON RECORD TO PROVE THE SAID ALLEGATION. IN ADDITION TO ESTABLISHING THE IDENTITY OF THE DONOR AND THE FACT THAT THE MONIES CAME THROUGH BANK ACCOUNTS, THE ASSESSEE WAS ABLE T O DISCHARGE THE INITIAL BURDEN OF SHOWING THE SOURCE OF THE GIF T AND THE FINANCIAL CAPACITY OF THE DONOR AND WAS ALSO ABLE TO POINT OUT THAT THE DONOR WAS ALSO ASSESSED TO INCOME-TAX. THE DONOR WAS DAUGHTER OF THE APPELLANT AND NOT A STRANGER. ONCE THE DONOR WAS RELATED TO THE ASSESSEE AND THERE WAS A DAY-TO-DAY ACQUAINTANCE WITH THE ASSESSEE, AS IN THE PRESENT CASE, UNLESS I T WAS SHOWN THAT IT WAS ONLY A PRETENCE AND NOT A NATURAL PHENO MENON, THE EXISTENCE OF INGREDIENTS OF LOVE AND AFFECTION COUL D NOT BE RULED OUT. LOVE AND AFFECTION CAN BE REFLECTED BY FREQUEN T ACQUAINTANCE, MUTUAL EXCHANGES OF GIFTS, MUTUAL HELP TO EACH OTHE R STANDING FOR EACH OTHER IN HOURS OF NEED, AND OTHER SIMILAR FACT ORS. ONCE THE ASSESSEE HAD SHOWN THAT THE DONOR WAS RELATED TO HI M AS FATHER & DAUGHTER AND THEY WERE CLOSE FAMILY MEMBERS, THEN THE ONUS SHIFTED ON THE AO TO SHOW THAT WHAT WAS PRETENDED TO BE A CASE OF NATURAL LOVE AND AFFECTION WAS NOT BORNE OUT FRO M FACTS. SUCH FACTS WERE REQUIRED TO BE EXTRACTED BY THE AO EITHER BY ENQUIRIES OR BY RECORDING STATEMENTS OF DONOR/DONEE /OTHER WITNESS OR BY WHATEVER MEANS LAWFUL, HE CONSIDERED NECESSARY. REJECTING THE CLAIM OF NATURAL LOVE AND AFFECTION W HICH WAS OTHERWISE APPARENT AS IN THE PRESENT CASE WITHOUT T HERE BEING ANY ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 18 MATERIAL ON RECORD WOULD NOT BE JUSTIFIED. THE ASSES SEE WAS NOT EXPECTED TO BRING MATERIAL AND EVIDENCE BY FORESEEI NG AS TO WHAT WOULD SATISFY THE ASSESSING OFFICER. HE IS EXPECTED TO PRODUCE EVIDENCE WHICH ANY NORMAL PRUDENT AND INTELLIGENT P ERSON IS REQUIRED UNDER LAW TO PRODUCE. IF PRIMA FACIE EVIDE NCE PRODUCED BY THE ASSESSEE WAS ACCEPTABLE, THEN THE ONUS SHIFTED TO THE AO TO REBUT IT AND GIVE A FINDING BASED ON MATERIAL AND L EGAL INFERENCE, THAT EXPLANATION OF THE ASSESSEE WAS NOT SATISFACTO RY. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE PRES ENT CASE, I DIRECT THE AO TO DELETE THE ADDITION OF RS 15,00,15 37- MADE BY HIM. THIS GROUND OF APPEAL IS ALLOWED. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. 5. IT IS CONTENDED ON BEHALF OF THE DEPARTMENT THAT THE DONOR WAS NOT PRODUCED FOR PERSONAL EXAMINATION BEFORE THE ASSESS ING OFFICER NOR HER CORRECT ADDRESS, PRESENT WHEREABOUTS, DETAILS OF PA SSPORT WERE GIVEN FOR FURTHER EXAMINATION TO THE ASSESSING OFFICER. THE CR EDITWORTHINESS OF THE DONOR AND GENUINENESS OF THE TRANSACTIONS HAD NOT B EEN ESTABLISHED BY THE ASSESSEE. THERE WAS NO OCCASION TO MAKE SUCH A HUGE G IFT AND GIFT MADE WITHOUT ANY OCCASION CANNOT BE HELD AS GENUINE GIFT AS HELD BY THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CHAIN SUKH RATH I VS. CIT 270 ITR 369 (RAJ.) THE GENUINENESS OF THE GIFT WAS NOT ESTABLISHE D BEYOND DOUBT CONSIDERING THE SURROUNDING CIRCUMSTANCES, PREVAILI NG PRACTICE/CUSTOM IN THE SOCIETY, DOUBTFUL NATURE OF THE TRANSACTIONS. THE LE ARNED ASSESSING OFFICER ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 19 FURTHER RELIED UPON THE DECISION IN THE CASE OF CIT VS. DURGA PRASAD MORE 82 ITR (SC) AND SUMATI DAYAL VS CIT 214 ITR 801 FOR PRINC IPLES OF HUMAN PROBABILITIES AND IT IS PRAYED TO CONFIRM THE ORDER OF THE LEARNED ASSESSING OFFICER. FROM THE SIDE OF THE ASSESSEE, NO ONE HAS APPEARED TO DEFEND HIS CASE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSEES DAUGHTER GAVE THE GIFT TO THE ASSESSEE. EARLIER, SHE RECEIVED AMOUNT OF RS. 15,03,657/- FROM LIC AND ENTIRE AMOUNT HAS BEEN WITHDRAWN BY HER. THE DAUGHTER OF THE ASSESSEE HAS MEA GER INCOME, THEREFORE, THE ASSESSEE HAS NOT ESTABLISHED THE CRE DITWORTHINESS OF THE DONOR. THE CIRCUMSTANTIAL EVIDENCE SHOWED THAT CHEQUES RECEI VED FROM M/S SUNNY DAL MILL PVT. LTD. AND IMMEDIATELY GIFT WAS GIVEN T O HER FATHER. IT IS NOT CLEAR FROM THE ORDER OF THE LEARNED CIT(A) WHETHER DONOR H AD DISCLOSED THIS AMOUNT IN THE ASSESSEES RETURN OR NOT. WHEN THE RETURNED INCOME IS MEAGER AND WHOSE AMOUNT RECEIVED FROM THE PRIVATE LIMITED COMPA NY, HAD NOT BEEN CLARIFIED BY THE ASSESSEE BEFORE THE ASSESSING OFFI CER. IT IS LEGAL PROPOSITION THAT COMPANY IS AN INDEPENDENT ENTITY BUT IT IS NOT CLEAR WHO IS THE DIRECTOR OF THIS COMPANY. AS THE HON'BLE SUPREME COURT HAD MADE PROPOSITION IN THE CASE OF DURGA PD. MORE (SUPRA) THAT APPLYING THE TEST OF HUMAN PROBABILITIES, HAD RIGHTLY CONCLUDED THAT THE APPELLANTS CASE HAS NOT MADE OUT BEYOND DOUBT. THEREFORE, IN THE INTEREST OF JUST ICE, WE SET ASIDE THIS ITA 979/JP/2011 ITO VS. HARI CHARAN SHARMA 20 ISSUE TO THE ASSESSING OFFICER TO MAKE DETAILED INV ESTIGATION ON CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS . ACCORDINGLY, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES ONLY. 7. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED F OR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 12/09/2014. SD/- SD/- (R.P. TOLANI) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR, DATED : 12 TH SEPTEMBER, 2014 * RANJAN COPY FORWARDED TO :- 1. THE ITO, WARD 6(3), JAIPUR. 2. SHRI HARI CHARAN SHARMA, JAIPUR. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NO. 979/JP/2011) BY ORDER, AR ITAT JAIPUR.