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of <h1>Tribunal decisions on unexplained gifts & incriminating material in reassessment proceedings</h1> <h3>Rawal Das Jaswani and Ors. Versus Assistant Commissioner of Income Tax</h3> Rawal Das Jaswani and Ors. Versus Assistant Commissioner of Income Tax - TMI Issues Involved:1. Legality of reassessment proceedings under Section 153A of the IT Act, 1961.2. Justification of additions made under Section 69A and Section 68 of the IT Act, 1961.3. Requirement of incriminating material found during the search for making additions.4. Proving genuineness and creditworthiness of gifts received.5. Disallowance of claims due to lack of supporting evidence.Detailed Analysis:1. Legality of Reassessment Proceedings under Section 153A:The appeals centered on whether reassessment proceedings under Section 153A should be confined to the material found during the search. The Tribunal admitted the additional ground of appeal, which was a legal issue, and noted that the relevant facts were already on record. The Tribunal referenced the Supreme Court decision in National Thermal Power Ltd. v. CIT to justify the admission of this ground.2. Justification of Additions under Section 69A and Section 68:The primary issue was the addition of Rs. 1,80,000 under Section 69A as unexplained gifts. The AO made this addition due to the assessee's failure to provide confirmation and prove the creditworthiness of the donors. The CIT(A) confirmed this addition. However, the Tribunal found that the AO had no jurisdiction to make such additions in the absence of incriminating material found during the search.3. Requirement of Incriminating Material Found During Search:The Tribunal emphasized that additions under Section 153A should be based on incriminating material found during the search. Since the original assessments had attained finality before the search and no incriminating material was found, the AO had no jurisdiction to make the additions. The Tribunal cited several precedents, including CIT v. Murli Agro Products Ltd. and Jai Steel (India) v. Asstt CIT, to support this position.4. Proving Genuineness and Creditworthiness of Gifts Received:The assessee failed to provide evidence of the genuineness and creditworthiness of the donors. The Tribunal noted that no confirmations were filed, and the donors were not produced for examination. The Tribunal held that without such evidence, the addition was justified. This position was upheld in ITA No. 91/Blpr/2009, where the assessee could not prove the genuineness of a Rs. 1,00,000 gift.5. Disallowance of Claims Due to Lack of Supporting Evidence:In ITA No. 88/Blpr/2009, the issue was the disallowance of Rs. 2,50,000 claimed as forfeiture of EMD by BPCL. The AO disallowed the claim due to a lack of supporting evidence, and the CIT(A) confirmed this disallowance. The Tribunal upheld this decision, emphasizing that the onus was on the assessee to provide material evidence to substantiate the claim.Conclusion:The Tribunal allowed the appeals related to the addition of unexplained gifts under Section 69A and Section 68 due to the lack of incriminating material found during the search. However, it dismissed the appeals where the assessee failed to provide supporting evidence for their claims. The judgments highlighted the importance of incriminating material in reassessment proceedings under Section 153A and the necessity for the assessee to prove the genuineness and creditworthiness of transactions.
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