TaxTMI 
TaxTMI 
2007 (11) TMI 328
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....Pankaj Jain by the assessee which was not found genuine by the AO. 2. deleting the addition of Rs. 40,68,450 and Rs. 22,03,850 made on account of claim of gift of property from Shri Ashok Jain and Veena Jain, respectively which were not found genuine by the AO." 4. Before adjudicating these grounds, we consider it proper to narrate the factual background and the orders passed by the Departmental authorities in relation to the main issues involved. The facts of the matter as culled out from the material brought on record, are as under: 4.1. The assessee filed return of her income for the assessment year under consideration declaring total income at Rs. 13,29,090. This income consisted of income from salary, house property, agriculture, fisheries and other sources. The return was filed on6th Aug., 2003. A notice under s. 143(2) was issued by the AO, in response to which necessary details were filed on behalf of the assessee. 4.2 A search was conducted by the officers of Narcotics Control Bureau on6th Aug., 2003, and during the course of search, from the premises belonging to M/s Manu Tours and Travels, a concern, owned by Shri Raj Kumar, the brother of the assessee,....
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....during various years to the assessee and her family members was out of the amount received from M/s Blue Bells Finance Co. After recording this fact, the AO also observed that it is surprising that the donor made gifts out of the loan taken from this concern. Further, the AO observed that there was no occasion for making the gift as there was no relationship between the donor and the donee. According to him, the gift was an arranged gift and was only an accommodation entry. For disbelieving the gift, he also made reference to the decision in the case of Sreelekha Banerjee vs. CIT (1963) 49 ITR 112 (SC) and the decision in the case of Seth Kalekhan Mahomed Hanif vs. CIT (1958) 34 ITR 669 (MP) and the decision in the case of CIT vs. Krishna Mining Co. (1972) 83 ITR 860 (AP). He further, held that the burden of proving the source of the credit entries was on the assessee, and once the entry is found in the books of account of the assessee then she was under legal obligation to explain the nature of such entry and that the AO is not required to specifically prove as to what was the source from which the deposit was made. He further concluded that merely establishing the identity of the....
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....excluded from the total income under this Act shall be chargeable to income-tax under the head 'Income from other sources', if it is not chargeable to income-tax: under any the heads specified in s. 14, items A to E.' In this case there is no doubt that the assessee has received the following amounts during the year under consideration: 1. Cash Rs. 2,00,000 2. Immovable properties worth Rs. 62,72,300 This section clearly states that income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income-tax under the head income from other sources if it is not chargeable to income-tax under the head specified in s. 14, items A to E. The assessee has offered an explanation that since it is a gift it is not chargeable under s. 68 of the IT Act. Sec. 68 of the IT Act, states that where any amount is found credited in the books of an assessee maintained for any previous year..... shall be charged to income-tax as income of the assessee of that previous year. There is no doubt that the amount has been found credited in the books maintained by the assessee for her business activity and, therefore, the cash....
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....fts as genuine and rejected three gifts as non-genuine without distinguishing the main features of these gifts. This only demonstrates a self contradictory and inconsistent approach of the AO. 4.10 The assessee challenged the additions made by the AO before the learned CIT(A). During appellate proceedings, the learned CIT(A) obtained a remand report from the AO to know the net worth of the donors. On the basis of this remand report, the net worth of the three donors whose gifts were not accepted, was found to be as under: (i) Shri Ashok Jain Rs. 1,14,74,817 (ii) Smt. Veena Jain Rs. 1,32,14,312 (iii) Shri Pankaj Jain Rs. 1,36,01,314 4.11 After reproducing the above figures on p. 3 of his order, the learned CIT(A) has observed that net worth of Shri Ashok Kumar Jain, was Rs. 1,14,74,817 who gifted immovable property worth Rs. 40,68,450. Net worth of Smt. Veena Jain was Rs. 1,32,14,312 who gifted Rs. 22,03,850 and net worth of Shri Pankaj Jain was Rs. 1,36,01,314 who made gift of Rs. 2,00,000. 4.12 The learned CIT(A) has considered the entire material in great detail in the appellate order. He has narr....
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....ft. On these grounds the observations of the learned CIT(A) are as under: "Before proceeding, further, it would not be out of place to highlight the fact that on one hand the AO has rejected the gifts of Shri Ashok Jain, Smt. Veena Jain and Shri Pankaj Jain on the ground that the donor and donee were not related, but on the other hand the AO in the same assessment proceedings, has accepted the gifts of Shri O.P. Khadaria and Shri Ajay Agarwal where also there was no "occasion" to make gift. The donor and donee were also not related to each other and natural love and affection, between the donor and the donee, arose on account of man made relationship. It is also not a requirement, of either of the GT Act or the Transfer of Property Act that a gift can only be made 'on an occasion' and the donor and the donee must be relatives. I hold so based on the decisions in M.S. Aggarwal vs. Dy. CIT (2004) 83 TTJ (Del) 692 and Asstt. CIT vs. Hansa Chaganlal (2003) 79 TTJ (Visha1cha) 992. In view of the above, I am of the opinion that the gifts received by the assessee cannot be questioned on the ground of no 'occasion' and no 'relationship'. It would also be re....
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....nd the creditworthiness of the donor was discharged by the assessee the onus shifted on the AO to prove if he so alleges, that it was on the contrary an investment of the assessee. For this view I rely on the following judicial pronouncement. CIT vs. Daya Chand Jain Vaidya (1975) 98 ITR 280 (All) Not only that. I am also of the opinion that when a particular explanation furnished by the assessee and evidence in support thereof is adduced, the onus shifts on the AO to falsify the said material or bring new material on record. Mere rejection of good explanation does not convert good proof into no proof. For this proposition I derive sanction from: Sreelekha Banerjee vs. CIT (1963) 49 ITR 112 (SC) 152 ITR 504 (Del) (sic) Further, the AO's rejection of the explanation offered by the assessee as well as the inference as to the genuineness of the gift and creditworthiness of the donor cannot by itself lead to any inference regarding the non-genuineness of the gift, unless some tangible material, or some evidence is led in support of his claim that the property gifted was assessee's income earned from undisclosed sources. On this count also the AO has failed mise....
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....ed accountant by profession and is assessed to tax since last so many years. I find that he has placed details of his income-tax assessment and bank account, and has also filed affidavit certifying the above gift. He has also appeared before the AO for statement on oath where again he has confirmed giving of the gift. He has also established that he has been meeting the assessee, and his family members, on family functions since last so many years. I also find that he has given the gift vide account payee cheque No. 171816, dt.17th Dec., 2002drawn on Andhra Bank for Rs. 2,00,000. I also agree with his submissions that reciprocation of gifts is not mandatory and his creditworthiness has been accepted now by the AO himself in the remand report. I also find that AO has erred in giving a finding that gift was given in 'cash', and also that entire gift was made out of amount received from 'M/s Blue Bell Finance Co.' when in fact the gift has been given through account payee cheque, and out of repayment of deposits of the donor lying with the said M/s Blue Bell Finance Co. In the light of the above, the genuineness of the gift is conclusively established, inasmuch as the ....
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....is not books of account, hence, addition under s. 68 cannot be made. I am also of the opinion that as the gifts cannot be charged under s. 68, the AO has tried to take shelter under s. 56 of IT Act by stating in the assessment order that the gifts are charged under s. 68/69 r.w.s. 56(1). While doing so he has forgotten that ss. 68 and 69 are deeming provisions and not charging sections. So they cannot be read together. And this is not a case where s. 56 would apply as the assessee is not having any income from other sources. Keeping in view the totality of facts the addition of Rs. 2,00,000 is also deleted, as the gift is genuine." 5. The learned Departmental Representative has supported the grounds of Revenue for challenging the order of the learned CIT(A) and for this purpose he has mainly placed reliance on the order of AO. 6. The assessee on the other hand has filed paper books which contains copies of various documents which are available on the file of the AO and CIT(A) and case laws. 6.1 The assessee has also filed synopsis of submissions consisting of 17 pages. For supporting the order of the learned CIT(A) the assessee has also placed reliance on the various autho....
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....not been found to be benami or sham in law; (ix) The AO has not made any enquiries by examining the witnesses of the registered gift deed. 7.2 In the setting of factual background narrated as above and in the context of the undisputed facts recorded as above, we consider it proper to discuss the nature of gifts received by the assessee and the findings of the Departmental authorities in relation thereto for deciding the grounds of appeal taken before us. 7.3 As the issue involved in both the grounds of appeal relates to genuineness of gift of movable and immovable properties, we deem it proper to consider the requirement of law in relation to validity of such gifts. 7.3.1 In this regard we consider it necessary to refer to Chapter VII of the Transfer of Property Act. 1882 which deals with gifts of movable and immovable properties. Sec. 122 defines 'gift' as under: "122. Gift defined 'Gift' is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. Acceptance when to be made. S....
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....provisions of s. 123 Transfer of Property Act. There is no warrant for saying that the law contained in s. 123 Transfer of Property Act does not apply when an IT authority has to decide whether there was a gift or not. Consequently, there has to be a delivery, if a gift is not made by a registered document. A question may arise whether a certain act done by the alleged donor amounts to delivery of property to the alleged donee but it cannot be said that delivery is not required at all." 7.8 The definition of gift is not given in the IT Act. In general terms, gift consists in the relinquishment of one's own right of the property and creation of the right in another in that property. This concept is in consonance with the definition of gift given in para 355 of the Principles of Hindu Law by Mulla which defines gift as under: "355. 'Gift' defined Gift consists in the relinquishment (without consideration) of one's own right (in property) and the creation of the right of another; and the creation of another man's right is completed on that other's acceptance of the gift, but not otherwise." 7.9 The definition of gift as given in Hallsbur....
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....nition given in Indian Contract Act. It is indisputable that a transfer in consideration of natural love and affection is not a transfer for consideration with the meaning of s. 2 of the Contract Act. Under the law a consideration must be a good and valuable consideration. Therefore gratuitous consideration such as natural love and affection or obedience and submission by way of respect or love may at best be a meritorious or a gratuitous consideration and in no case can be a good consideration or a valuable consideration. See Patridge vs. Cobb (1). In English law the term 'consideration' bears the meaning given to it in the classical judgment of Currie vs. Misa (2). Although Indian Contract Act does not say that consideration must be good or valuable to sustain a contract, it has, however always been understood that consideration means something which is of some value and is not illusory. In the light of what I have said above, it is clear that a gift being not for consideration the question of applying the proviso does not apply. The proviso applies only to a transfer which has been made on good faith and for adequate consideration. It is important to note that the expres....
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....ontents of this affidavit are true and correct to the best of my knowledge and belief. Verified this on 7th day of Dec., 2002 atGhaziabad. Signature unreadable (Pankaj Jain) Deponent" 7.15 Statement of Shri Pankaj Jain was also recorded on30th Dec., 2005on oath by the Asstt. CIT, Central Circle-II. In his statement also he has again categorically deposed that he made the gift out of natural love and affection. This is stated by him in reply to question No. 12. The question put to him and the reply is reproduced as under: "Q. No. 12: What were the circumstances under which the gifts were given by you? Answer: Out of natural love and affection. And regard for work done by her towards downtrodden society and in view of her stature being/may be helpful in future." In reply to question No. 14, he stated as under: "Q. No. 14: Whether any documentary evidence was created at the time of gift? If yes, the reasons there of? Answer: Yes, gift deed executed." 7.15.1 His relationship with the assessee is given in answer to question No. 17, which is as under: "Q. No. 17: Your statement on oath was rec....
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.... in my bank account vide letter dt.19th Dec., 2003. Q. No. 28: On what occasions gifts were made to Ms. Mayawati and her family members? Ans: The above gifts have been made at my will, not at any specific occasion." 7.16 The donor is a chartered accountant. His qualification is B.Com., FCA. He was filing IT return since 1994. His net worth as reported by the AO to the learned CIT(A) is Rs. 1,36,01,314. 7.17 In view of the above documentary and oral evidence on record, the requirement of law for establishing a validly executed gift of movable properties are fully satisfied inasmuch the donor gifted the amount voluntarily to the donee and has delivered the possession of the gifted property to the donee. 8. Coming to the gift of immovable properties, we have to examine the documentary evidence filed by the assessee and available on record. 9. Gift of property bearing No. C-58, Inderpuri,New Delhi-The gift deed which is a registered document, has been filed by the assessee in the paper book and is available at pp. 7 to 23. The donor and the donee both have signed this deed. The gift was executed in the presence of two witnesses who have signed the deed. Ph....
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....our of the donee absolutely and forever but without any monetary consideration and is therefore executing this gift deed. Now this deed witnesseth Gift 1. The donor hereby irrevocably, absolutely and forever gifts, transfers and conveys the said entire freehold property bearing No. C-58, constructed on freehold plot No. C-58, measuring 500 sq. yds. with terrace rights, situated in the area of the village Naraina in the abadi of an approved colony, Inderpuri,New Delhiand in favour of the donee out of her love and affection. The donor transfer the said property to the donee by way of gift together with all the liberties, privileges, easements and advantages appurtenant thereto. 2. That the transfer hereunder include the transfer of all the rights of the donor over in the said entire freehold property bearing No. C-58, constructed on freehold plot No. C-58, measuring 500 sq. yds, with terrace rights. situated in the area of the village Naraina in the abadi of an approved colony, Inderpuri,New Delhito the donee. That the donee shall be entitled to cause the mutation of the said property done in the concerned authority in her own name. 3. Tha....
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.... Signature unreadable Deponent Statement of this donor was recorded on4th Nov., 2003for the first time by the Addl. Director of IT (Inv.). To clinch the issue we consider it proper to reproduce, questions and answers Nos. 16 to 32 to show that she made the gift voluntarily and out of reverence and love and affection to the donee. The relevant portion of the statement is as under: Hindi Phrases.... 9.2 Her statement was again recorded on26th Dec., 2005and she stated in reply to question No. 12 that she made the gift out of natural love and affection. To clinch the issue we consider it proper to reproduce question and answers from question Nos. 11 to 14, which are as under: "Q. No. 11: Please explain sources of gifts made by you? Answer: Is being submitted separately. Q. No. 12: What were the circumstances under which the gifts were given by you? Answer: Out of natural love and affection. Q. No. 13: Do you have any correspondence with the donees? Answer: On personal meetings as well as on te....
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....nd there is no impediment in transferring the same. In the above manner the donor became the sole and absolute owner of the entire freehold property bearing No. C-57, measuring 500 sq. yds., out of Khasra No. 1651 situated in the abadi of an approved colony, Inderpuri, New Delhi for his bona fide needs and requirements with undivided, indivisible an impartiable ownership rights in the said plot of land with absolute and unfettered powers to deal with the same in any manner he likes at his sole discretion. Whereas the donor out of his natural love and affection for the donee, is desirous of making a gift of the entire freehold property bearing No. C-57, constructed on freehold plot No. C-57, measuring 500 sq. yds., with terrace rights, situated in the area of the village Naraina in the abadi of an approved colony, Inderpuri, New Delhi undivided, indivisible and impartiable ownership rights in the said plot of land in favour of the donee absolutely and forever but without any monetary consideration and is therefore executing this gift deed. Now this deed witnesseth Gift 1. The donor hereby irrevocably, absolutely and forever gifts, transfers and conveys the....
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....nancial year 2002-03, I have gifted an immovable property bearing No. C-57, Inderpuri, New Delhi valuing Rs. 40,68,450 out of natural love and affection to Ms. Mayawati d/o Shri Prabhu Dass alias Prabhu Dayal r/o EA-44, Inderpuri, New Delhi through registered deed dt.26th Dec., 2002. 3. That Ms. Mayawati is my Dharam sister and put Rakhi on Raksha Bandhan festival since last 15 years. Signature unreadable Deponent Verification I, Shri Ashok Kumar Jain s/o late Shri Mitthan Lal Jain solemnly affirm that the contents of above paras 1, 2, and 3 are true and correct to the best of my personal knowledge and belief. Nothing have been concealed. So help me God. Signed and verified this 25th day of March, 2006 atGhaziabad. Signature unreadable Deponent" 10.2 The statement of the donor was recorded on26th Dec., 2005. This donor is also assessed to income-tax. In his statement he has categorically stated that the gift is being made by him voluntarily and out of natural love and affection. In t....
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.... and subsequent years. In this regard reference may be made to the details of gifts given on pp. 4 to 6 of the assessment order wherein he has considered the details of gifts made to the assessee and to her family members. It was submitted on behalf of the assessee that the family members of the assessee are independently assessed to tax. The contention of the assessee living separately for last several years, and being assessed regularly on her independent incomes has not been controverted. In view of the above facts the gifts received by the family members cannot be taken into account while making the assessment in the case of the assessee and the same cannot be treated as income of the assessee, particularly when the AO has not brought out any material on record to demonstrate that the financial transactions of the family members of the assessee were intermixed or interconnected with the financial transactions of the assessee. There is also no evidence to substantiate the fact that the assessee was directly or indirectly benefited by such gifts, which were received by her family members nor has the AO added the gifts received by family members as the income of the assessee from ....
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....et to the assessee with whom she has no relation whatsoever although it is stated that assessee is Dharam sister of her husband. The value of gift given by her exceeded the income declared by assessee during last five years....... As regard the creditworthiness it is seen that she herself had taken loan for purchase of property as she was not having sufficient funds for this purpose. It is seen that she had sold her jewellery for purchase of the house. Therefore, the creditworthiness of the donor is not proved........From the return of income for the asst. yr. 2003-04 it is seen that total income declared by Mrs. Jain is Rs. 1,30,800. Out of the said amount she has paid nearly Rs. 35,000 towards payments under s. 88 for claiming tax rebates. The donor has also shown sale of jewellery worth Rs. 2,81,608. The sale of jewellery by Smt. Veena Jain states the financial status of the assessee. This jewellery was sold for the purchase of a residential house. The said house was purchased but was gifted to the assessee. In view of these facts the genuineness and creditworthiness is not proved." 11.3 On going through the above observations it is clear that the AO has been influen....
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....assessee took loans of more than Rs. 32 lacs from different persons to purchase the house which was later gifted to the assessee. Here again, the inference drawn by the AO is factually incorrect. Firstly, because most of the loans were taken in June, July and September, 2002. Thus, there is no nexus between the borrowings of the loans and the purchase of the property. The donor is also a businessman and as per practice he was taking loans and repaying the same. In any case, the borrowings of the loans have not been made through the assessee nor the repayment of the loans has been done by her. Here, we may make reference to the assertion made by the assessee herself before the AO himself vide letter dt.28th March, 2006available at p. 57. A relevant portion of the said letter relating to this aspect is as under: "The question of borrowing by Sh. Ashok Jain and Smt. Veena Jain has also been explained in length. The donors have stated before you also that they had taken temporary loans to buy the said property from friends. At the time of purchase of the gifted property there was no intent to gift the said properties. The loans were also raised temporarily and were supposed to....
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....aking reference to the loans as has been done by the AO. 15. The AO has also made reference to the enquiry conducted by the Addl. Director of IT (Inv.) and to the statements of donors which were recorded by him. The statement of Smt. Veena Jain was recorded by the Addl. Director of IT (Inv.) on4th Dec., 2003. This statement has been reproduced by the AO at pp. 7 to 13 of the assessment order. After reproducing the statement the AO has drawn certain adverse inferences at p. 13. These inferences are as under: "Her attention was drawn to the statement recorded by Addl. Director of IT (Inv.),New Delhiand her comments were sought. She stated that she had taken a loan of Rs. 5,00,000 from Sh. Vivek Mangal and a sum of Rs. 10 lacs from Smt. Sushma Mangal for purchase of residential house. The loan could not be repaid due to seizure of bank account. It is thus clear that the amount has been gifted out of loans taken by her from different persons in the garb of purchase of residential house although she purchased the house and gifted the same to the assessee. This fact itself creates doubts to genuineness of the gift. The total amount of gifts gifted by her is Rs. 40,03,850 in d....
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....nt by picking up certain portions of these statements out of context. This approach is also not justified. The statement has to be read as a whole and only one sentence or two cannot be read out of context, to present totally unwarranted inference. Nextly, when the AO had himself recorded the statement of these donors, then again they confirmed the making of the gift to the assessee and gave all the details required. All the three donors had categorically stated that the gifts were given by them voluntarily and out of natural love and affection. 15.6 It may be pointed out that the AO did not conduct any independent inquiry to controvert these statements and to support his conclusion that the gifts were arranged by the assessee. There is no direct or indirect documentary, oral or circumstantial evidence to show that the investment of any kind before or after the gifts was made by the assessee for obtaining the gifts. The AO has not been able to bring out any tangible material on record to demonstrate the fact that the gifts were made by the donors out of some ulterior motive or design or for some benefit or consideration. The AO has not been able to show that the gifts were not v....
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....ankaj Jain. Here it may be pointed out that a gift may be made to a stranger. Sec. 123 of Transfer of Property Act reference to which has been made above does not require that gift should be made to a relation only. Thus the learned AO has taken an incorrect view of law. 16. In the case of CIT vs. Mrs. Sunita Vachani (1990) 84 CTR (Del) 18 : (1990) 184 ITR 121 (Del) the assessee had received gifts from abroad, the CIT by invoking the provisions of s. 263 set a side order of ITO and directed him to pass fresh assessment order. In that case the CIT was of the view that the order of ITO was prejudicial to the interest of Revenue as the ITO had not examined sources of the gifts to satisfy himself about the genuineness thereof. The assessee filed appeal before Tribunal which quashed the order of CIT. In appeal against the order of Tribunal, the Hon'ble Delhi High Court upholding the order of Tribunal, by observing as under: "4. In our opinion, the Tribunal had, on merits, come to the conclusion that the gifts were genuine. This is a pure question of fact. The Tribunal has examined the evidence which was available on the record and has arrived at the aforesaid finding. Ev....
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....rtment that mere identification of the donor and the movement of the monies through banking channels are not sufficient to prove the genuineness of the gifts and that it is also necessary for the assessee to show the financial capacity and, creditworthiness of the donors, their relationship with the assessee, the sources of the gifts and their capacity to give such large amounts to the assessee. In the case before the High Court, there was a gift of Rs. 20 lakhs from the NRE accounts of the donors and the assessee could not prove the genuineness of the transaction or the identity and capacity of the donors to make the gift. He merely relied on the fact that the gifts came through banking channels. This was considered insufficient by the Hon'ble Delhi High Court. In the case before us, in addition to establishing the identity of the donors and the fact that the monies came through bank accounts, the assessee was able to discharge the initial burden of showing the source of the gifts and the financial capacity of the donors and was also able to point out that the donors were also assessed to income-tax. Taking the evidence adduced by the assessee overall, we hold that the Departm....
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....pendent witnesses have also validated their identity. 18.1.3 Keeping in view the totality of facts we are of the considered opinion that identity of the donors stands fully proved and established. 18.2. Creditworthiness of the donors: All the three donors who made the gifts are men of means. They belong to rich background and own huge movable and immovable properties. The evidence of their earnings has been brought on record. On the direction of learned CIT(A), the AO made enquiry about their net worth and then reported the same to the CIT(A). The figures of net worth as made available by AO have been reproduced by CIT(A) in the order which have not been doubted either in the appeal or by the senior Authorised Representative. Each of them had net worth more than of a crore. The Department has not brought out any adverse material against their creditworthiness. The AO has held them to be non-creditworthiness only on the basis of surmises or guesswork. In fact, at the time of making assessment he made no enquiry about their wealth and net worth, which he subsequently made while submitting the remand report to CIT(A) and in which he found them to be creditworthy. Thus, in absenc....
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.... doubt in the genuineness of the transaction of the gift have to be brought on record. Mere guesswork will not be sufficient. Similarly, the mere fact that the gift was made of huge amount or of valuable property in absence of any other material to doubt the genuineness of the gift, will not be sufficient to treat the gift as non-genuine. Lack of blood relationship or family relationship or absence of occasion for making gift are again not the only considerations for treating the gift as non-genuine. Although these may, at times, be relevant corroborative considerations to establish the non-genuineness of the transactions, but by itself none of such factors can be sufficient considerations for treating the gift as non-genuine. 18.3.1 In the instant case there is no evidence on record to show that the assessee had in any way at any time financially or otherwise helped the donors to gain in any manner by misusing her position as a public servant. There is no proof that the donee made any investment in the property gifted lo her before the same was gifted. Smt. Veena Jain and Sh. Ashok Jain borrowed funds for purchasing the property gifted to the donee. There is no evidence that th....
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....ti,Ajmer, and derived income by exercise of such profession. He received a sum of Rs. 1,05,000 on19th June, 1978, from a non-resident pilgrim called Abu Sufian, who was coming to the Dargah for a number of years. The AO treated this gift to be a genuine gift made on account of love and affection towards the donee, while the CIT reversed the order holding that the payment was camouflaged as a gift. On appeal the Tribunal set aside order of CIT and confirmed the order of AO. This order was challenged by CIT by making a reference under s. 256 (1). In the reference the High Court upheld the decisions of the Tribunal and held as follows: "The finding which the Tribunal has recorded in this case is that it is not a case where the donor was benefited from any preaching or discourse or any special service of the assessee, but it is a case where the donor on his own noticed some supernatural power in the assessee and being influenced by that he decided to earmark the pounds equivalent to the amount for making the payment to the assessee. It was observed that it is a clear case of voluntary payment made to the assessee for his personal qualities or as a mark of the high esteem and r....
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....he opinion that balance sheet/statements of affairs cannot be equated to books of accounts because "in traditional terms books means a collection of sheets of paper bound together with the intention that such binding shall be permanent and papers used are kept collectively in one volume. It can also be assumed that it connotes the contention that it should serve as a permanent record." This is the finding of the Hon'ble judges of the Bombay High Court in Sheraton Apparels vs. Asstt. CIT (2002) 175 CTR (Bom) 651 : (2002) 256 ITR 20 (Bom). 20.1 Further, in P. Ram Nath Aiyars Law Lexicon 2002 edition p. 233/234 a book has been defined as under: "A treatise, written or printed on any material and put together in any convenient form. Any printed literary compilation; a collection of sheets bound together containing manuscript entries or intended to contain such entries; the name of several important papers prepared in the progress of a cause, although entirely written and not at all in the book form." 20.2 Further, the Hon'ble High Court in the case of CIT vs. Bhaichand H. Gandhi (1983) 141 ITR 67 (Bom) held that bank pass book is not a book maintained by the asse....