TaxTMI 
TaxTMI 
TaxTMI 
2010 (6) TMI 550
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....hat the assessee received a gift of Rs.30,00,000/- from Mrs. Chandra Hingorani. The genuineness of the gift was examined by the Assessing Officer by considering the various documents including taking statements of the assessee which was recorded on 19.12.2006. The Assessing Officer has reproduced the question and answer replied by the assessee in the statement at page 2 & 3 of the Assessment Order. The same is reproduced below: - "Q.1. Please state how many gifts you have made during your life? Ans. No, I have not made any gifts at any stage of my life. Q.2. Have you received any gifts, if so please intimate the details? Ans. I do not remember having received any gifts in my life or after my marriage, except one gift of Rs.30,00,000/- received from one Mrs.Chandra Hingorani. However, I do not know her exact address of the house, but she lives in her own house at Pali Hill, Bandra (West). She is about 83 years old and is widow of late Shri Nanak Bhai. Her husband was friend of my father and is widow of late Shri Nanak Bhai. Her husband was friend of my father late Shri Munshiram Gupta. I have visited her house in Pali Hill, only when I was 7 or 8 years old. Thereafter, I neve....
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....Ans. The gift was received through cheques. However, I do not know the name of the bank, my bank account number or my bank. My husband Shri Mukul Agarwal received the cheques of gift. I do not know where he deposited the cheques and how he is utilizing the gift is also not known to me. Q.9. When you and your family have such limited relationship with Smt.Chandra Hingorani and you and your family have never given such a big amount of gift to her family, how is it that she gave you a gift of Rs.30 Lacs without any consideration, reason, occasion or reciprocal love and affection? Ans. The donor told my mother on the occasion of birth of my second baby that she had been advised by her late husband to give something to our family out of love and affection and she fulfilled his last wish. I believe it to be my destiny through my daughter that what my father could not give to me at the time of marriage, I have been blessed by my father's friend through his last wish. Q.10. You have purchased a flat. Did you require the white money for payment of the flat, had you arranged the money as gift? From your return filed for 2005-06 it is clear that you have shown flat investment at 13.67 lak....
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.... any unknown lady, who is not in any way connected with the assessee and who is also now avoiding to attend the Income-tax proceedings to avoid the truth to come out. Accordingly, the amount of gift of Rs.30,00,000/- is added to the income of the assessee as undisclosed income of the assessee and penalty proceedings for concealment of income are initiated separately." 5. The addition made by the Assessing Officer has been confirmed by the CIT(A) relying on the judgment of Hon'ble Supreme Court in the case of CIT vs. P. Mohanakala (2007) 291 ITR 278 (SC) and the judgment of Hon'ble Punjab & Haryana High Court in the case of Jaspal Singh vs. CIT (2007) 290 ITR 306 (P&H). The CIT(A) held that the assessee failed to prove that the gift was genuine . 6. The Learned Authorised Representative pointed that Mrs. Chandra Hingorani was the family friend of the assessee; she gave gift out of love and affection. She is 83 years old lady. There was no doubt on the genuineness of her and identity and capacity to give the gift, which was given through banking channel as was given duly confirmed by the donor. 7. The Learned AR in support of its contentions referred to the various pages of ....
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....iments. The Ld. AR relied on the decision of Rajasthan High Court in the case of CIT vs. Padam Singh Chouhan reported in 215 CTR 303 (Raj.). It is also submissions of ld. AR that the opinion was same of love and affection and the material available on record. Ld. AR on support of its contention relied upon the decision of Kanchan Singh 221 CTR 456 (All.). He submitted that bald justification is not sustainable. He relied upon CIT vs. Gangaur Investment Ltd. Ld. AR submitted that the donor had compensated in cash or on kind is a mere conjecture and surmise in absence of specific evidence. Ld. AR supported its contentions relied on the decision in the case of R.K. Syal vs. CIT (supra). He further submitted that under section 68, the explanation of the assessee has to be only satisfactory as against requirement of demonstrative or infallible proof. He relied on Malhotra Jewellers 47 TTJ 354 (Del.) and on the order of the Hon'ble ITAT, Mumbai in the case of Asha Hampannawar vs. ITO which is confirmed by the Hon'ble Bombay High Court and the SLP against the order of the High Court has been dismissed by the Apex Court. 11. The Ld DR on the other hand relied upon the assessee and relied ....
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....s to whether, firstly the persons from whom money is alleged to have been received actually existed or not. Secondly depending upon the facts of each case, the Income-tax Officer may even be justified in trying to ascertain the source of the depositor, assuming he is identified, in order to determine whether that depositor is a mere name lender or not. Be that as it may, it is clear that the Income-tax Officer has jurisdiction to make enquiries with regard to the nature and source of a sum credited in the books of account of an assessee and it would be immaterial as to whether the amount so credited is given the colour of a loan or a sum representing the sale proceeds or even receipt of gift. The use of the words 'any sum found credited in the books' in section 68 indicates that the said section is very widely worded and an Income-tax Officer is not precluded from making an enquiry as to the true nature and source thereof even if the same is credited as gift. What is clear, however, is that section 68 clearly permits an Income-tax Officer to make enquiries with regard to the nature and source of any or all the sums credited in the books of account of the company irrespective ....
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....d before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents." 12.2 We would also like refer one more judgment of the Apex Court in the case of Commissioner of Income-tax v. P Mohanakala 291 ITR 278 (SC) In this case following questions have been answered by the High Court in favour of the assessees and against the Revenue : "(a) Whether, in the facts and circumstances, the Income-tax Appellate Tribunal was correct in law to accept the principle of preponderance of probabilities in holding that the claim of the appellant that the sum of Rs. 15,62,500 received him by way of gifts through normal banking channels was not genuine and that it was liable to be assessed under section 68 of the Income-tax Act, 1961 ? (b) Whether, in the light of the law established and based on the facts and in the circumstances of the case, the learned Income-tax Appellant Tribunal is legally justified in concluding that burden of proof cast on the appellant under section 68 of the Income-tax Act, 1961 has not been discharged and the ingredients for invoking section 68 of the Income-tax Act are present ? (c) Whether in the....
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....come earned in England. As far as his Indian income is concerned, he stated that he filed the returns for the assessment years 1996-97 and 1997-98 before the Income-tax Officer, Ward 1(4), CBE only on October 23, 1997. His investment in Indian companies according to him will be around Rs. 5 crores and made out of his income earned in the foreign countries. He did not reveal the details of his bank account in India and stated that he would be submitting the details through his auditor which he did not. Except the self serving statement there is no material evidence as regards his financial status. He stated from 1972-73 he knew Srinivasan, Rajendran and their families. His father was a taxi driver, and was very poor. Srinivasan and his family members were supporting him when he was in India. To a pointed query as to whether there is any evidence to show that he was also known by any other name other than Sampathkumar, he stated that "no evidence. Only Mr. Srinivasan used to call me as Suprotoman." The Assessing Officer in the circumstances came to the conclusion that the gifts though apparent are not real and accordingly treated all those amounts credited in the books of the assesse....
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....ve been relied upon by the Assessing Officer to reject the explanation offered by the assessees. The Commissioner of Appeals confirmed the findings and conclusion drawn by the Assessing Officer. The Tribunal speaking though its Senior Vice President concurred with the findings of fact. The findings in our considered opinion are based on the material available on record and not on any conjectures and surmises. They are not imaginary as sought to be contended. Relying on the decisions of this court in Bejoy Gopal Mukherji v. Pratul Chandra Ghose, AIR 1953 SC 153 and Orient Distributors v. Bank of India Ltd. AIR 1979 SC 867, Shri Iyer, learned senior counsel contended that the issue relating to the propriety of the legal conclusion that could be drawn on the basis of proved facts gives rise to a question of law and, therefore, the High Court is justified in interfering in the matter since the authorities below failed to draw a proper and logical inference from the proved facts. We are unable to persuade ourselves to accept the submission. The findings of fact arrived at by the authorities below are based on proper appreciation of the facts and the material available on record and surr....