TaxTMI 
TaxTMI 
2010 (10) TMI 530
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....t is an individual and engaged in the business of sale and purchase of jewellery items and received a gift of Rs. 1 lakh from Harcharan Singh during the previous year relevant to the assessment year in question. The assessee filed his return on July 26, 1994, declaring an income of Rs.93,180. During the course of assessment proceedings, the assessee explained to the Assessing Officer that he received the said amount of Rs. 1 lakh from his childhood friend in the hour of need. The Assessing Officer relying upon the judgment of this court in Lall Chand Kalra v. CIT [1981] 22 CTR 135 (P & H) held that the gift received by the appellant was compensatory and was liable to be taxed under section 68 of the Income-tax Act, 1961 (in short "the Act")....
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....e ratio of the decision of the hon'ble High Court of Punjab and Haryana in the case of Lall Chand Kalra [1981] 22 CTR 135 (P & H). The action of Assessing Officer had been confirmed by the learned Commissioner of Income-tax (Appeals). It is true that any amount given under natural love and affection without any consideration can be considered as gift. The relevant thing which is required to be there is that the gift should be without any consideration and under natural love and affection. It is not disputed that love and affection can be amongst the relatives, friends or the persons who are known to each other very closely. Sometimes, distant persons can be closer than the close relatives. However, there was no parameter to judge this type ....
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.... my knowledge and belief and nothing has been concealed therein (Sd.) . . . . . . . . . . . . . . . . Deponent Harcharan Singh Attested Notary, Santokh Singh Gill with Seal.' It is relevant to point out that the Assessing Officer passed the assessment order on March 10/17, 1997. Therefore, the affidavit had not been furnished before the Assessing Officer during assessment proceedings because it is attested by the Notary on December 15, 1999. In the affidavit, the alleged donor has stated that he is the resident of village Charrian. He nowhere stated that he is non-resident and made the gift to the assessee when he was residing abroad. In the said affidavit, the alleged donor, Shri Harcharan ....
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....laimed to be given by DD on September 14, 1993, as appearing in the copy of the bank account of Shri Harcharan Singh. However, nothing had been brought on record that Shri Harcharan Singh was residing at village Charrian, P.O. Singh Bhawantpur at that point of time. It is also relevant to point out that the assessee had not produced the donor before the Assessing Officer and also not disclosed his address of Dubai. Therefore, it cannot be ruled out that the alleged donor was a stranger to the assessee. It is also relevant to point out that the assessee had not established that there was any occasion on which the alleged donor had gifted a sum of Rs. 1 lakh. Furthermore, no relationship had been established by the assessee but he simply stat....
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.... 1 lakh to the assessee particularly when only one entry of Rs. 1,10,000 had been transferred in the NRE account of Shri Harcharan Singh. The assessee had also not furnished a copy of his bank account to rebut the findings of the Assessing Officer that it was compensatory gift, which he could easily have proved by showing that there was no withdrawal in his bank account on the date or the nearby date of withdrawal in the NRE account of Shri Harcharan Singh, in the opinion, the learned Commissioner of Income-tax (Appeals) rightly observed that : `In the absence of conclusively proved habit of donating his hard earned money of the donor, it is difficult to treat the said gift to be a natural phenomena.' In the instant case....
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.... been attested on December 15, 1999 whereas assessment order had been passed on March 10/17, 1997. The same was never furnished before the Assessing Officer. There were certain contradiction in the affidavit which are : (i) there is no mention in the affidavit that the donor was nonresident and was residing abroad at the time of making gift, (ii) that the gift had been given on August 17, 1993 whereas in one of the paras there is reference in the affidavit to the gift of Rs. 1 lakh in the year 1988 at the time of income-tax raid, (iii) the gift had been given "without any interest" whereas in case of gift payment of interest does not arise, (c) a perusal of the NRE account in the name of the donor sho....