TaxTMI 
TaxTMI 
TaxTMI 
2010 (11) TMI 710
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....he Capital Account, which was stated to be gift received from Shri Vijay Vora, brother-in-law (wife's brother) of the assessee on redemption of Resurgent India Bonds of the value of US$ 20000. The A.O. enquired about the identity, creditworthiness and genuineness of the gift. Assessee submitted that his brother-in-law Mr. Viajy Vora residing in New York, USA holding Indian passport has invested in Resurgent India Bonds issued by the State Bank of India on 31st October 1998 and before maturity in October 2003, they were gifted to the assessee by endorsing on the said bonds and that these were redeemed with State Bank of India, NRI Branch, Mumbai and copy of the passport of Shri Vijay Vora was submitted to establish identity and copies of bonds and certificate of redemption for genuineness of the transaction. The A.O. insisted on verifying the creditworthiness of the said Shri Vijay Vora. It was submitted that Shri Vijay Vora has migrated to USA in 1982 and since then resident of USA and had his own incomes but due to certain reasons assessee felt unable to obtain the creditworthiness of his brother-in-law. He did not file any details of the income of his brother-in-law. Since the cr....
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.... Taxman 383 to submit that the assessee has established the nature and source of money, therefore, the A.O. was not justified in making the addition just because the he could not furnish the donor's capacity in gifting the amount. 8. As an abundant caution, the assessee also furnished the individual income tax returns filed before the Internal Revenue Service, USA by Shri Vijay Vora for the years 2003 and 2004 before us with a prayer for admission of additional evidence, and relied on the principles established by the Hon'ble Madras high Court in the case of Anaikar Traders and Estates (P.) Ltd. (No. 2) v. CIT 186 ITR 313 and M. Ayishath Munawara v. Union of India 213 ITR 572 (Mad.) and the Third Member decision in the case of Mascon Global Ltd. v. ACIT 37 SOT 202 (Chennai) (TM) for admission of additional evidence. He also further relied on the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Suresh Kumar Kakar 324 ITR 231 (Del) to submit that where the gifts are from close relatives through love and affection, it does not require any particular occasion to gift the amount and since the amounts are received through banking channels identity and genuineness have bee....
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....aining the nature of source of transaction. It is true that while examining the gift genuineness, identity of the donor and creditworthiness of the donor are required to be considered. In this case the three parameters are satisfied eventhough the assessee could not furnish the income tax return of the said donor in USA/details of income, the fact that that the person could invest in Resurgent India Bonds and hold it for a period of 5 years till its maturity itself indicate that the person has capacity to invest/donate the amounts. In view of this, we are of the view that the action of the CIT(A) in deleting the addition so made does not require any interference. 10. We are also of the opinion that there is no need for admitting the additional evidence and sending it back to the A.O. which will be a futile formality as the said person has capacity to donate, the donor is immediate family relative of the assessee which was not in dispute and further the investment in bonds itself gives exemption not only to the original investor but also to the donees/transferees. In view of these reasons, we are of the opinion that there is no need to admit any further additional evidence and acco....
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.... outside the purview of provisions of section 94(7) and accordingly he deleted the same. 13. We have considered the issue and the arguments of rival parties. The provisions of section 94(7) have been interpreted by the ITAT Delhi "I" Bench in the case of ITO v. Shambhu Mercantile Ltd. 9 DTR (Del) (Trib) 617 wherein after analysing the use of words as "such person", "such unit" and "such date" with such securities or units in clauses (b) & (c) of section 94(7) it was held that all the three clauses are to be read together and all the three conditions mentioned in clauses (a), (b) and (c) thereon must be cumulatively satisfied. In this case there are two Record dates after the purchase of mutual funds by the assessee. In our opinion the Record Date with reference to purchase only can be considered as "such date" for considering the period of sale also. As rightly pointed, assessee could not be in a position to know or understand or plan his affairs when the declaration of dividend by the Mutual Fund was again made, after some period which becomes second Record Date in this case. It is not possible to imagine the situation where if a mutual fund went on declaring dividend periodicall....