TaxTMI 
TaxTMI 
2011 (9) TMI 564
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....2010. The A. O. in the assessment order has made addition of Rs. 8 lakhs in the income of the assessee, for which contention of the assessee was that the said amount was received in cash by the assessee as gift from his father-in-law, B. N. Sahu. His contention is that he received the amount in cash in the following manner: (i) 10th April, 2004 : Rs. 2,00,000/- (ii) 8th May, 2004 : Rs. 1,00,000/- (iii) 6th August, 2004 : Rs. 2,00,000/- (iv) 10th October, 2004 : Rs. 3,00,000/-. The A.O summoned the donor and recorded his statement and after examining the affidavit filed by the donor father-in-law of the assessee, the A. O rejected the contention of the assessee and refused to accept the fact that the sa....
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....y. In this case the donor was a retired employee from a Company having bank accounts and he produced copy of the pass-book. He was also an assessee at the income tax and though he may not be assessee at the relevant time, but at the same time he filed an affidavit again admitting that he gifted said amount to the assessee. It is also submitted that the Assessing officer as well as the Tribunal proceeded to draw adverse inference as against the assessee on the basis of some materials, which in the opinion of the A.O. and the Tribunal could have been produced but were not produced. While drawing such adverse inference the A.O and the Tribunal ignored the important fact that assessee and his father-in-law-the donor were even not made aware tha....
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....hether it is a gift or not as well was required to find out whether there is creditworthiness of the donor or not? Much has been stressed that the donor has admitted that he has gifted the amount to the assessee and that should have been accepted. We are unable to agree with this proposition because of the fact that we do not hold that in a case where the assessee claims that he received certain money from someone in cash and the other party admits the same had been given by him and the material on record clearly disclosed that the donor had no creditworthiness so as to give the amount, then in that situation the admission contrary to the trustworthy evidence cannot be accepted as binding upon the Assessing Officer. Furthermore, in a case w....
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....itworthiness of a person and creditors source for such credit are entirely different matters. Once credit in the hands of creditor is proved, it's source cannot be enquired by the Assessing Officer in the assessing proceedings of (debtor) assessee. Argument of learned counsel for the appellant that once identity of a creditor is disclosed, the burden of the assessee to explain the money in his hand stand discharged cannot be accepted if the Assessing Officer is satisfied that creditor has no creditworthiness. Here there should not be confusion in knowing the difference between creditworthiness of the creditor and his source for the such credit. If such creditor says that he had paid certain amount to the assessee and produces evidence of av....
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....d that on different times of donation he was having cash, in total to the tune of Rs. 8.00 lakhs. His contention has been recorded by the Tribunal in para 9 that he gave this gift from the money received on his retirement and from provident fund and gratuity amount. The donor's contention further is that he kept all those money in his bank account and in support of his contention he produced the passbook of his two bank accounts, one of S.B.I, Asansol and another S.B.I. Nirsa. Asansol bank account was opened in the month of December, 2001 and from this account total withdrawal was Rs. 24,95,880/-, out of which Rs. 21,93,380/ is either transferred entries or Demand draft entry and only Rs. 3,02,500/- was withdrawn in cash. In another account....