TaxTMI 
TaxTMI 
2013 (5) TMI 579
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.... grounds: "1.1. That the Ld. Assessing Officer and the CIT(A) erred in holding that the loan of Rs.13,25,000/- from Shri Subhash Chandra Gautam was not proved on account of non- productíon of the loan creditor. 1.2. That the Ld. CIT(A) failed to appreciate the factual matrix of the case as appearing at page 5, para 3 to his order while holding that the loan credit from Shri Subhash Chandra Gautam remained unexplained. 1.3. That the Ld. CT(A) further erred in holding that the appellant failed to prove identity and credit-worthiness of the credítor and establish the genuineness of loan. 2.1. That the Ld. Assessing Officer and the CIT(A) erred in holding that the loan of Rs.1,00,000/- from Shri Sushil Kr. Sad was not proved on account of non-production of the loan creditor. 2.2. That the Ld. CIT(A) failed to appreciate the factual matrix of the case as appearing at page 5, para 4 to his order while holding that the loan credit from Shri Sushil Kumar Sad remained unexplained. 2.3. That the Ld. CIT(A) erred in holding that the appellant failed to prove identity and credit-worthiness of the creditor and establish the genuineness of loan.." 3. Brief facts l....
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....ssessee, as held in Seth Kalekhan Md Hanif vs CIT (1963) 50 ITR l (SC). It is necessary for the assessee to prove prima-facie the transactions genuine with identity of the creditor, his capacity and the transaction. Only after these three things proved prirna-facie, only then the burden shifts on the department. Merely establishing the identity of the creditor is not enough [ref. Shankar Industries vs CIT (1978) 114 ITR 689 (Cal); Prakash Textile Agency vs CIT (1980) 121 ITR 890 (Cal). In the case of CIT vs Baishnav Charan Mahanti (1995) 212 ITR 199 (Ori), it was held that only when three conditions fulfilled by the assessee then the burden shifts to the department. But in this case, the assessee failed to prove the identity of the creditors and their creditworthiness. Therefore, the burden never shifted to the department. It is also held that mere filing the Income tax file numbers of the creditors is not enough. Their identity and creditworthiness should be proved and there should be genuine transactions as held in CIT vs Korley Trading Co Ltd (1998) 232 ITR 820 (Cal). Thus. I am the opinion that AO has rightly concluded that the assessee failed to establish the genuinen....
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....e as genuine when the identity of the creditor and the genuineness of transaction through account payee cheque has been established. We find that both the Commissioner of Income Tax (Appeal) and the Tribunal below followed the well-accepted principle which are required to be followed in considering the effect of Section 68 of the Act and we thus find no reason to interfere with the concurrent findings of fact recorded by both the authorities. The appeal is thus devoid of any substance and is summarily dismissed." 7. We find that in the present case also the assessee has discharged its onus by filing confirmations from the donors, copies of acknowledgment of returns of the relevant assessment year, copies of PAN card, copies of bank statements and also contra confirmation. Once this is the position and none of the authorities below have gone into the details and not doubted the genuineness of the transaction or the creditworthiness of these creditors, in our view, now nothing before us remains after the decision of Hon'ble Calcutta High Court in the case of M/s. Dataware Private Limited (supra). Respectfully following the said decision in the case of M/s. Dataware Private L....
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....rvice charges received from ICICI Bank vide lease agreement with ICICI Bank dated 20.02.2003, 16.10.2003 and 21.02.2003. The assessee filed complete reconciliation and details of rent and service charges received from ICICI Bank. This sum of Rs.1,56,200/- is included in the business income of the Assessee and also TDS was claimed. In such circumstances, we feel that the CIT(A) has rightly deleted the addition and we confirm the same. This issue of revenue's appeal is dismissed. 8. The next issue in this appeal of revenue is against the order of CIT(A) in deleting the addition made by AO on account bogus gift of immovable property. For this, revenue has raised following ground nos. 2, 3, 4 and 6:- "2. That on the fact and in circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 14,70,34,400/- on account of bogus gift of immovable property (multi storied building) without considering the fact that the creditworthiness of the alleged gift donors is very much poor in comparison to the assessee. 3. That on the fact and in the circumstances of the case the Ld. CIT(A) is not justified in deleting the addition of Rs. 14,70,34,400/- on account of bogus ....
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....ccount filed along with the return of income by increasing the capital. During the course of assessment proceedings, the AO required the assessee to explain how it was possible that four co-owners decided to relinquish their rights in the above said property to the assessee by making gifts, more so, when the property was undivided and the share of each co-owner is not determined. He also alleged that assessee's Balance Sheet as on 31.03.2006 reveals capital of more than Rs. 1 cr., whereas donor's Balance Sheets reveals a minimal capital. The assessee explained before the AO that the donors were close blood relations being mother and brothers, who by swearing affidavits confirming the gifts having been made to the assessee out of natural love and affection. These gifts were duly registered by separate deed of gifts registered on 08.08.2005. The assessee and four donors are assessed to tax and gifts were duly incorporated in the respective accounts. It was also explained by the assessee before the AO that the donors have gifted their rights over 1/8th share of each of the co-owners i.e. undivided share of house property. The assessee also explained that circle rates or stamp duty rat....
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....ift of his undivided interest in the family property, movable or immovable, either to a stranger or to a relative except for purposes warranted by special texts'," The same view was also taken by the Hon'ble M.P High Court in the case of Balchand Malaiya (HUF) vs. C.I.T, 227 ITR 651. From the observations as quoted above, it is clear that a gift by a coparcener of his undivided interest in the coparcener property is void. The reason as to why a coparcener is not entitled to alienate his undivided interest in the coparceners property by way of gift is that an individual member of the joint Hindu family has no definite share in the coparcener property. The assessee's case fully identical to the citation referred to above. Undivided 1/8th share in the property in the names of the donors have not been specified and determinate. Accordingly, the donors cannot make the alleged gifts, when they have the title and definite share in their own name. hence, the alleged gifts are treated as void. On the contrary, since the transactions have taken place between the assessee and his four relatives, this can be treated as relinquishment of their rights in the undivided property. This ....
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....e value of the property adopted by the Stamp Valuation Authority for the purpose of Registration as investment made by the assessee. The valuation adopted by SVA is applicable for the purpose of Capìtal Gain, as prescribed u/s.50C of the Act which has very limited purpose. This legal fiction has been created for computation of Capital Gain only in case of the seller of any asset. The same cannot be extended ìn ease of the purchaser to estimate the undisclosed investment. The decisions in cases of CIT vs Mother India Refrigeration Industries P Ltd ( l985) 48 CTR (SC) 176 and CIT vs Amarchand N. Shroff (l 963) 48 ITR 59 (SC) are applicable ìn this case. Secondly. there is no evidence on record to establish that there was any underhand dealing in case of this transfer. No enquiry was conducted by the Ld AO in the instant case. Therefore, the action of the AO amounts only to act on surmise. While making assessment. there is no scope of any suspicion and surmise. Thirdly, in a number of cases different Courts held that the provisions of Sec.50C are applicable only in the case of a seller and the rate determined by the Stamp Valuation authority cannot be applie....
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....ations within the meaning of definition of relatives, (ii) all donors are assessed to income tax and gifts are by way of gift deed registered with Sub-registrar on 08.08.2005 i.e. separate gift deeds of 1/8th undivided share of each of 4 co-owners, (iii) gift is disclosed by donors in their return of income by reducing the capital account and by donee by including in his capital account. The gift is made on account of their love and affection. The source of gift in the hands of donor is explained. It means that all the ingredients of gift has been explained and met with. The only issue raised by AO and by CIT, DR that the undivided share cannot be gifted. For this, he referred to the decision of Hon'ble Supreme Court in the case of Thamma Venkat Subbamma Thamma Rattamma, AIR 1987 SC 1775, wherein it is stated that the undivided interest in the coparceners property i.e. HUF property cannot be transferred by way of gift. Further, the Ld. CIT, DR as well as the AO referred to the decision of Hon'ble M. P. High Court in the case of Balchand Malaiya (HUF) Vs. CIT 227 ITR 651 (as referred in AO's order). We find that even in the case before Hon'ble M. P. High Court, the issue was alienat....