TaxTMI 
TaxTMI 
2014 (8) TMI 632
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....e Tribunal was right in law in cancelling the order passed by the Commissioner of Income-tax, under section 263 of the Income-tax Act ?" 3. It is necessary to trace the factual matrix. The respondent-assessee filed return for the assessment year 2000-01 on January 5, 2001, declaring a total income of Rs. 4,24,100. It was processed and completed by the Assessing Officer after making an addition of Rs. 54,688 in the income of the assessee, vide assessment order dated November 28, 2003. The assessment order was found prejudicial to the interests of the Revenue. Consequently, the Commissioner of Income-tax issued notice under section 263 of the Act to the assessee and called for his explanation in respect of following gifts of Rs. 21 lakhs : Sr. No. Name of the donor Amount in rupees 1 Vinay Kumar Sharma Rs. 5,00,000 Received vide D. D. No. 741789 dated 23-4-1999 2 Vinay Kumar Sharma Rs. 5,00,000 Received vide D. D. No. 779 dated 13-5-1999 3 Vinay Kumar Sharma Rs. 5,00,000 Received vide D. D. No. 286144 dated 27-8-1999 4 Vikram Awasthi Rs. 5,00,000 Received vide D. D. No. 335083 dated 7-10-1999 5 Smt. Kamlesh Ahuja Rs. 1,00,000 Received vide D. D. No. 38401 dated 11-....
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....h Ahuja. The assessee failed to furnish reliable information regarding the relationship, occasion and creditworthiness of the donors for establishing the genuineness of the alleged gifts as per the parameters laid down by the hon'ble jurisdictional High Court in the case of Lall Chand Kalra v. CIT [1981] 22 CTR 135 (P&H). In the said case, the hon'ble Punjab and Haryana High Court had held that the gifts shown by the assessee being one from a stranger and another from a relative could not be treated as genuine if there was no occasion for making the gifts and the financial capacity of the alleged donors was not proved on record. A number of opportunities were allowed to the assessee for this purpose but the requisite information/ details have not been furnished by him. The contention of the learned counsel of the assessee that the learned Commissioner of Income-tax (Appeals) has already passed an order in the case was found to be without basis as the appellate proceedings have not yet been decided. In these circumstances, it is held that the assessment order passed by the Assistant Commissioner of Income-tax, Circle, Panipat, on November 28, 2003, is erroneous in so far as....
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....dicial to the interests of the Revenue. The object of the aforesaid provision is to correct an order passed by the Assessing Officer which is erroneous and prejudicial to the interests of the Revenue as the Department has no remedy of appeal against the assessment order. Whether a revisional order fulfils the requirements of section 263 of the Act, depends upon facts of each case. 13. Section 263 of the Act has been a subject matter of interpretation in various decisions. The hon'ble apex court in Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC) ; [2000] 109 Taxman 66 (SC) has laid the following guiding principles for exercising jurisdiction under section 263 of the Act by the Commissioner of Income-tax : "6. A bare reading of this provision makes it clear that the pre-requisite to exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied with twin conditions, namely :(i) the order of the Assessing Officer sought to be revised is erro....
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.... a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the Revenue-Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC)." 14. The Delhi High Court in CIT v. Vikas Polymers [2012] 341 ITR 537 (Delhi), examining the scope of section 263 of the Act and analysing the circumstances under which revisional power can be exercised by the Commissioner of Income-tax, observed as under : "12. At the same time, the words 'prejudicial to the interests of the Revenue', as observed in Dawjee Dadabhoy and Co. v. S. P. Jain [1957] 311 ITR 872 (Cal), can only mean that 'the orders of assessment challenged are such as are not in accordance with law, in consequence whereof the lawful revenue due to the State has not been realized or cannot be realized'. Thus, the Commissioner's exercise of revisional jurisdiction under the provisions of section 263 cannot be based on whims or caprice. It is trite law ....
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.... of taxation. In the instant case, the assessee failed to do so, except averring in his reply that donors, V. K. Sharma and Vikram Awasthy, were his family friends and had abundant source of income. 18. The issue regarding receipt of money by way of gift from strangers had attracted the attention of this court on many occasions and, in our opinion, this issue is no more res integra. 19. In I. T. A. No. 12 of 2000, titled as CIT v. Udham Singh and Sons decided on December 20, 2013 [2014] 365 ITR 137 (P&H), this court while dealing with a situation where a gift was received by the assessee from a non-resident Indian with whom the assessee had no relationship, while relying upon various decisions rendered on the issue, held as under : "9. The matter of receipt of foreign gifts even earlier had engaged attention of the courts. This court in Lall Chand Kalra v. CIT [1981] 22 CTR 135 had held that non-resident Indian gift from a stranger was neither genuine nor valid. This judgment was followed in Jaspal Singh v. CIT (I. T. A. No. 256 of 2006 decided on September 15, 2006 [2007] 290 ITR 306 (P&H)), by this court as als....