TaxTMI 
TaxTMI 
2014 (8) TMI 688
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....l is right in holding the gifts as genuine from 26 parties who were merely passing on the accommodation entries not only for the assessee but for other persons also ?" 3. The brief facts of the case are that the wife of the respondent, namely, Smt. Madhu Singla, who died on October 31, 2003, during the assessment proceedings, filed the return on October 15, 2001, for the assessment year 2001-02 showing her income as Rs. 1,99,950. She was called upon by the Assessing Officer to explain the following gifts amounting to Rs. 26 lakhs received from ten different donors : Sr. No. Name of the donor Amount in rupees 1 Shikha Aggarwal 1,50,000 2 Vinod Garg 3,50,000 3 Vinod Kumar 5,00,000 4 Krishna Gupta 2,50,000 5 Vishal Malhotra 2,50,000 6 Rajni Aggarwal 2,50,000 7 Madan Lal 2,50,000 8 Daya Shankar Aggarwal 2,00,000 9 Suraj Bhan Aggarwal 3,00,000 10 Balkishan Mittal 1,00,000 4. The respondent had represented the assessee in the capacity of legal representative of the deceased, Smt. Madhu Singla, and was asked to produce the donors to prove the creditworthiness of the gifts but....
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....ring the year has received gift from 10 persons detailed as given in the brief facts. The gifts were received through cheques/account payee demand draft. The assessee has filed the copy of the gift deed which consists of the complete address of the donor and the mode by which the gifts were received by the assessee. In the case of gift received from Vinod Kumar, Vinod Garg, Rajni Agrawal, Suraj Bhan Agrawal, Daya Shankar Agrawal, Shikha Agrawal, Madan Lal, Vishal Malhotra, Krishna Gupta and Bal Kishan Mittal, the assessee has filed the evidence to the fact that each of them is a regular income-tax assessee. In some cases the copy of the permanent account number, copy of the assessment order, copy of the last acknowledgment of filing the income-tax return and copy of permanent account number application were duly filed by the assessee. The evidence for this was filed before the Assessing Officer and which are available in the paper book. Shri Vinod Kumar and Shri Bal Kishan Mittal appeared before the Assessing Officer and their statements were recorded. They have confirmed that they have given the gift to the assessee. In the case of Mrs. Rajni Agrawal, Shri Suraj Bhan Agrawal, Daya....
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....ii) the genuineness of the transaction. 12. A perusal of order passed by the Assessing Officer reveals that an enquiry into the matter was got conducted and it was found that the alleged donors were not financially capable to make the gifts of such huge amounts in favour of the assessee and they had no relations nor was there any occasion to make the gift. The Assessing Officer noticed that in some cases, some days prior to making the transaction, the amount was deposited in the account of the donors and simultaneously they made the gift in favour of the assessee. In the case of Vinod Kumar donor, it was found that he used to deposit crores of rupees in his account and immediately after making the deposit, he would withdraw the amount by way of demand draft or issued cheques in the name of other persons. Similarly, in the case of the assessee, on March 22, 2001, he was in receipt of an amount of Rs. 17,03,000 and on the same day he got issued two different bank drafts, one in favour of the assessee for a sum of Rs. 5 lakhs and other for a sum of Rs. 12 lakhs favouring another beneficiary. Similar modus operandi was found in the case of Vinod Garg. It was found that the gift of R....
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....the "source of the source" but it has to satisfy the other sine qua non, viz., identity and capacity of the creditor and the genuineness of the transaction. No doubt, the assessee established the identity of the donors but the other ingredients to prove the genuineness of the transactions are conspicuously missing. A simple identification of the donor and showing the movement of the gift amount through banking channels is not enough to prove the genuineness of the gift. Since the claim of gift is made by the assessee, the onus lies on him not only to establish the identity of the person making the gift but also his capacity to make a gift and that it has actually been received as a gift. The fact finding enquiry conducted by the Assessing Officer in the matter had been overlooked by the Tribunal. The Tribunal overlooked the fact that the donors were not related to the assessee nor was there any occasion for them to part with such a big sum of Rs. 26 lakhs. 15. In the case of Tirath Ram Gupta v. CIT [2008] 304 ITR 145 (P&H), it was held that a gift cannot be accepted as such to be genuine, merely because the amount has come by cheque or draft through banking channels, unless the ....