TaxTMI 
TaxTMI 
2014 (12) TMI 672
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.... officer that inspite of giving various opportunities, the assessee has not been able to establish the creditworthiness of his brother who has made gift of Rs. 1,66,01,834/-. Although assessee furnished various bank accounts but it was seen that there were cash deposits or cheque deposits in the bank accounts just before making the parts of the gift. Although confirmation from his brother and bank accounts evidencing that various transactions have been made through banking channels was furnished, but the creditworthiness of his brother was not established. The Assessing officer has specifically asked for the salary slips to verify the creditworthiness but the same were not furnished. Accordingly, the Assessing officer treated this gift as cash credit in the hand of the assessee observing that:- "9. It is noticed that Shri Sudeep Thomas was employed in the Gulf only from year 2003. His salary details are not furnished though as per his letter it is stated that same will be submitted. though he claims to have been engaged in consultancy services his licence/permit does not mention the same nor is nay evidence adduced for such activity. There is no evidence as to the nature of tran....
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....rved that after taking documents relating to identity and genuineness of transactions for the gift on record, the Assessing officer has repeated asked the assessee to explain the source of various credits in the bank account to prove the creditworthiness of assessee's brother. The CIT(A) observed that though the assessee furnished employment letters, but inspite of specific query, he did not furnish any salary slips from any of the employer either before the AO or before him. Thereafter, according to the CIT(A), only a statement showing that he is earning 25000/- dirhams per month was furnished. According to the CIT(A), even if it is presumed that this salary statement was correct which is not as no corresponding entries were seen in the bank accounts, then also the total annual income of the assessee's brother would be only Rs. 3,00,000/- dirham whereas he has made a gift of 11,50,510 dirhams and in this salary he would also need some portion for his own upkeep and for maintaining his family. Thus, the CIT(A) concluded that the assessee's brother Shri Sudeep Thomas does not have the capacity and creditworthiness to advance gift of Dirham 11,50,510 to the assessee. 4.1 According....
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....ained by the assessee. 4.4 In this context, the CIT(A) relied on the following decisions to hold that once the assessee has proved the identity of his creditors, the genuineness of the transactions and the creditworthiness of his creditors, only then the burden of the assessee stands discharged: 1) CIT vs. United Commercial and Industrial Co. (Pvt.) Ltd. (1991) 187 ITR 596 (Cal.) 2) CIT vs. Precision Finance Pvt. Ltd. (1994) 208 ITR 465 (Cal.) 3) Nemi Chand Kothari vs. CIT (2003) 264 ITR 254 (Gau.) 4) Kamal Motors vs. CIT (2003) 131 Taxman 155 (Raj.) 5) CIT vs. R.S. Rathore (1995) 212 ITR 390 (Raj.) 6) CIT vs. P.R. Ganapathy (2012) (26 taxmann.com 354 (SC). 7) CIT vs. P. Mohanakala (2007) (291 ITR 278) (SC). 8) Sunil K.M.P. vs. CIT (2009) 177 taxman 481 (Ker.) 9) MUMBAI vs. ITO (2010) 6 taxmann.com 28 (Mum.-ITAT). 4.5 In this case, according to the CIT(A), the assessee has not been able to prove the capacity and creditworthiness of the assessee's brother to make such huge gift either before the Assessing officer or before the CIT(A) and explanation was also not supported by any documentary evidence and therefore, the Assessing officer has added the amo....
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....have heard both the parties and perused the record. In this case, huge amount of Rs. 1,66,01,834/- was received from the assessee's brother, Shri Sudeep Thomas through banking channel. The claim of the assessee is that since Shri Sudeep Thomas has given the amount to the assessee who is his brother for the purpose of purchase of residential property. This amount received from the bank account of Shri Sudeep Thomas with ADCB Bank, Dubai was transferred to the bank account of the assessee in India. There is sufficient balance in the bank account of Shri Sudeep Thomas and being so, the capacity of Shri Sudeep Thomas to lend that much amount to the assessee cannot be doubted as he was employed as Consultant Engineer in an oil field in Dubai and he was also Managing Director of his own company. Being so, the assessee has proved the identity and source of source and therefore, addition cannot be made. 8. However, on examination of the bank account of the assessee's brother Shri Sudeep Thomas, various cash deposits have been made into his account and the assessee has not been able to explain the source of the credit in the account of Shri Sudeep Thomas. As per sec. 68 of the I.T. Act, ....