TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 787
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....The assessee submitted that gifts of Rs. 12.50 lacs each were received from two persons namely Shri Anil Kumar Gupta and Mrs. Sarita Mehta and filed a copy of gift deed of Rs. 12.50 lacs executed by Shri Anil Kumar Gupta. Therefore, vide order sheet entry dated 06.12.2007, the assessee was again asked to file necessary evidences and to produce donors. In response the assessee furnished following replies vide letter dated 07.12.2007: "That at this stage, while regretting our earlier statement that one of the two gifts were made by Smt. Sarita Mehta, wife of Sh. Ashish Mehta, A-17, Lawrence Road Indl. Area, New Delhi; may be treated as amended as her name was inadvertently mentioned due to sheer absence of mind, as both the gifts have been given by Sh. Anil Kumar Gupta, the only donor. (ii) That your good self has asked to produce the donor on 7th day of Dec. 2007 at 2.30PM. For certain reasons the donor Sh. Anil Kumar Gupta is not extending his hand of cooperation for the reasons best known to him a/one, even though both the gifts are bona fide and genuine and one of the gift deeds executed by Sh. Anil Kumar Gupta on 20-09- 2001 has been furnished by us with our letter dated 15-11....
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....ischarge. In the case of gifts, various courts have constantly held that assessee is required to prove identity and capacity of the donor and genuineness of the gift. In this case there is no relationship between the donor and the donee which made Sh. Anil Kumar Gupta to make such huge gifts to the assessee. Capacity and genuineness of the gift also remained unproved. There was also no occasion to make such gift. In the present case even the name of the donee is not known to the donor." 5. Therefore relying on a number of case laws, the A.O. held that assessee was not able to prove genuineness and creditworthiness of gift. Therefore, he made addition of the same u/s 68 of the Act. 6. Aggrieved, the assessee filed appeal before Ld. CIT(A) and submitted various submissions including his grievance of not getting chance to cross examine the donor. However, Ld. CIT(A) did not agree with the contention of the assessee and confirmed the addition made by A.O. by holding as under: "From the above statement of the donor, it is evidently clear that Sh. Anil Kumar Gupta has never given any gifts to his close relatives including brothers and sisters, as is evident from his answer to Question....
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....th donee, no occasion of making gift, the transactions of gifts of Rs. 25 lacs shown by the appellant from the donor were not genuine. Therefore, the AO. was justified in treating the credit of Rs. 25 lacs as unexplained credit and making addition u/s 68 being the appellant's income from undisclosed sources. Hence, the addition of Rs. 25 lacs is confirmed." 7. Aggrieved, the assessee is in appeal before us. 8. At the outset, Ld. A.R. submitted that Ld. CIT(A) has confirmed the addition on the basis of statement of Shri Anil Kumar Gupta, donor which was recorded at the back of the assessee. Assessee was not confronted and was not allowed to cross examine donor. He submitted that the statement was recorded on 18.12.2007 and the assessment order was passed on 20.12.2007. Therefore, he argued that the action of A.O. in not allowing cross examination of Shri Anil Kumar Gupta is against the principle of natural justice and, therefore, he prayed that the matter may be remitted back and the assessee be provided appropriate opportunity to cross examine the donor. The Ld. A.R. further submitted that at the time of recording statement the AR of the assessee was made to sit outside and A....
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....up to 2003 after which the business was closed due to losses. Therefore it was submitted by Ld. D.R. that a person who had incurred losses, how he could make a gift and that too to an unknown person and that too of a huge amount of Rs. 25 lacs. He further submitted that business loss cannot be said to have occurred in one year and therefore, losses must be accumulating for a couple of years and that is why he was forced to close its business and therefore, he argued that genuineness of gift was also not proved as a person incurring losses cannot be expected to make gifts and that too to unknown persons. Inviting our attention to answer to Question No.11, Ld. D.R. submitted that gift is always made out of natural love and affection and how it is possible that a person making gift did not know the address of the donee. Moreover it was submitted that the assessee had not made any gift to any of his relatives as per his answer to question No.9 therefore how it is possible that a gift was made to an unknown person. He submitted that even if the case is remitted back, it will not serve any useful purpose as Ld. CIT(A) has also decided the issue on merits. 10. Ld. A.R. in his rejoinder s....
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....T(A) but Ld. CIT(A) has rejected the same on the basis that the assessee could have requested the A.O. on the date of recording of statement itself for cross examination but he did not do so and he further held that affidavits of counsel and assessee and the donor were self serving documents. He further held that as per order sheet entry dated 18.12.2007, the statement was recorded in the presence of counsel of the assessee and therefore, there was no grievance to the assessee. Besides above findings the Ld. CIT(A) has also decided the issue on merits and has held that genuineness of transaction and creditworthiness of donor was not proved. From the above facts and circumstances, we find that even if the prayer of Ld. A.R. is accepted for readjudication, no fruitful purpose will be served as already a period of more than 12 years has passed after giving the so called gift and it is not possible that donor will recollect all things which he had not been able to answer after a period of 6 years from the date of making gifts. Further, we find that Ld. A.R. during proceedings before lower authorities or before us could not bring to our notice any other additional evidence other than al....