TaxTMI 
TaxTMI 
2011 (8) TMI 1184
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....fairly conceded that he has instructions from assessee not to press this issue and accordingly, the same is not pressed. As the issue is not pressed, we dismiss the same as not pressed. 3. The next common issue in these three appeals of the assessee on merits is against the order of CIT(A) confirming additions made by Assessing Officer on account of gift received from followings in respective assessment years: Name Assessment Year Amount (Rs.) Sri Deepak Kumar Changia 2003-04 3,00,000 Shri Jagdish Prasad " 3,00,000 Shri Anil Gupta " 2,00,000 Shri Deepak Kumar Gupta 2004-05 5,00,000 Shri Rajesh Maheswari 2005-06 5,00,000 Shri Brijesh Kumar 2002-2003 5,00,000 4. Brief facts relating to above issue are that Assessing Officer received information from Investigation Wing of the Department, New Delhi that assessee has been a beneficiary of racket involving persons provided bogus gift entries. Assessing Officer noted that it has received certain investigation findings and in this investigation it was informed that these persons given gifts to the assessee, who are not traceable as the summons sent to them returned unserved by postal authorities. Assessing Officer wa....
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.... issued him a cheque of ₹ 2,00,000, as a gift. He submitted that this was basically an adjustment entry for which he received ₹ 5,000/- as commission @ 2.5%. From this statement of Shri Anil Gupta it is clear that the gift of ₹ 2,00,000/- claimed to be received by the assessee from him is not genuine." Similar are the addition in respect of Assessment Year 2004-05 in ITA No.123/K/2011 wherein the gift received from Deepak Kumar Gupta amounting to ₹ 5,00,000/-was added exactly on similar circumstances and confirmed by CIT(A) by holding as under: "As described above in this case also it is found that the person who is shown to have given gift to the assessee is not even distantly related to the assessee. He even does not know where does the donor reside. Thus, this gift is highly improbable. Over and above this the so called donor has not responded to the summons issued by the A.O. and even the assessee has failed to produce him despite having been given opportunity by the A.O. In view of the above discussion I hold that the assessee has failed to prove that the amount of ₹ 5,00,000/- claimed to be received from Shri Deepak Gupta is genuine gift from ....
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....try from which he had earned 2.5% as commission. Shri Deepak Kr. Changia and Shri Jagdish Prasad could not be produced by the assessee even though he was requested by Assessing Officer. In view of the above facts, the first question arises whether the Assessing Officer has ever tried to verify the income tax records of these three donors and in case, the Assessing Officer has not verified the income-tax and wealth-tax record despite having I.T. and W.T particulars and acknowledgment of returns before him, it cannot be said that Shri Deepak Kr. Changia and Shri Jagdish Prasad have no creditworthiness as the assessee is able to prove from bank statements and affirming by affidavits the creditworthiness of these donors. In respect to Shri Anil Gupta, who first admitted on oath that he had given ₹ 2,00,000/- to Shri Abhishek Mohta vide statement dated 14.8.2008 and subsequently retracted by stating that this ₹ 2,00,000/- was received from Shri Abhishek Mohta, the assessee and deposited in his account and basically this is an entry to earn commission @ 2.5%. Now, we are guided by the decision of Hon'ble Calcutta High Court in the case of CIT Vs. Eastern Commercial Enterprise....
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.... Securities Pvt. Ltd. was a declared defaulter with effect from 16.06.1999. When this was brought to the notice of the assessee, the assessee submitted that she should be allowed to cross examine the broker and also stated that the broker had also filed an affidavit confirming the transactions with the assessee. The assessee's stand was rejected by the Assessing Officer in the course of the earlier reassessment proceedings on the ground that since the affidavit from the broker was obtained by the assessee herself; there was no need to allow cross examination. As regards M/s Richmond Securities Pvt. Ltd., NSE was given the relevant details of the contract note / broker bills, etc. with a request to verify the same with their records and in response thereto NSE stated that the trade numbers mentioned in the contract notes were incomplete and not in conformity with NSE's system of maintaining the trade numbers. From this the Assessing Officer inferred that the contract notes contained bogus numbers. On these facts the Assessing Officer in the course of the earlier reassessment proceedings held that the assessee had declared bogus purchase and sale of shares and shown bogus capital gai....
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....al held in the case of Mr. Sandeep R Shorewala, HUF (supra) that the case of Mukesh A Marolia was factually of the same matrix except for the aspect relating to the affidavit given by Shri Mukesh Choksi and in this view of the matter it was held by the Tribunal that there was no basis for the addition. 24. In the present proceedings the only additional feature is that Shri Mukesh Choksi had given a statement on 27.11.2008 before the Assessing Officer and also confirmed it by an affidavit dated 04/05.12.2008. This aspect has been taken care of by the CIT(A) by relying on the judgment of the Calcutta High Court in the case of CIT vs. Eastern Commercial Enterprises (supra) in which the High Court observed that a man indulging in double speaking cannot be said to be a truthful man at any stage and no Court can decide on which occasion he was truthful. Apart from this, what we find is that the statement and the affidavit relied upon by the Assessing Officer in the present proceedings merely reiterate Shri Mukesh Choksi's earlier statement given in the course of the search operations in his case. They do not carry the case of the department much ahead. The earlier statement of Shri Muk....
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....notices u/s. 131 of the Act, which remained unserved. We find that the assessee has discharged the initial onus which lays on him in terms of section 68 by proving the identity of donors by giving their complete addresses, Permanent Account Nos., copies of Balance Sheet and P & L Accounts. It has also proved the capacity of the donors by showing that the amounts were received by assessee by way of account payee cheques drawn from bank accounts of donors and the assessee was not expected to prove the genuineness of cash deposited in bank accounts of those donors. We are of the view that revenue, apart from issuing notices under section 131 of the Act, despite the fact that it was having complete addresses submitted by donors itself, did not pursue the matter further. The Revenue did not examine the source of income of the said donors to find out whether they were creditworthy. There was no effort made to pursue donors. In these circumstances, assessee could not do anything further. This view of our is supported by the decision of Hon'ble Gujarat High Court in the case of DCIT v Rohini Bui lders (2002) 256 ITR 360 (Guj) wherein i t held as under: - "3.14 I have considered the facts....
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.... it is found untrue. Further, the AO in the remand report has mentioned that relevant records are not traceable and the cash credits introduced in the aforesaid two names are not subject to verification and cannot be treated as satisfactorily explained. The appellant has already submitted the copies acknowledgements of returns filed by the cash creditors and thus discharged his onus and if AO is not able to verify it because Return Receipt Register is not traceable, it is not appellant's fault and, the appellant should not be penalized by making huge additions. Having considered the facts of the case carefully, submissions of the AR, observations of the AO in the assessment order as well as in the remand report and also considering the decisions, referred to above, the addition made by the AO is uncalled for and not justifiable on account of unsecured loans received by the appellant. The addition made by the AO of ₹ 1,92,18,600/- is, therefore, deleted." Further, we find that this issue is covered by the decision of the Hon'ble Apex Court in the case of CIT, Orissa -vs.- Orissa Corporation P. Ltd. reported in (1986) 159 ITR 78, wherein Hon'ble Apex Court held that "in this c....