TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 1039
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....11 and 2011-12 on March 29, 2010, February 25, 2011, and February 17, 2012, disclosing a total income of Rs. 3,28,544, Rs. 4,01,691 and Rs. 6,03,632, respectively. A survey operation under section 133A of the Income-tax Act, 1961 (hereinafter called as "the Act") was conducted in the business premises of the assessee on July 6, 2012. During the course of survey operation, certain incriminating documents were impounded which revealed suppression of professional receipts. The post-survey investigation reveals that during last 3 financial years, the assessee has made substantial investments in various firms in the form of share capital and loans to the extent of Rs. 1,05,50,000 and the sources for the investments in the said firms were claimed to be out of gifts received from his brother to the tune of Rs. 1,02,07,400 during the subject years and also out of his past savings for the relevant financial years. During the course of survey operation, while recording statement under section 131 of the Act, the assessee had admitted additional income of Rs. 14 lakhs each for the assessment years 2010-11 and 2011-12. Subsequently, the Assessing Officer issued a notice under section 148 of th....
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.... donor, sources of the donor and also proof of transfer of money through banking channel. The assessee further submitted that the Assessing Officer has summoned the donor under section 131 of the Act and the donor has personally appeared before the Assessing Officer and stated that he had given gifts of Rs. 1,02,07,400 to his brother for last three financial years. The donor also furnished details of his bank account, proof of his sources of income to substantiate the capacity to give gifts and also proof of transfer of money through money exchange. Inspite of producing all the details, the Assessing Officer disowned all details furnished by the assessee and made additions towards gifts as unexplained. 5. The Commissioner of Income-tax (Appeals), after considering the relevant submissions of the assessee, confirmed the additions made by the Assessing Officer towards alleged gifts for the assessment years 2009-10 and 2010-11, however, allowed partial relief of Rs. 20 lakhs for the assessment year 2011-12 and confirmed the balance amount of Rs. 44,17,400. The Commissioner of Income-tax (Appeals) further held that the assessee has failed to correlate the alleged gifts stated to be re....
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.... by the Assessing Officer towards alleged gifts for the assessment years 2009-10 and 2010-11. As regards the assessment year 2011-12, out of total gifts of Rs. 64,17,900, deleted gifts to the extent of Rs. 20 lakhs and the balance amount of Rs. 44,17,420 has been confirmed. Aggrieved by the Commissioner of Income-tax (Appeals) order, the assessee as well as the Revenue are in appeal before us. 6. The learned authorised representative for the assessee submitted that the Commissioner of Income-tax (Appeals) was erred in confirming the additions made by the Assessing Officer towards the alleged gifts as unexplained credits, in spite of furnishing all the details such as bank statements of donor and donee, bank transfer vouchers for having remittance of money to India and also sources and capacity of the donor to give gifts. The authorised representative further submitted that the donor and the donee are brothers. The assessee has received gifts from his brother, Shri V. Bala Sudhakar, out of natural love and affection on various occasions for which necessary details of bank transfer vouchers and credits in the assessee's bank account corresponding with deposits in the donor's....
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....ommissioner of Income-tax (Appeals) erred in allowing partial relief of Rs. 20 lakhs towards alleged gift to the assessee, as the assessee has failed to prove the genuineness of gift and also the creditworthiness of the donor. Though the assessee furnished proof of transfer of money from abroad to his account, the donor does not have sufficient source of income to give gift to his brother. Under these circumstances, the Assessing Officer has rightly made additions towards alleged gift and his order should be upheld. 8. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The Assessing Officer made additions towards alleged gifts stated to be received from his brother, Shri V. Bala Sudhakar for the reason that the assessee has failed to prove genuineness of gifts received from his brother and also capacity of the donor to give gifts. The Assessing Officer was of the opinion that the assessee has received periodical amount from his brother in the guise of gifts, however, there is no occasion for the donor to give gift to his brother and the gifts stated to be received from his brother are given over a period ....
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.... Assessing Officer further alleged that the assessee has received periodical gifts from his brother according to his necessity and there is no occasion for the donor to give gifts to his brother. We do not agree with the findings of the Assessing Officer, for the reason that once the relationship is established between the donor and the donee, there is no reason for the Assessing Officer to doubt the gifts by stating that there is no occasion for giving gifts. Normally, gifts are made by relatives through love and affection and do not necessarily require any particular occasion, when the identity and capacity are proved beyond doubt. In the absence of anything to show that the transaction was by way of money laundering, the addition could not be made towards gifts, when the identity of the donor and genuineness of the transactions is proved to the satisfaction of the Assessing Officer. The burden cast upon the assessee stands discharged, the moment the assessee proves the identity and genuineness of the transactions. The assessee cannot be further required to prove sources of the money out of which gifts are given. Therefore, we are of the view that the Assessing Officer was comple....
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....ount on 2 occasions. The sources for the above two amounts were transferred from his brother, Shri V. Bala Sudhakar, bank account with ICICI Bank. The donor, Shri V. Bala Sudhakar, has made telegraphic transfer of funds from abroad through banking channel. On a perusal of the details filed by the assessee, we find that the entire gift amount of Rs. 22,90,000 has been correlated with corresponding credits in the donors bank account, further supported by transfer vouchers for having transfer of money from abroad to his Indian bank account. From the above facts, it is clear that the entire amount of Rs. 22,90,000 stands explained and also correlated to the bank account of Shri V. Bala Sudhakar. 12. Coming to the assessment year 2011-12. Out of the total gifts of Rs. 64,17,400, the Commissioner of Income-tax (Appeals) has allowed partial relief of Rs. 20 lakhs. On a perusal of the order passed by the Commissioner of Income-tax (Appeals), we find that the Commissioner of Income-tax (Appeals) has correlated entries in the bank account of the assessee to the credits in the bank account of the donor with necessary money transfer vouchers. The Commissioner of Income-tax (Appeals), allowed ....
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....ion letters. On a perusal of the details filed by the assessee, we find that out of Rs. 21,16,631 a sum of Rs. 5 lakhs received on February 2, 2011, from M/s. Pradhan Hospitals Pvt. Ltd. towards repayment of investment made by the assessee. To this effect M/s. Pradhan Hospital Pvt. Ltd. has issued a confirmation letter. The assessee further submitted that a sum of Rs. 2,99,000 received from his wife, Smt. (Dr.) K. N. Satyamba, on March 15, 2007, vide cheque No. 312277. Similarly, he had explained the sources for the remaining amount with necessary confirmation letters. But the fact remains that the assessee has initially claimed that the total amount is received from his brother, subsequently changed his argument and stated that the balance amount is received from his friends and relatives. Therefore, we are of the view that the assessee is able to explain the sources to the extent of Rs. 43,00,789 out of the total gift of Rs. 64,17,400. Therefore, we are of the view that the assessee has proved the identity, genuineness and the capacity of the donor to the extent of Rs. 43,00,789 and the remaining amount of Rs. 21,16,611 remains unproved. 14. Coming to the case law relied upon by....
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.... to a 'substantial question of law'. A question of fact may, however, partake of the nature of a substantial question of law if the process of reasoning or the reasons assigned are perverse and/or arbitrary or relevant facts have been ignored or misconstrued. A set of facts may admit, as they often do, to two different and diametrically opposing views but interference under section 260A of the Act, would only be warranted, if findings are so incomprehensible as to be perverse and/or arbitrary. If, however, the findings admit to two views and the view adopted by the Tribunal is plausible, though debatable, a court exercising power under section 260A of the Act, must desist from substituting its own opinion for the opinion of the Tribunal. The quantum of tax or the alleged amount of evasion are irrelevant as what is relevant is the substantial question of law that arises for adjudication. The assessee replied to the queries, addressed by the Assessing Officer, disclosed the identity of the donors and denied that the gifts were his income. The assessee produced Dr. O. S. Gill, before the Assessing Officer, who stated that he had an annual income of $ 12,0000. The Assessing Of....
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....ve and cannot form the basis for raising an inference against an assessee. The Assessing Officer was apparently over-awed by the amount of the gift and, therefore, proceeded to base his opinion on his perception that no one would gift such a large amount. A deeming provision requires the Assessing Officer to collect relevant facts and then confront the assessee, who is thereafter, required to explain incriminating facts and in case he fails to proffer a credible information, the Assessing Officer may validly raise an inference of deemed income under section 69A of the Act. As already held, If the assessee proffers an explanation and discloses all relevant facts within his knowledge, the onus reverts to the Revenue to adduce evidence and only thereafter, may an inference be raised, based upon relevant facts, by invoking the deeming provisions of section 69A of the Act. It is true that inferences and presumptions are integral to an adjudicatory process but cannot by themselves be raised to the status of substantial evidence or evidence sufficient to raise an inference. A deeming provision, thus, enables the Revenue to raise an inference against an assessee on the basis of tangible ma....
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....donor and his source of money. The onus to probe and prove this aspect lies upon the Revenue and not upon the assessee, particularly where the income is being dealt with under a deeming provision. A person who receives a gift, is not required to prove the source of the money of his donor. One cannot be oblivious to the fact that such a large gift received from a foreign country is bound to raise suspicion but cannot disre gard the fact that suspicion and doubt cannot replace proof or trans late into reasons, much less reasons for invoking a deeming provision to hold that gifts represent the income of the assessee, particularly in the absence of relevant facts. A further perusal of orders passed by the Assessing Officer reveals that he proceeded as if the entire onus lay upon the assessee, ignored the material received from the Central Board of Direct Taxes from the Inland Revenue Service, Great Britain and failed to follow the matter any further with respect to Shri Varinder Sharma and on the basis of suspicion, held that gifts are not genuine. Having already held that it was for the Revenue to proceed to investigate the matter further, I find no error in the opinion recorded by th....