TaxTMI 
TaxTMI 
2017 (6) TMI 867
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....ddition of Rs. 300000/- made by the Ld. Assessing Officer and confirmed by the Learned Commissioner of Income Tax (Appeals)-II, Ludhiana is Illegal, Unwarranted, uncalled for and needs to be deleted." 3. In the aforesaid ground the assessee has challenged the action of the Ld. CIT (Appeals) in upholding the addition made by the Assessing Officer u/s 68 of the Income Tax Act, 1961 (in short 'the Act') on account of gift of Rs. 1,25,000/- received by the assessee from one Shri Krishan Gopal and Rs. 1,75,000/- from Smt.Anita Garg. 4. Brief facts relevant to the issue are that during assessment proceedings the Assessing Officer noted that the assessee had received Rs. 1,25,000/- and Rs. 1,75,000/- as gifts from Shri Krishan Gopal and Smt.Anita Garg respectively. On being asked to furnish the evidence of their source and occasion for making the gifts, the assessee contended that Smt.Anita Garg who was the sister-in-law of the assessee had given a draft of Rs. 1,75,000/- as gift which was made from her saving bank account No.00092010014940 with OBC, Patiala. Similarly, Shri Krishan Gopal, husband of Smt.Anita Garg was stated to have given him a draft of Rs. 1,25,000/- as gift which was....
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....in making addition on account of the same u/s 68 of the Act. The relevant finding of the CIT (Appeals) at para 4.3 of the order is as under: "4.3 I have carefully considered the appellant's submission. I have also gone through the assessment order. It is seen that the appellant has completely failed to bring cogent evidence to prove the, creditworthiness of the person w.r.t whom, it has claimed to receive gifts during the assessment year. On the perusal of the assessment order as well as the submission filed by the appellant, it is gathered that the appellant had received gifts from Sh. Krishan Gopal of Rs. 1,25,000/- and Rs. 1,75,000 from Smt Anita Garg. The Assessing Officer has brought out the credit worthiness of the person from whom the appellant has claimed to received gifts during the assessment year. The Id. Assessing officer has clearly brought out this fact that in both cases just before the advancement of gifts, there have been incidents of cash deposits within a week's time. In the case of Sh. Krishan Gopal, while he has purchased a draft of Rs. 1,25,000 on 09.05.2008, out of his saving bank account of Oriental Bank of Commerce, Patiala, there has been deposit....
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....s. Jawahar Lal Oswal & Ors. ITA No.49 of 1999 (P&H) 8. The Ld. DR, on the other hand, relied upon the orders of the CIT (Appeals) and the Assessing Officer. 9. We have heard the contentions of both the parties, gone through the orders of the authorities below and perused the documents placed before us. 10. The issue in the present case pertains to disallowance made u/s 68 of the Act on account of gifts received from two persons Smt.Anita Garg of Rs. 1,75,000/- and Shri Krishan Gopal of Rs. 1,25,000/-. The addition, we find, has been made for the reason that the creditworthiness of the donors was not proved. The Ld. counsel for the assessee has contended that the bank statements of the donors had reflected the amount of gift made by virtue of bank drafts made from the aforesaid bank account thus proving the creditworthiness of the donors. The Ld. DR, on the other hand, relied upon the findings of the Assessing Officer and the CIT (Appeals) in this regard that immediate cash deposit before making the gift, and evidence of source of the cash deposit could not be successfully established by the assessee clearly resulted in the genuineness of the gift not being established. 11. We f....
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.... Rs. 43,304/- and loans and advances of Rs. 2,96,500/-. Her total income for the year was Rs. 1,37,866/- as reflected in her Balance Sheet. Similarly, Shri Krishan Gopal the other donor had a total capital of Rs. 3,81,117/- which included cash of Rs. 67,300/- and loans and advances of Rs. 1,98,500 and his total income was Rs. 1,08,238/- for the impugned year. During discussion the assessee had stated that the source of cash deposited in the bank by these persons for the purpose of making gifts was their cash in hand and realization of advances but clearly the same are not sufficient enough and it is not probable their entire advances and cash were deposited for making gift to a person who was of much higher means than the donors and that too for no rhyme reason or for any occasion. Clearly, therefore, the creditworthiness of the donors has not been established in the present case. As pointed out by the Assessing Officer in para 2.2 of his order that if these persons had gifted the amounts as mentioned, it would mean that they had gifted their entire liquid resources to the assessee and keeping in view the fact that these donors were medically unfit, undergoing treatment at PGI in w....
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....he explanation of the assessee that they had liquidated their entire advances given to others to make the impugned gifts does not appear to be credible considering that no prudent person would liquidate his entire assets to gift it to somebody when there was no occasion to do so either and also considering the fact that the donors were ill and required treatment in hospitals and on medication. Thus even as per the decision relied upon by the Ld.Counsel in the case of Jawahar Lal Oswal, the addition made is warranted since after the assessee discharged its onus of proving the genuineness of the transaction by filing relevant documents, the Assessing Officer pointed out from the very same documents that the creditworthiness of the donors was not established, which we find the assessee has not been able to displace since no credible explanation was offered nor were the donors produced for cross examination when asked by the Assessing Officer to do so. 14. In view of the above, the addition made of the gifts u/s 68 of the Act amounting to Rs. 3,00,000/- is therefore upheld. Ground No.1 raised by the assessee is, therefore, dismissed. 15. Ground No.2 raised by the assessee reads as un....
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....ng Officer calculated the sale consideration received for the land at Rs. 6,73,600 (Rs.7,20,000 - Rs. 46,400). Thereafter the Assessing Officer applied the rate approved by the revenue authorities in the impugned year at Rs. 2600 per sq.yd. and arrived at the value of the land comprising of 269.4 sq.yd. at Rs. 7,00,440/-. Thus the Assessing Officer concluded that the amount shown as per sale consideration by the assessee for the impugned land at Rs. 6,73,600/- fell short of the Revenue approved value at Rs. 7,00,440/- by Rs. 26,840/- and made addition of the same u/s 50C of the Act. The Ld. CIT (Appeals) upheld the addition made. 18. Before us the Ld. counsel for the assessee contended that section 50C was not applicable in the said case at all since for the purpose of section 50C the stamp duty value assessed for the purpose of payment of stamp duty is deemed to be the full value of consideration received or accruing as a result of such transaction. In the present case since the capital gain has been computed on the basis of agreement to sell no stamp duty value was assessed for the impugned land. Ld Counsel for the assessee relied upon the decision of Navneet Kumar Thakkar vs. I....
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....e provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer. 21. As per the said section the consideration received or accruing as a result of transfer of a capital asset being land or building is substituted by the value of "adopted or assessed" by the stamp valuation authority for the purpose of payment of stamp duty in respect of such transfer if the said value exceeds the sale consideration received or accruing. In the present case since the transfer took place under an agreement to sell which is not registered, there was no question of its value being assessed by the stamp valuation authority and, therefore, the provisions of section 50C of the Act in the present case, we hold, does not come into play at all. The I.T.A.T. Jodhpur Bench in the case of Navneet Kumar Thakkar Vs. ITO (2008) 110 ITD 525 has held that section 50C does not apply to the cases where the transfer of property is not s....
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....0C in pursuance of the amendment made by Amendment Act 2 of 2009, we fail to understand as to how the Revenue can canvass the same issue in this case which in effect is against the circular issued by the Board. Certainly, the Revenue is bound by the circular issued by the Board. At this juncture, it is pertinent to note that in a decision made in the case of State of Tamil Nadu and another Vs. India Cements Ltd. and another reported in (2011) 40 VST 225 (SC), the Honourable Supreme Court has held that the circulars issued by the Revenue are binding on the Department and therefore, they cannot repudiate that they are inconsistent with the statutory provisions. Relevant paragraphs 21 and 22 are extracted hereunder: "21. It is manifest from the highlighted portion of the circular that as per the clarification issued by the Commissioner of Commercial Taxes, in exercise of the power conferred on him under Section 28A of the TNGST Act, the benefit of the sales tax deferral scheme would be available to a dealer from the date of reaching of BPV or BSV, whichever is earlier, as is pleaded on behalf of the first respondent. It is trite law that circulars issued by the Revenue are binding ....