TaxTMI 
TaxTMI 
2005 (7) TMI 36
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.... that they fall under section 68 of the Income-tax Act and were thus correctly added to the income of the assessee?" The present reference relates to the assessment years 1987-88 and 1988-89. The brief facts of the case as follows: The Assessing Officer issued notices under section 148 and during the course of assessment proceedings he noted that the assessee had declared a gift of Rs. 20,000 during the assessment year 1987-88 which was received from Shri Prem Narayan Singhal. The Assessing Officer further noted that a similar gift of Rs. 20,000 was received in the assessment year 1988-89 from Shri Rattan Lal. Both the donors were produced and their statements were recorded. The donors confirmed that they had made the said gifts of....
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.... have any direct relation and that the genuineness of the gifts could not be doubted simply on the ground that the donor and the donee had no direct relation. The assessee further stated that for making a gift no reason or occasion was required. He also stated that the absence of bank account or books of account of the donor could not be made a ground for rejection of the apparent state of affairs and that the law did not cast a liability on the person to maintain books of account. He also stated that there could not be a better proof than the statement of assets and liability disclosed in the course of assessment proceedings by the donors. The assessee also relied on the decisions reported in CIT v. Shamshuddin Manzoor Haque [1988] 172 ITR....
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....rge the responsibility of genuineness and creditworthiness if the entry is in the name of a relation. The Deputy Commissioner of Income-tax (Appeals) also observed that the contention of the assessee that as he had proved the identity of the person and the person was also confirming the gift was not enough, as the same was from a distant relation of the assessee. The Deputy Commissioner of Income-tax (Appeals) referred to the income-tax records of Shri Prem Narayan Singhal for the assessment years 1984-85 to 1987-88, wherein the income shown ranged between Rs. 15,100 and Rs. 18,100 and withdrawals shown ranged between Rs. 3,000 and Rs. 10,000 except in the assessment year 1987-88 when the withdrawals were shown at Rs. 28,040. The Deputy Com....
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....eputy Commissioner of Income-tax (Appeals), therefore, held that it was difficult to believe that the gift of Rs. 20,000 was genuine as it was against the facts of life. The Deputy Commissioner of Income-tax (Appeals) also observed certain discrepancies with reference to the statement of Shri Prem Narayan Singhal in relation to his employment with M/s. Sanjay Printers for a salary of Rs. 1,500 per month, where he got the salary only for the dates on which he attended the office and the salary was deducted for the period for which he had not attended the factory. He, therefore, concluded that as against the salary of Rs. 18,000 shown by the assessee, he may not have received salary Rs. 10,000 during the concerned year. Similarly the Deput....
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.... ultimate analysis he held that Shri Rattan Lal was not a man of means and that he could hardly meet his family expenditure and the capital of approximately Rs. 50,000 had to be used by him between 1983 and 1987 for his family needs. He, therefore, held that the gift was not genuine and confirmed the action of the Assessing Officer. On appeal before the Tribunal, learned counsel for the assessee made a reference to the definition of gift as given in section 2(xii) of the Gift-tax Act, 1958 and as given in section 122 of the Transfer of Property Act. He emphasised that the basic four ingredients for making the gift, as stipulated by the definition of "gift" given in the Act were fully satisfied. He further submitted that the gift of Rs. 2....
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....means to make the gift of Rs. 20,000 each in the relevant assessment years. Heard Sri Siddharth Verma, learned counsel for the applicant assessee (hereinafter referred to as "the assessee") and Sri A.M. Mahajan, learned standing counsel appearing on behalf of the Revenue and perused the order of the Tribunal and the authorities below. It is a settled principle of law that under section 68 of the Act if any amount is found credited in the books of account of the assessee the burden lies upon the assessee to prove its nature and source. While proving the same the assessee has to prove the identity of the person, genuineness of the transactions and creditworthiness of the person who has given the money. In the present case, though the id....