TaxTMI 
TaxTMI 
2020 (8) TMI 257
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....0,000/-; 2. That on the facts and circumstances of the case and in the law, the CIT (Appeals) has erred in confirming the addition on account of gifts u/s 68 notwithstanding that it is an admitted position by both the lower authorities that various documents, interalia, comprising of gift deed; ITR of donors, Balance sheet along with bank statement of donors are duly on record; 3. That on the facts and circumstances of the case and in the law, the CIT (Appeals) has erred in confirming the addition on account of gifts u/s 68 even though the CIT (Appeals) under identical circumstances has deleted said addition in case of family members of assessee for the same Assessment Year, the order of CIT (Appeals) been accepted by Revenue." 2. At the time of hearing, learned counsel for the assessee stated that the issues involved in these four appeals are similar and identical and the same can be disposed of by passing one order. For the sake of convenience, she argued the ITA. No. 1738/Del/2018 in the case of Smt. Meenu Jain Vs. Income Tax Officer, New Delhi. Therefore, I am first dealing with ITA No. 1738/Del/2018 (AY 2005-06) in the case of Meenu Jain vs. ITO and the re....
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.... the Authorized Representative of the assessee to produce donors for confirmation of gift transaction vide note sheet entry dated 15.05.2007, but the AR of the assessee failed to do so despite opportunity provided on 22.05.2006, 25.05.2007 and 11.06.2007. To verify the genuineness of the donor the Assessing Officer issued summons under section 131 of the Act to the donors on 04.06.2007 and sent by Registered Post to the three donors and they were asked to attend on 14.06.2007. The summons addressed to Sh. Narseh Jain was returned by the Postal Department with the remarks "No such address." The summons to the other two donors namely, Shri Gopal Bansal and Shri Umesh Jain were returned un-served by the Postal Department with the remarks "Left without address" and "No such person" respectively. This fact was confronted to the assessee and asked why the non-service of the summons on the donors should not be viewed adversely. In response to the same, AR of the assessee requested more time. But the donors were not produced for confirming the transaction of the gifts and the Assessing Officer confronted to the Authorized Representative of the assessee that the gift transactions appeared t....
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....t applicable in the case of the assessee. The AO has failed to discharge its duty to make proper examination of return of income by going through the documents available on record as such as the assessee never maintained any books of accounts for the relevant assessment year. She also draw my attention to the provisions of Section 44AA of the Act and stated that this provision clearly established that the assessee was not under obligation to maintain any books of accounts. Therefore, the finding of the Revenue authorities that the amount of Rs. 3,00,000/- was found credited in the books of accounts of the assessee and invoked the provision of Section 68 of the Act in the case of the assessee which is illegal and liable to be stuck down. In support of her contention she filed a paper book in which she has filed various orders of the Tribunal including the order passed in Vinesh Maheswari, Rima Maheswari Vs. Income Tax Officer, Ward 61(2)(3) New Delhi, dated 01.03.2019 in ITA. Nos. 7210 & 7211 (Del) of 2018 reported in (2019) 3 TMI 1118 - ITAT, Delhi and in Nitin Agarwal (HUF), Kailash Prasad Agarwal (HUF) and Manish Aggarwal (HUF) Vs. Income Tax Officer, Ward 30(1), New Delhi and In....
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....n account of unexplained bank deposit under section 68 of the income tax act. The argument of the assessee is that provisions of section 68 of the income tax at act apply only when the amount is credited in the books of accounts. In the present case the assessee does not maintain any books of accounts and therefore the amount deposited in the bank account of the assessee cannot be considered to be the amount credited in the books of accounts of the assessee and hence, the addition u/s 68 made by the learned assessing officer and confirmed by the learned CIT - A, is invalid. 18. The learned departmental representative vehemently supported the order of the learned assessing officer/CIT - capital and submitted that the amount has been deposited in the bank account of the assessee and therefore the addition is rightly been made under section 68 of the Income Tax Act. maintaining any books of accounts and therefore deposit made in the bank account of the assessee cannot be considered as an amount deposited in the books of accounts of the assessee and hence, the addition made u/s 68 of the income tax act stands vitiated and therefore it should be deleted. The first judi....
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.... Court has dismissed the same in 69 taxmann.com 219 [239 taxmann 264]. In view of this, even if the assessee does not maintain any books of accounts but the amount is deposited in the bank account of the assessee, which remains unexplained the addition could be correctly made u/s 68 of the act. Further looking at the definition of the "books or books of accounts‟ it is apparent that passbook is a daybook which is kept in the return form or as a printout of data stored in a floppy. Therefore, after the introduction of the definition of the books or books of account under section 2 (12A) of the act, the pass-book can also be considered as books or books of account. There is no distinction who writes it, but it is record of the transactions entered into by the assessee with the bank. The provisions of section 68 of the income tax act also does not make any distinction about who maintains the books of account, the only requirement is that the books should be of an assessee. There is no requirement that the books of account should be maintained by the assessee himself. In view of this, we do not find any infirmity in the order of the learned CIT - A, in confirming an addition of I....
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.... ITAT, Delhi Bench 'G' New Delhi reproduced above, I am of the considered view that the legal issue raised by the learned counsel for the assessee is decided in favour of the Revenue and against the assessee. 13. As regards to the merits of the case learned counsel for the assessee stated that the assessee has produced the gift deeds before the AO which was examined by him and made the addition in dispute by holding that the creditworthiness of the donor not especially verification of the donor was not arranged by the assessee, the amount denied to the assessee was found credited in the bank account of the donor through clearing cheque received on the same date when cheque was issued by him in respect of donation and love and affection between the donor and donee not found. She submitted that assessee has produced all the documentary evidence before the AO establishing creditworthiness of the donor but the AO failed to verify the same by using the power under Section 131 r.w.s. 133(6) of the Act. Therefore, the AO failed to discharge its duty so far as creditworthiness and sources of fund involved in the transaction of all the gifts are concerned. She further stated that no doub....
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....b & Haryana)/[2008] 304 ITR 145 (Punjab & Haryana) A gift cannot be genuine because the amount has come by way of cheque or draft through banking channels. The identity of the donor, his creditworthiness, relationship with the donee and the occasion are to be proved to be genuine. 2. Balbir Singh Vs CIT P&H High Court 2010 [2010] 8 taxmann.com 202 (Punjab & Haryana)/[2011] 196 Taxman 339 (Punjab & Haryana)/[2011] 334 ITR 287 (Punjab & Haryana) High Court affirmed findings of Assessing Officer and Commissioner (Appeals) holding that gift was not genuine 3. Jaspal Singh Vs. CIT P & H High Court 2006 (2007) 158 Taxman 306 (Punjab & Haryana)/[2007] 290 ITR 306 (Punjab & Haryana)/[2006] 205 CTR 624 (P & H) where assessee claimed to have received certain sum as giffs but failed to establish that donor had means and gift was genuine and was given out of natural love and affection, amount received as gift was correctly to be added to income of assessee 4. CIT Vs Anil Kumar Delhi High Court 2007 [2008] 167 Taxman 143 (Delhi)/[2007] 292 ITR 552 (Delhi) Assessee had received two gifts of certain amount from NRE accounts of two donors. Howe....
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.... to the assessee, which the assessee could not explain the source and genuineness of the gifts before the authorities below and requested that under the facts and circumstances of the case the appeals filed by the assessee may be dismissed. 16. I have heard both the parties on merits and perused the orders passed by the Revenue authorities and I am of the view that the Assessing Officer has examined the balance sheet annexed with the return of income filed by the assessee and found that the assessee has received Rs. 3,00,000/- by way of gifts and asked the assessee to furnish details of donors from whom gifts of Rs. 3,00,000/- were received. In response to the same the A/R of the assessee filed gift deeds along with the affidavits from the donors. After examining the same, the AO asked the assessee to explain the relationship between the assessee and donor which was replied by the assessee that these three donors are neither part of his family nor relatives of the assessee. I am of the view that when there is no relation between the assessee and donor the question of love and affection does not arise meaning thereby that the assessee could not establish the natural love and affe....