TaxTMI 
TaxTMI 
2007 (7) TMI 290
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....The Revenue succeeded in persuading the Tribunal to refer the following question of law under section 256(1) of the Income-tax Act, 1961 (for brevity "the Act"), for the opinion of this court : "Whether, on the facts and circumstances of the case, the learned Income-tax Appellate Tribunal was right in law to hold that the addition to the capital of the partner is not cash credit in the books of account of the firm but is cash credit in the case of the partner ?" 2. The facts as emerge from the statement of the case are that M/s. Kulwant Industries, Jalandhar (to be referred as "the assessee"), is a partnership firm, which has four partners. The assessee-firm derives its income from manufacture and sale of oil engine parts. It filed it....
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....ve also been taken as genuine because the donee has not given gift to his own relations. The Assessing Officer and the Commissioner Income-tax (Appeals) has taken into account circumstantial evidence as well as preponderance evidence into consideration. However, the authorities below have not denied the existence of NRE account maintained by the donor. The remittance of NRE account will come only from foreign earnings. The account is treated as genuine as no defect or non-existence of account is mentioned in the finding of the Assessing Officer. The donor is also identified and the payment has been made by way of gift and as such payment is made through the cheque. The basic ingredients of cash credit is source of money and income and genui....
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....Gupta [1987] 165 ITR 36. The Supreme Court after detailed review of various judgments of the High Courts expressed the opinion that each case must be decided on the facts of that case. It was observed that when the assessee has a credit account with a firm or with the family or with a banking company and that sum is available to the firm or the company or Hindu undivided family on the date of the gift then valid gift by book entries might be possible but where the same was not available with the firm or the family or a company, which was not a banking company or which had no overdraft facilities, mere book entries, even though there was acceptance of that gift by the donee, would not effectuate a valid gift. Referring to various ingredients....
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....on the basis of which it could honour the instructions given by the assessee." 6. In the case of Ku. Sonia Bhatia v. State of U. P., AIR 1981 SC 1274, the hon'ble Supreme Court considered the expression "gift" in the light of section 122 of the Transfer of Property Act, 1882, holding that a gift must have two initial characteristics, namely, (a) it must be made voluntarily ; and (b) it should be without consideration. The aforementioned ingredients were apart from the requirement of acceptance during the life time of the donor while he is still capable of giving acceptance. 7. When the facts of the present case are examined in the light of the views expressed by the hon'ble Supreme Court, it becomes evident that the donor in the prese....