TaxTMI 
TaxTMI 
1997 (9) TMI 134
X X X X Extracts X X X X
X X X X Extracts X X X X
....r. J.J. Kansagara is the Karta. 2. The common grievance projected in all these appeals by the Revenue is that the learned Dy. CIT(A) is not justified in directing the Assessing Officer to exclude the amounts of gifts received by the assessees and held by the Assessing Officer as non-genuine, from the total income of the assessees. 2.1 Dr. J.J. Kansagara (Individual) received the following gifts:- Asstt. Year 1984-85 Rs. 25,000 From Shri Madhavbhai Shambhubhai Rs. 10,000 &....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Khimji Gokulbhai 2.2 Dr.(Smt.) Daxaben J. Kansagara received the following gifts:- Asstt. Year 1984-85 Rs. 25,000 From Shri Liladhar Bhimji Rs. 25,000 From Shri Mohanbhai Lavjibhai ------------ Rs. 50,000 ------------ Asstt. Year 1985-86 &nb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad not given gifts to their own children but to these strangers who belong to higher strata of society. He further noted that the donees received the gifts in a short period and that the action of the villager donors to come to Rajkot and making of gifts were stage managed. The donors did appear before the A.O. during the course of gift tax proceedings and confirmed that they had made gifts to the donees by cheques and that they had made gifts out of their savings out of agricultural income. They also furnished evidence in respect of agricultural holdings held by them. The A.O. completed the gift-tax assessments on protective basis, holding that it would not appeal to the human common sense that illiterate agriculturists would give gifts of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re much advanced than the donors in the matter of education, status and riches. He further submitted that the gift-tax assessments in the cases of the donors were completed by the GTO on protective basis and till today such assessments are only on protective basis and the assessees cannot take the benefit of the fact that since the amounts have been subjected to gift-tax in the hands of the donors the same should not be treated as the undisclosed income of the donors as proceedings in the I.T. Act and the Gift-tax Act are distinct and independent. 6. Shri R.T. Shah, the learned counsel for the assessees reiterated the submissions made before the Dy. CIT(A). He submitted that the donors appeared in person before the G.T.O. and their state....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ueer behaviour of the assessees is contrary to the normal human behaviour and cannot be ignored off. It is well settled law that the taxing authority can take note of surrounding circumstances-CIT v. Durga Prasad More [1971] 82 ITR 540 (SC). In Sumati Dayal v. CIT [1995] 214 ITR 801/80 Taxman 89 (SC) the Apex Court has held that considering the surrounding circumstances and applying the test of human probabilities is a must. Applying the test of human probabilities it cannot be accepted that the gifts received by the assessees from the agriculturists were genuine ones. The fact that the gifts were received by cheques/ drafts has no relevance because as held by the Hon'ble Calcutta High Court in the case of CIT v. Precision Finance (P.) Ltd ....