2002 (11) TMI 24 - HC - Income Tax

1. Whether, Tribunal was justified in law in holding that the amount of Rs. 3 lakhs received by the assessee/appellant is not in the nature of gift but is an income from undisclosed sources? - 2. Whether, Tribunal was justified in law or true interpretation of the provisions of law under section 68 or under section 69 in holding that as per the requirement of raw the appellant has not discharged the burden on him in respect of the said transaction of gift and arriving at the conclusions which are not relevant to the issue and hence the findings are perverse as the conclusion is based on no material on record and finding that Rs. 3 lakhs is the income of the appellant from undisclosed sources is bad in law? - Having regard to the inquiries conducted by the Assessing Officer from the bank, with which the assessee was admittedly confronted and bearing in mind the fact that admittedly said Subhash Sethi was not related to the assessee, we are of the view that the findings recorded by the Tribunal are pure findings of fact warranting no interference. We find it difficult to hold that on the facts of the instant case proper opportunity had not been granted to the assessee to prove the gift.

Summary

Issues:
1. Whether the amount received by the assessee is a gift or income from undisclosed sources?
2. Whether the assessee has discharged the burden of proof regarding the transaction of gift?

Issue 1:
The case involved an appeal under section 260A of the Income-tax Act, 1961, regarding an amount of Rs. 3 lakhs claimed as a gift by the assessee for the assessment year 1993-94. The Assessing Officer suspected the genuineness of the gift due to discrepancies in the documentation and information received. The Tribunal affirmed the Assessing Officer's decision, considering various factors such as discrepancies in dates, signatures, and contradictory statements by the alleged donor. The Tribunal emphasized that mere banking transactions were insufficient to prove the genuineness of the gift. The court held that the burden of proof lay on the assessee to establish the identity of the donor, their capacity to gift, and the actual receipt of the gift. As the Tribunal's findings were based on facts and proper opportunities were given to the assessee, the court found no substantial question of law and dismissed the appeal.

Issue 2:
The assessee contended that the assessment order was violative of natural justice as the Assessing Officer relied on a letter without confronting the assessee and that the burden of proof was discharged through submitted documents. The assessee argued that since the donor was not in India, he could not be produced before the Assessing Officer. However, the court disagreed with the assessee's arguments, upholding the Tribunal's findings. The court reiterated that the burden of proof regarding the gift rested on the assessee, and mere identification of the donor and banking transactions were insufficient. As proper opportunities were provided to the assessee and the findings were factual, the court found no legal question arising from the order and dismissed the appeal for lack of merit.