2012 (8) TMI 954 - HC - Income Tax

Unexplained cash credit within the provisions of S. 68 - Held that - From the facts it was disclosed that the assessee had furnished the gift deed, bank certificate, copy of passport as well as copy of return of income filed by the donor. These documents would sufficiently establish the identity and creditworthiness of the said named party. The Assessing Officer simply brushed them aside. The confirming findings recorded by the Tribunal were based upon the facts and material relevant to the issue before it. They were findings of facts and in the realm of appreciation. When the findings are of factual in nature and properly arrived at, and when they are in no way perverse, as they are in the impugned order, no interference is called for in the present appeal. No substantial question of law arises for consideration.

Summary

Issues:
1. Whether the gift received by the appellant is an unexplained cash credit under section 68 of the Income Tax Act.
2. Whether the appellant has discharged the burden of proving the gift.
3. Whether the Tribunal's order was perverse and lacked proper appreciation of evidence.
4. Whether the Tribunal was right in concluding without discussing findings of other authorities.

Analysis:

Issue 1: Unexplained Cash Credit
The assessing officer treated the gift of Rs. 9,51,257 as an unexplained cash credit under section 68 of the Income Tax Act due to the lack of proof provided by the assessee. The Tribunal upheld this decision, stating that the assessee failed to establish a close relation with the donor or the donor's creditworthiness, as required by law. Merely showing the gift was made through a banking channel was deemed insufficient to prove its genuineness. The Tribunal cited legal precedents emphasizing the need to judge evidence based on human probabilities. The Tribunal's decision was based on the lack of sufficient evidence to prove the genuineness of the gift.

Issue 2: Burden of Proof
The appellant submitted documents such as a gift deed, bank certificate, passport copy, and the donor's income tax return to establish the identity and creditworthiness of the donor. However, the assessing officer disregarded these documents. The Commissioner of Income Tax (Appeals) accepted the documents as genuine, but the Tribunal overturned this decision, emphasizing the failure to prove the creditworthiness of the donor. The Tribunal's decision highlighted the importance of establishing the genuineness of gifts through credible evidence.

Issue 3: Perverse Order and Evidence Appreciation
The appellant argued that the Tribunal's order was perverse as it allegedly did not properly appreciate the evidence on record, breached principles of natural justice, and failed to provide reasons for reversing the CIT(A)'s findings. However, the Court found that the Tribunal's findings were based on facts and material relevant to the issue, and when findings are factual and properly arrived at, interference is not warranted unless they are perverse, which was not the case here.

Issue 4: Conclusion Without Discussion of Other Authorities
The Tribunal concluded without discussing the findings of other authorities, leading the appellant to question the legality of this approach. The Court held that the Tribunal's confirming findings were based on relevant facts and material, and as long as these findings are not perverse, there is no need for interference. Consequently, the Court dismissed the appeal, finding no substantial question of law requiring consideration.