2012 (9) TMI 959 - HC - Income Tax

Unexplained gifts - Held that - We are of the view that genuineness of the gifts has been accepted by the Commissioner of Income Tax (Appeals) as well as Appellate Tribunal. The identity and creditworthiness of the donors have also been accepted by both the authorities. These are questions of facts and there is a concurrent finding of fact by both the authorities below and no illegality or perversity in the finding recorded by both the authorities below has been pointed out by the learned counsel for the Revenue. The said finding of fact of both the authorities below cannot be interferred with by this Court.

Summary

Issues:
Challenge to deletion of addition of unexplained gifts by Assessing Officer.

Analysis:
The Revenue filed an Income Tax Appeal challenging the order of the Income Tax Appellate Tribunal, which affirmed the deletion of an addition of Rs. 30 Lacs made by the Assessing Officer on account of unexplained gifts. The Assessing Officer disallowed three gifts received by the Assessee from his brothers, alleging lack of proof of creditworthiness and stating the gifts were given without occasion. The Commissioner of Income Tax (Appeals) deleted the addition, finding the gifts genuine. The Revenue contended that the gifts were rightly disallowed, but the Tribunal and Commissioner found in favor of the Assessee. The Commissioner accepted evidence of creditworthiness provided by the Assessee, including bank accounts, gift deeds, and passports of the donors, who were NRI brothers of the Assessee. The Tribunal concurred with the Commissioner's decision, citing legal precedents and emphasizing that gifts need not be based on blood or close relationships. The Tribunal upheld the deletion of the addition based on the genuineness of the gifts and the relationship between the donors and the Assessee.

The Court examined the reasons given by the Commissioner and Tribunal for deleting the addition and found them legally justified. The Court emphasized that the genuineness of the gifts, the identity, and creditworthiness of the donors were established facts, supported by documentary evidence. The Court cited previous judgments to support the findings of the lower authorities. It was noted that the issue of the genuineness of gifts is a question of fact, and the findings of fact by the lower authorities were deemed conclusive. As no substantial question of law was identified in the appeal, the Court dismissed the appeal, stating that interference with the findings of the lower authorities was unwarranted. The Court reiterated that the acceptance of gifts without occasion based on love and affection is a valid practice, especially when supported by documentary evidence of genuineness and creditworthiness.

In conclusion, the Court upheld the decisions of the lower authorities to delete the addition of unexplained gifts made by the Assessing Officer. The Court emphasized the importance of documentary evidence establishing the genuineness of gifts and the creditworthiness of the donors. The Court dismissed the appeal as no substantial question of law was found, and the findings of fact by the lower authorities were deemed conclusive and legally justified.