2003 (7) TMI 697 - AT - Income Tax

Bogus gift - Genuineness of the gifts - Relationship and financial capacity of donors - Gifts can be accepted only on any occasion and love affection? - Requirements of valid gift - HELD THAT - Considering the facts and circumstances of this case, the assessee has filed all the evidences of gift, gift-tax challan and income-tax return in which the gifts have been shown by them in their individual cases. The Assessing Officer has not pointed out any defect or infirmity in those evidences. In some of the cases, even the Assessing Officer recorded the statements of all the donors who have proved the gift to the assessee. Therefore, both the authorities with regard to onus of proof are clearly applicable to the case of the assessee. The ld. counsel for the assessee filed copy of the order of the ITAT, Delhi ';E'; Bench of August, 1999 in ITA No. 4398/92 in which with regard to gift it was held by the Appellate Tribunal that there may be relation by behaviour. The grounds of appeal taken in this appeal were with regard to the point that the gifts were accepted suddenly without any occasion and without love affection. These are not the requirements of valid gift. Therefore, the grounds are infructuous. The Assessing Officer has not brought any evidence on record, except merely observing certain facts without any evidence, therefore, the Assessing Officer has not rebutted any evidence of the assessee in this regard. Merely the jurisdictional Assessing Officer has not sent the confirmation report, would not be a ground to reject the explanation of the assessee or to take any adverse presumption. The Assessing Officer did nothing thereafter in obtaining the report from the concerned Assessing Officer of the donors. Therefore, the CIT(A) was justified in allowing the appeal of the assessee. We uphold the finding and dismiss the appeal of the Revenue.

Summary

Issues Involved:
1. Deletion of addition of Rs. 2,10,000 as alleged gifts.
2. Relationship and financial capacity of donors.
3. Genuineness of the gifts and whether they represent concealed income.

Summary:

Issue 1: Deletion of Addition of Rs. 2,10,000 as Alleged Gifts
The revenue appealed against the CIT(A)'s order deleting the addition of Rs. 2,10,000, which the Assessing Officer (AO) had added as bogus gifts from ten parties. The AO issued notices u/s 133(6) to the donors, three of which returned unserved. The assessee produced these three donors, and their statements were recorded. For the remaining seven, the AO did not receive any verification from the concerned ITOs. The AO doubted the genuineness of the gifts due to lack of close relationship and suddenness of the gifts. However, the CIT(A) accepted the gifts based on affidavits, gift-tax returns, and other documents, stating that suspicion cannot replace evidence.

Issue 2: Relationship and Financial Capacity of Donors
The AO argued that the gifts were not genuine due to the lack of close relationship and the sudden nature of the gifts. The CIT(A) noted that although there was no close relationship, the donors confirmed the gifts voluntarily. The CIT(A) held that the assessee satisfactorily explained the receipt of gifts, supported by documentary evidence, and deleted the addition.

Issue 3: Genuineness of the Gifts and Whether They Represent Concealed Income
The AO considered the gifts as the assessee's concealed income, but the CIT(A) found that the assessee had provided sufficient evidence, including affidavits, gift-tax returns, and income-tax returns of the donors. The Tribunal noted that the AO did not produce the assessment records despite multiple adjournments and directions. The Tribunal upheld the CIT(A)'s decision, stating that the assessee had discharged the initial onus of proving the genuineness of the gifts. The Tribunal emphasized that the AO's failure to obtain verification from the concerned ITOs could not be held against the assessee.

Conclusion:
The Tribunal dismissed the revenue's appeal, upholding the CIT(A)'s order that the gifts were genuine and satisfactorily explained by the assessee. The Tribunal found that the AO's reasons for rejecting the gifts were not substantiated by evidence and that the assessee had met the requirements for proving the genuineness of the gifts.