Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2010 (12) TMI AT This

  • Login
  • Cases Cited
  • Referred In
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2010 (12) TMI 1202 - AT - Income Tax

Issues Involved:
1. Deletion of addition of Rs. 9,51,257/- as unexplained cash credit u/s 68 of the IT Act.
2. Satisfaction of the explanation offered by the assessee regarding the creditworthiness of the donor.
3. Consideration of the judgment of the Hon'ble Supreme Court in the case of CIT Vs. P. Mohankala & Others.
4. Whether the CIT(A) was justified in deleting the addition made by the AO.

Summary:

Issue 1: Deletion of addition of Rs. 9,51,257/- as unexplained cash credit u/s 68 of the IT Act
The AO added Rs. 9,51,257/- to the assessee's income as unexplained cash credit u/s 68, questioning the creditworthiness of the donor, Smt. Bhanumati J. Doshi, and the genuineness of the gift. The CIT(A) deleted the addition, accepting the assessee's submission that the gift was received through International Banking Channel and that the primary onus to prove the creditworthiness was discharged by providing necessary documents.

Issue 2: Satisfaction of the explanation offered by the assessee regarding the creditworthiness of the donor
The AO contended that the assessee failed to produce sufficient evidence to prove the donor's creditworthiness, such as the bank pass book, salary certificate, and balance sheet. The CIT(A) accepted the documents provided by the assessee, including the gift deed, bank certificate, passport copy, and the donor's income tax return, as sufficient to prove the genuineness and creditworthiness of the donor. However, the Tribunal found that these documents did not conclusively prove the donor's financial capacity or the genuineness of the gift.

Issue 3: Consideration of the judgment of the Hon'ble Supreme Court in the case of CIT Vs. P. Mohankala & Others
The Tribunal referred to the Supreme Court's judgment in CIT Vs. P. Mohankala & Others, which emphasized that mere identification of the donor and movement of the gift amount through banking channels are not sufficient to prove the genuineness of the gift. The Tribunal noted that the CIT(A) failed to consider this judgment while deleting the addition.

Issue 4: Whether the CIT(A) was justified in deleting the addition made by the AO
The Tribunal concluded that the CIT(A) was not justified in deleting the addition, as the assessee failed to prove the donor's creditworthiness and the genuineness of the gift. The Tribunal restored the AO's order, emphasizing that the assessee did not provide sufficient evidence to satisfy the conditions of section 68 of the IT Act.

Conclusion:
The Tribunal allowed the revenue's appeal, setting aside the CIT(A)'s order and restoring the AO's addition of Rs. 9,51,257/- as unexplained cash credit u/s 68 of the IT Act. The Tribunal emphasized the need for concrete evidence to prove the creditworthiness of the donor and the genuineness of the gift, in line with the Supreme Court's judgment in CIT Vs. P. Mohankala & Others.

 

 

 

 

Quick Updates:Latest Updates