2010 (10) TMI 530 - HC - Income Tax

Bogus gift - It is also true that the onus was on the assessee to establish the identity of the person making gift and also his capacity to make the gift - In the absence of necessary evidences, it cannot be considered that the alleged donor was a man of means - strenuous efforts were made by the learned counsel to persuade this court to record that the gift received from Shri Harcharan Singh, non-resident Indian was genuine by reappreciating the evidence which is not permissible under section 260A of the Act - Decided against the assessee

Summary

Issues:
Validity of the gift received by the appellant from a non-resident Indian.

Analysis:
1. The appellant, engaged in the sale and purchase of jewellery items, received a gift of Rs. 1 lakh from a non-resident Indian, Harcharan Singh, during the relevant assessment year. The Assessing Officer treated the gift as compensatory income, citing a previous court judgment. The Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal upheld this view.

2. The Tribunal found the gift not genuine, stating that there was no occasion for the donor to give the gift, and highlighted discrepancies in the affidavit provided by the donor. The affidavit lacked a date, mentioned contradictory information about the gift, and failed to establish the donor's non-resident status or relationship with the appellant.

3. The Tribunal also noted that the bank account of the donor showed suspicious transactions around the time of the alleged gift, indicating an attempt to create a false record of the transaction. Additionally, the appellant failed to produce the donor before the Assessing Officer or disclose the donor's address in Dubai, further casting doubt on the relationship and authenticity of the gift.

4. The Tribunal's decision was based on a lack of concrete evidence supporting the genuineness of the gift. The appellant's attempt to challenge the findings was deemed impermissible under the law. The court concluded that the authorities had arrived at a plausible view based on the evidence, and the decision could not be considered perverse.

5. Ultimately, the court ruled in favor of the Revenue, dismissing the appeal and upholding the decision that the gift received by the appellant was not genuine. The appellant failed to provide sufficient evidence to establish the authenticity of the gift, leading to the adverse judgment.