2013 (10) TMI 197 - HC - Income Tax

Unexplained income u/s 68 - onus of proving transaction - Held that - Commissioner (Appeals) as well as the Tribunal concurrently found that the factum of gift was established. The genuineness of transaction was also proved on record; even creditworthiness of the donor was not possible to doubt. In fact, the gift was received by the assessee from his own son, who was residing in USA. Assessing Officer s stand, that the donor had earned income of only Rs. 40,690/- during the assessment year 1998-99, was rebutted by pointing out that such return was filed for interest income earned in India whereas the assessee is based in USA and is subjected to tax there. The donor, in fact, contended that not only his income tax return, but, all such returns are regularly scrutinized by the authority in USA. The gift was received through bank transaction genuineness thereof was thus suitably established - Decided against Revenue.

Summary

Issues:
1. Whether the Appellate Tribunal erred in not appreciating the lack of documentary evidence to substantiate creditworthiness.
2. Whether the Appellate Tribunal erred in confirming deletion of cash credit without calling for corroborating evidence.

Analysis:
1. The case involved an appeal by the Revenue against the Income Tax Appellate Tribunal's judgment. The Tribunal had framed questions regarding the lack of documentary evidence to prove the creditworthiness of a gift donor. The Assessing Officer disbelieved a gift received by the assessee from his son under Section 68 of the Act, but the CIT(A) deleted the addition. The Tribunal upheld the CIT(A)'s decision, emphasizing the confirmation letter and passport of the donor, along with other evidence. It cited precedents to establish that the onus on the donor to prove genuineness was discharged. The High Court concurred with the lower authorities' findings, dismissing the Revenue's appeal.

2. The second issue revolved around the Tribunal's decision to confirm the deletion of a cash credit without calling for corroborating evidence. The Tribunal considered various factors, including the source of funds and the bank transaction through which the gift was received. It referenced legal precedents to support its conclusion that the genuineness of the transaction was established. The High Court observed that the facts of the case proved the genuineness of the gift received from the son residing in the USA. The donor's explanation regarding his income and tax obligations in the USA further supported the legitimacy of the transaction. Consequently, the High Court upheld the lower authorities' decision, stating that no question of law arose, and dismissed the tax appeals.

This detailed analysis of the judgment addresses the issues raised in the case, highlighting the key legal considerations and findings of the High Court in relation to the disputed matters.