2019 (9) TMI 630 - AT - Income Tax

Addition on account of cash gift - sufficient evidence or material on record to prove creditworthiness of the donor and genuineness of the gift in the matter - HELD THAT - D.R. rightly objected to the admission of the same at this stage. Exclude the confirmation-cum-Gift Deed from consideration of the issue. It, therefore, stand proved on record that assessee has failed to explain the nature and purpose of the gift. No confirmation and Gift Deed was filed from the donor. In the absence of any evidence or material on record, the A.O. has correctly treated the Gift to be non-genuine. The assessee failed to prove the creditworthiness of the donor and genuineness of the transaction in the matter. No reasons or occasion of Gift have been filed on record. Gifts have been made on seven different dates in cash, for which, no explanation have been given, despite donor was maintaining her Bank A/c. Since no sufficient evidence have been filed before the authorities below to prove genuineness of the gift in the matter, therefore, it is clear that gifts are not genuine gifts and are arranged affairs of the assessee. Assessee failed to prove ingredients of genuine gift in the matter. As rely upon case of CIT vs. Anil Kumar 2007 (3) TMI 223 - DELHI HIGH COURT , CIT vs. P. Mohankala 2007 (5) TMI 192 - SUPREME COURT and in the case of Yashpal Goyal vs. CIT 2009 (1) TMI 58 - PUNJAB AND HARYANA HIGH COURT . Assessee failed to produce sufficient evidence or material on record to prove creditworthiness of the donor and genuineness of the gift in the matter. Durga Prasad More 1971 (8) TMI 17 - SUPREME COURT and Smt. Sumati Dayal 1995 (3) TMI 3 - SUPREME COURT have held that the Courts and Tribunals have to Judge the evidence before them by applying the test of human probabilities . If the said test is applied in the matter, it is clearly established that assessee has failed to prove the genuineness of the gift in the matter. - Decided against assessee.

Summary

Issues:
Challenge against addition of cash gift in the assessment year 2015-2016.

Analysis:
The case involved an appeal by the Assessee against the addition of ?2,30,000 on account of a cash gift. The Assessing Officer (A.O.) found that the Assessee had deposited this amount without providing sufficient evidence of its source. The Assessee claimed it was a gift from his mother but failed to produce a Gift Deed, leading the A.O. to treat it as undisclosed income. The Assessee then challenged this before the Ld. CIT(A), providing details of property sales to justify the cash deposit. The Ld. CIT(A) dismissed the appeal citing lack of evidence and the rule of human probabilities.

During the appeal, the Assessee's counsel presented the Sale Deed and bank statements to support the gift claim. However, the Revenue argued that the additional evidence submitted by the Assessee should not be considered. The A.O. noted the property transactions but found the Assessee's explanation for the cash deposit lacking. The Ld. CIT(A) concurred, emphasizing the lack of nexus between the cash deposit and the donor's withdrawals.

The Tribunal analyzed the case, observing that the Assessee failed to substantiate the gift's genuineness. The Tribunal excluded the late-filed confirmation-cum-Gift Deed and emphasized the absence of a proper explanation for the cash gifts. Referring to relevant case law, the Tribunal held that the Assessee did not meet the burden of proving the gift's authenticity. The Tribunal applied the test of human probabilities and concluded that the Assessee's failure to provide adequate evidence rendered the gifts non-genuine.

Ultimately, the Tribunal dismissed the Assessee's appeal, highlighting the lack of proof regarding the creditworthiness of the donor and the authenticity of the gifts. The Tribunal relied on legal precedents to support its decision, emphasizing the importance of substantiating claims in tax matters. The appeal was thus rejected, affirming the addition of the cash gift as undisclosed income.

In conclusion, the Tribunal upheld the addition of the cash gift, emphasizing the Assessee's failure to provide convincing evidence of the gift's legitimacy. The decision underscored the significance of substantiating claims with proper documentation and adhering to the principles of tax law.