2010 (4) TMI 97 - HC - Income Tax

Issuance of notice u/s 147 - gifts were made by the mother to the son reason to believe - held that - discharge the onus cast upon him by furnishing the bank statement of his mother (donor) as also the confirmation certificate from the mother confirming the said gifts. Once the assessee has discharged the primary onus, which was cast upon the assessee, it was incumbent upon the Assessing Officer to prove on the basis of a cogent evidence that the transaction was not genuine. There is no such evidence forthcoming. We find that the conclusions of the Assessing Officer and the Commissioner of Income-tax (Appeals) with regard to the genuineness of the transactions are merely conjectural and are based on surmises and assumptions. Such conjectures and assumptions cannot take the place of proof, once the assessee has discharged the primary burden which had been cast upon him. - The Tribunal has correctly concluded that the authorities below had ignored the fact that there was a blood relationship (mother-son) between the donor and the donee; that the gifts are normally made by parents to children through love and affection and do not necessarily require any particular occasion; that the gifts in the present case were all made by cheques and through banking channels.

Summary

Issues:
1. Validity of proceedings under Section 147 of the Income-tax Act, 1961
2. Merits of the addition of Rs 24,77,000 under Section 68 of the Income-tax Act

Validity of Proceedings under Section 147:
The High Court did not delve into the validity of the proceedings under Section 147 of the Income-tax Act, as it found the Tribunal's conclusion on the merits to be correct. The focus shifted to the second issue regarding the addition of Rs 24,77,000 under Section 68 of the Act.

Merits of the Addition under Section 68:
The case revolved around gifts amounting to Rs 24.77 lakhs given by the mother to the assessee during the financial year 1999-2000. The Assessing Officer treated these gifts as unaccounted income and made the addition under Section 68. The Commissioner of Income-tax (Appeals) upheld this decision, citing the lack of a specific occasion for the gifts as a reason for doubt, a logic the High Court found flawed. The Court emphasized that gifts between a mother and son do not necessitate a special occasion.

Regarding identity, it was established that the gifts were indeed from the mother to the son. The assessee successfully discharged the burden of proof by providing the mother's bank statement and a confirmation certificate of the gifts. The Court noted that once the primary burden is met, it falls on the Assessing Officer to provide concrete evidence to refute the genuineness of the transaction, which was lacking in this case.

The Tribunal correctly highlighted the blood relationship between the donor and donee, emphasizing that gifts within a family are often driven by love and do not require a specific occasion. Additionally, the gifts were made through legitimate banking channels, further supporting their authenticity. Consequently, the Tribunal ruled that since the identity and source of the gifts were established beyond doubt, there was no basis for the addition under Section 68 of the Income-tax Act.

In conclusion, the High Court found no perversity in the Tribunal's findings, stating that no substantial question of law arose for consideration. As a result, the appeal was dismissed, affirming the Tribunal's decision on the matter.