2024 (5) TMI 353 - HC - Income Tax

Addition u/s 68 - Tribunal had disbelieved the explanation furnished by the assessee as to genuineness of the gifts received by him from six individuals - HELD THAT - Tribunal had delved deep into the matter and discovered that there was no pre-existing relationship or circumstances disclosed as may have given rise to any gift to the assessee. Appellant is a well to do person whereas the donors were persons of modest means. In absence of any relationship shown or basis disclosed for generation of the gift, the Tribunal has disbelieved the explanation furnished by the assessee on the preponderance of probability emerging from evidence led by the parties. Insofar as assessment of the income tax is purely a civil proceeding, the test of preponderance of probability applied by the Tribunal cannot be faulted. In the context of gift set up by the assessee, merely because the assessee may have been able to establish such gift was received through bank channel and merely because the donors may not have disputed the gift made may never have been enough to establish genuineness of the transaction. Slight difference of test may continue to exist in cases involving gift, and deposits that are to be repaid by the recipient. Insofar as gift claimed by the petitioner amounted to change of title in the money, we do not find any defect in the course adopted by the Tribunal in disbelieving the claim on the basis of holistic consideration of the material before the Tribunal. Its findings are pure findings of fact. They do not give rise to any substantial question of law.

Summary

Issues involved: Appeal u/s 260A of the Income-Tax Act, 1961 challenging addition made u/s 68 of the Act regarding genuineness of gifts received.

Summary:
The High Court heard the appeal filed by the assessee challenging the addition made under Section 68 of the Income-Tax Act, 1961. The Tribunal had dismissed the appeal and confirmed the addition, disbelieving the explanation provided by the assessee regarding the genuineness of gifts totaling Rs. 14,50,000 received from six individuals. The Tribunal found no pre-existing relationship or circumstances supporting the gifts to the assessee, who was well-off compared to the modest means of the donors. The Tribunal's decision was based on the preponderance of probability emerging from the evidence presented. The Court noted that in civil proceedings like income tax assessment, the test of preponderance of probability applied by the Tribunal was appropriate. Merely establishing the receipt of gifts through bank channels and lack of dispute from donors were not sufficient to prove the genuineness of the transactions. The Court upheld the Tribunal's decision, stating that the findings were factual and did not raise any substantial question of law. Consequently, the appeal was deemed meritless and dismissed without costs.