9911796707
TMI Blog2006 (9) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... s/o late Shri Hamid Ulla Khan of Riyadh. In the first round of appeal, the matter was restored back . to the file of the AO to verify the actual position from the bank as to whether deposit in the NR(E) account can be out of local clearance or not. The AO was also directed to consider the deposit in the related account only prior to the date of gift i.e., 26th Sept., 1994. A notice under s. 131 to Smt. Mohd. Shamim Khan was to be issued, to give a right of cross-examination to the assessee. However, while refraining the order, the AO did not strictly follow the direction of the CIT(A) and has passed his order mainly on the statement of the donor. 3. By the impugned order, CIT(A) confirmed the action of the AO regarding bogus gift received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donor, whereas in the instant case in spite of giving so many requests to the AO, no opportunity to cross-examine the donor was afforded. He (has) further drawn our attention to the statement of the donor recorded by the AO, wherein gift was stated to have been given out of foreign remittances. The donor in his statement had admitted that he has sent Rs. 1 lakh each on different dates from Riyadh in the NR(E) account No. 14477. It was also stated by the donor that the gift was made on the occasion of the Karta's daughter's birthday. The donor was well known to the assessee which is evident from the statement even though recorded behind back of the assessee. 4. The learned Authorised Representative has also drawn our attention to the irre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h credit and liable to be added in assessee's total income. She further submitted that in case of gift, the assessee is not only required to prove the identity of the donor but. also genuineness of the transaction of gift as well as capacity of the donor to advance a particular amount of gift. As per learned senior Departmental Representative, the assessee has grossly failed to substantiate the genuineness of gift transaction as well as creditworthiness of the donor, insofar as he was earning a meager amount of income. She (has) drawn our attention to the affidavit of Mr. K. Singh according to which cash was given to the donor by Mr. K. Singh for deposit in the bank account, out of which gift was alleged to be given. In view of these facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, copy of statement of Shri Mohd. Shamim Khan was handed over to the assessee for rebuttal. The assessee categorically requested the AO as well as the CIT(A) for cross-examination at his expense, as the statement of donor was not reliable. However, the AO did not accede to the request of the assessee and did not produce Shri Mohd. Shamim Khan for cross-examination. He held that onus to prove the genuineness of the gift was on the assessee and the assessee has grossly failed to discharge the said onus, the amount received by the assessee as gift is required to be added as his income. The AO also observed that there was no occasion for the donor to make the gift as he was not connected with the donee. However, in the first round of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... witness, if his witness is material in exercise of his powers under order 16, r. 10 of CPC and where the officer does not do so, no inference can be drawn against the assessee. Learned Authorised Representative has also drawn our attention to the order of the Tribunal, dt. 3rd July, 2006 wherein under similar facts and circumstances, the assessment was restored to the file of the AO on the plea that opportunity to cross-examine the donor was not afforded by the Department. From the record, we found that the AO himself in his order had observed that Shri Mohd. Shamim Khan had gone to Saudi Arabia and made substantial earning there, part of which was remitted to the NR(E) account No. 14477, Central Bank of India, Saharanpur. The assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the donor by freezing his bank account was not raised before the Tribunal. We found that bank account of the donor was seized and again released after the statement of the donor was recorded by the Department, itself indicates that donor was under pressure and undue influence by the Department. Statement of the donor under these circumstances cannot be said to be voluntary. Even the statement recorded under undue influence, remained untested, in the absence of opportunity of cross-examination being given to the assessee. We are therefore inclined to agree with the submissions of the learned Authorised Representative to the effect that statement recorded behind back of the assessee without being subjected to cross-examination cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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