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TMI Blog2007 (1) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... rom persons of no means to the so-called wealthy and influential persons etc., all put together lead to one and only conclusion that gifts are not genuine. A person who is speaking true will not shirk his responsibility as well as liability to say the same before any examining authority. In some cases a person may not be available instantly but why and in what circumstances he will not come forward to tell the truth should be demonstrated. None of the donors has stated any reason as to why they are not available for examination. The assessee has not been able to produce any such reason. Thus all the circumstances put together lead us to hold that the gifts are not genuine. It is seen that the assessee has prepared his statement of affairs. A statement of affairs is nothing but a balance-sheet of a person as on a particular date. Such statement can be prepared only from the books of account. Thus firstly it is incorrect on the part of the assessee to contend that he is not maintaining any books of account. The statement of affairs prepared is testimony of the same. Such statement also includes the receipt of gift. Thus once it is found that the gifts are not genuine and such gifts e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zur Rehman, 3342, Kucha Rehman, Delhi-6 1,00,000 14-12-2000 (ii) Abdul Razak S/o Abdul Gafoor, 3342, Kucha Rehman, Delhi-6 2,00,000 2-12-2006 (iii) Sh. Mohd. Shahrukh S/o Mohd. Yusuf, 5205, Balli Maran, Chandni Chowk, Delhi. 2,00,000 3-3-2001 Total 5,00,000 5. Sh. Shah Nawaz Rana S/o Late Sh Badar Khan, 36, Krishnapuri, MZR (i) Kum Suriya W/o Mohd. Yusuf, 5205, Chandni Chowk, Delhi-6 2,00,000 23-3-2001 (ii) Sh. -Abdul Arshad S/o Abdul Gafoor, 3342, Kucha Rehman, Delhi-6 1,00,000 14-12-2000 (iii) Sh. Iliyas Khan S/o Akram Khan, 4877, Balli Maran, Chandni Chowk, Delhi-6 2,00,000 2-12-2000 Total 5,00,000 6. Smt. Amna Begum W/o Late Sh. Liyakat Ali Khan, 36, Krishnapuri, M. Nagar (i) Shri Liyakat Ali Khan S/o Mohd. Yusuf Ali 5205, Balli Maran, Chandni Chowk, Delhi 2,00,000 26-3-2001 7. Smt. Saida Begum W/o Sh. Quadir Rana, 36, Krishnapuri, M. Nagar (i) Mohd. Ahsaan S/o Mohd. Hazizoor, 3342, Kucha Rehman, Delhi-6 2,00,000 2-12-2000 (ii) Mohd. Hafiz S/o Ilyas Ahmad, 294, Matya Mahal, Delhi-6 2,00,000 26-3-2000 (iii) Shakil Ahmad S/o Mohd. Hafiz, 294, Matya Mahal, Delhi-6 1,00,000 6-12-2000 Total 5,00,000 8. Smt. Sahin Khatoon W/o Zakir Ali Rana, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shakti Ahmad 1. Smt. Naushaba Begurn 16-12-2000 1,00,000 2. Smt. Saida Begum 6-12-2000 1,00,000 3. Noor Saleern Rana 6-12-2000 1,00,000 4. Noor Saleern Rana 30-3-2001 2,00,000 Total 5,00,000 6. Abdul Razak 1. Zakir Ali Rana 242-2000 2,00,000 2. Smt. Sahin Khatoon 16-12-2000 1,00,000 Total 3,00,000 7. Mohd. Yusuf 1. Smt. Naushaba Begum 2-12-2000 1,00,000 2. Intakhab Rana 26-3-2001 2,00,000 3. Smt. Sahin Khatoon 2-12-2000 2,00,000 Total 5,00,000 8. Km. Sariya 1. Shahnawaz Rana 23-3-2001 2,00,000 2. Smt.Saida Begum 26-3-2001 2,00,000 Total 4,00,000 9. Mohd. Hafiz Smt. Naushaba Begum 2-12-2000 1,00,000 10. Smt. Nazama Hafiz Smt. Shatma Zeenut 26-3-2001 2,00,000 11. Mohd. Sahbnaz Smt. Sahin Khatoon 26-3-2001 2,00,000 12. Liyakat Ali Amna Begum 26-3-2001 2,00,000 13. Ilyas Khan Shahnawaz Rana 2-12-2000 2,00,000 14. Mohd. Shahrukh Zakir Ali Rana 23-3-2001 2,00,000 15. Km. Neelofar Abdul Quadir Rana 23-3-2001 2,00,000 16. Abdul Javed Qamruzarna Rana 2-12-2000 2,00,000 Total 15,00,000 Grand Total 52,00,000 The assessing officer wanted to verify the genuineness of the gift. He accordingly, directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed above. (b) The donors namely Shri Rafik Ahmad, Shri Sakil Ahmad, Shri Mohd. Yusuf and Shri Mohd. Hafiz are resident of Delhi and the gift deeds have been attested by the Notary Public of Delhi but no documentary evidence regarding travelling of the donee on respective dates of gift has been filed nor the donee has been produced for cross-examination on this issue. The financial conditions of the donors is not of such state that they can give gifts in lakhs of Rupees as verified in discrete enquiry of the Inspector, copy of report placed on record. (c) No relationship between the donors and the donees has been mentioned in the gift deed so that it may be presumed that there was a natural love and affection between them to give and accept such huge amount of gift. (d) The assessee has not substantiated her claim regarding the genuineness of the gift so far as the reason and occasion of giving and receiving the said gift is concerned. Here it is relevant to mention the case law decided by Hon'ble Punjab & Haryana High Court in the case of Lal Chand Kalra v. CIT reported in 22 CTR 135 (P&H)and also in the case of Shri Chain Sukh Rathi v. CIT reported in 185 CTR 56 (Rajasth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined each and every donors records. He found that all these donors are persons of hardly any means. Their income is meagre and just exceeding few hundred rupees to make them taxable. He noticed that relationship of the donor with the donee and occasion for the gift are some important factors to judge the genuineness of the gift. From all these facts put together, he culled out that number of gifts have been received by all these appellants belonging to Rana Group during a short span between December 2000 and March 2001. Donors are financially very low placed compared to the donees. This shows that the action of donors was stage managed. Merely receipt of sum by demand draft would not be sufficient to absolve the assessee from establishing the capacity of donor and genuineness of gift. Relying on the decision of Hon'ble Punjab & Haryana High Court in the case of CIT v. Ms. Monica Oswal [2004] 267 ITR 308 and that of Hon'ble Supreme Court in the case of CIT v. Durga Prasad More [1971] 82 ITR 540 and in the case of Smt. Sumati Dayal v. CIT [1995] 214 ITR 801, held that if the test of human probability is applied, there is no genuine gift in the circumstances. Considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gift. The case laws or the precedence on the subject are on the facts of each case. in some of the case the gift is not held to be genuine and in many cases it has been held to be genuine. The facts of each case will decide whether the gift is genuine or not. Since the donors are identified by way of their income-tax assessments, their creditworthiness is proved by way of balance-sheet and the genuineness is established by of affidavit/gift deed, the gift should be treated as genuine and addition made under Section 68 needs to be deleted. 5. The learned DR on the other hand, strongly relied upon appellate orders. He submitted that the cases do not involve plain and simple cash credit where the amount is borrowed which are to be returned thereafter. The case involves receipt of gift by the so-called highly resourceful person from the various donors who are comparatively having no means to support themselves. He submitted that the assessee has prepared his statement of affairs which can be prepared only from the books of account. Thus even though it is claimed that books of account are not maintained, the statement of affairs includes receipt of gift to explain various investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Lall Chand Kalra v. CIT (1981) 22 CTR 135/6 Taxman 171. In this case the donor was a stranger to the assessee and the Hon'ble High Court held that there was no reason why he should make a gift of Rs. 10,000 to the assessee. It was further held in that case that gift from a relative who had other more important liability like marrying four sisters of his own would not be a genuine gift and especially when there was no occasion for such a gift." The learned DR further submitted that the assessee merely stated that "the donor if required may be summoned under Section 131 at the cost of the assessee". Thus the assessee never stated that summon should be issued to the donors for verifying the genuineness of the gift. He also submitted that the cases of Hon'ble Allahabad High Court relied upon by the counsel of the assessee are distinguishable on facts. Finally he submitted that whether the gift is genuine or not, is a question of fact but since the amount received is by way of gift from the person of no means, applying the test of human probability as applied by the Hon'ble Supreme Court in the case of Durga Prasad More (supra) and Smt. Sumati Dayal (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e his income as declared for assessment year 1999-2000 is just Rs. 50,750. Out of such income it is question to be considered what he will spent for himself, what he will save for future and how much he can gift away. No transaction can be proved to be genuine only on the basis of certain papers filed. When the assessing officer required the assessee to produce the donors, the appellants declared their inability. This is not only surprising but also astonishing. The finding of ITAT Ahmedabad as extracted hereinabove, squarely applies. It is apt to note that "a man may lies but the circumstances do not". No meters are available for examining the truth and correctness of statement made but the surrounding circumstances and the relevant fact will throw light on the genuineness or otherwise of any transaction. It is true that even stranger can give gifts and it is also held in some cases that there is no need for any occasion to give gifts. However, when all the circumstances like absence of relation, absence of occasion, no counter gifts, gifts from persons of no means to the so-called wealthy and influential persons etc., all put together and lead to one and only conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to issue summons. The assessing officer thereafter drew adverse inference. There is also finding that "the assessee took all the steps that lay in his power to secure the presence of creditor before the I.T.O." However, in the present case the assessee never volunteer himself to produce the donors. When the summons were issued to the donors they did not respond. Enquiry conducted by the assessing officer revealed the so-called gifts are not genuine. This fact was brought to the notice of the assessee. In spite of all these things no reason is adduced as to why the donors are not available for examination nor the assessee took any step seriously for production of donors. Similarly the decision of Allahabad High Court in the case of EM.C (Works) Pvt. Ltd. (supra) is also distinguishable on facts. It was a case of best judgment assessment without issue of necessary notice under Section 22(4) of the Indian Income Tax Act, 1922. The Hon'ble High Court held that in absence of any notice under Section 22(4) best judgment assessment under Section 23(3) of the Indian Income Tax Act, 1922 cannot be framed. However, there is no best judgment assessment in the present case. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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