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TMI Blog2010 (9) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed gifts. He also remained of the view that the AO was not justified in estimating the household expenses at an amount which was on lower side. The learned CIT issued show-cause notice under section 263 of the Act to the assessee. Regarding estimation of household expenses at lower side, the learned CIT was satisfied with the cause shown by the assessee. He was, however, not satisfied with the cause shown by the assessee about the genuineness of the claimed gifts and its acceptance as such by the AO. The learned CIT accordingly held the action of the AO erroneous as well as prejudicial to the interests of Revenue under section 263 of the Act in accepting the claimed gifts without proper enquiry. She has thus set aside the assessment order with direction to the AO to complete the assessment de novo on the issue of alleged gifts after giving an opportunity of being heard to the assessee and after making proper enquiry and applying the correct provisions of law as discussed by her in the order impugned. 4. Before us, the learned Authorised Representative submitted that the assessee trading in foodgrains in the name and style of M/s Gyan Chand Sanjay Kumar (a proprietary concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmons under section 131 to him and recorded his statements. In his statement Shri Madan Lal Gupta has accepted the claimed gift and he had also given donation of Rs. 21,000 to Shri Agrasen Mahila Mahavidhylaya. The relevant documents have been made available at pp. 10 to 15 of the paper book. The learned Authorised Representative submitted further that copy of capital account of assessee reflecting the gift received was also furnished before the AO which has been made available at p. 16 of the paper book. The learned Authorised Representative submitted further that in the asst. yr. 2003-04 a gift of Rs. 1 lac was received from Shri Om Prakash Garg, cousin brother of assessee. Copy of gift deed executed by him, his affidavit confirming the gift, his pension papers showing source of gift were furnished before the AO and have been made available at pp. 1 to 6 of the paper book. He submitted that in this case also summons under section 131 was issued and in response the donor appeared before the AO and his statements were recorded confirming the claimed gift. Copies of summons and his statements have been made available at pp. 7 to 14 of the paper book. The learned Authorised Represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablished. There is no evidence that donee's money was being deposited in the donors' bank accounts. He placed reliance on the following decisions : (i) Kanhaialal Jangid v. Asstt. CIT [2008] 217 CTR (Raj.) 354 [2008] 8 DTR (Raj.) 38; (ii) Aravali Trading Co. v. ITO [2008] (Raj.) (iii) Labh Chand Bohra v. ITO (Raj.); (iv) Asstt. CIT v. Rajasthan Asbestos Cement Co. [IT Appeal No. 940 (Jp) of 2008] [reported at (2009) 23 DTR (Jp)(Trib.) 430-Ed.]; (v) CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349 (SC); (vi) Manju Devi Nawal v. Asstt. CIT 34 Tax World 253 (JP); (vii) ITO v. Komal Kumar Bader 42 Tax World 207 (JP); (viii) CIT v. Max India Ltd.[2007] 295 ITR 282 (SC); (ix) Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC); (x) CIT v. Deepak Mittal [2010] 324 ITR 411 (P&H); (xi) B & A Plantation & Industries Ltd. v. CIT [2007] 290 ITR 395 (Gau.); (xii) Om Metals Infra Projects Ltd. v. CIT 42 Tax World 23 (JP). 5. The learned Authorised Representative submitted further that there is no yardstick to measure depth of love and affection and placed reliance on the following decisions : (i) Asstt. CIT v. Radhey Shyam Agarwal 41 Tax World 82 (JP); (ii) Nek Kumar v. Asstt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not considered any material or has not done proper examination or enquiry, verification or if the AO has completely omitted the issue in question from consideration and made the assessment in an arbitrary manner. An incorrect assumption of fact or incorrect application of law or non-application of mind will satisfy the requirement of the order being erroneous. The phrase "prejudicial to the interests of Revenue" has to be read in conjunction with an erroneous order passed by the AO. Every loss of revenue as a consequence of an order of AO cannot be termed as prejudicial to the interests of Revenue. For example, when an AO adopts one of the courses permissible in law and it results in loss of revenue, or where two views are possible and, the AO takes one view with which the CIT does not agree, it cannot be treated as a erroneous order prejudicial to the interests of Revenue unless the view taken by the AO is unsustainable in law. In the present case as discussed above it is not the grievance of the learned CIT that enquiry to examine the correctness of claimed gifts have not been conducted by the AO but her sole grievance for invoking the provisions of section 263 of the Act is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to the assessee. To make addition in such case, the Department has to prove that the source of money comes from the assessee himself. In the case of Aravali Trading Co. (supra), the Hon'ble Rajasthan High Court has been pleased to hold that once the existence of the creditor is proved and such persons own the credits which are found in the books of the assessee, the assessee's onus stands discharged and the latter is not further required to prove the source from which the creditor could have acquired the money deposited with him. Likewise, in the case of Labh Chand Bohra (supra) the Hon'ble Rajasthan High Court has been pleased to hold that there is no need to prove the capacity of cash creditor or source of source is not to be enquired where identity and genuineness of cash credit is proved. Under the facts and circumstances of the present case the decisions relied upon by the learned CIT and the learned Departmental Representative are of no assistance to the Revenue as they are having distinguishable facts and circumstances. Those decisions are not applicable in the present case as it is not a case before us as discussed above that the AO while deciding the issue did not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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