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TMI Blog2013 (2) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... int income. Further the details of their income tax return reveals that they have stated to have given aggregate gift of USD 251 in the year. Thus their total gifts as reported in their Income tax return is of USD 251. In the present case Shri Dilip Patel has stated to have given gift of over USD 10,000 to assessee which therefore leads to the conclusion that the gift to assessee has not been disclosed by them in the return of Income.In the case of Shri Vipul Patel his joint total income along with his wife after payment of taxes for calendar year 2004 is USD 34764. The gift of USD 10023 to assessee thus amounts to around 29% of their joint income after payment of tax. Thus nothing has been brought on record to prove the relationship between the donor and donee that necessitated the love and affection which could result into giving of gift. The part relief granted by the CIT (A) was in cryptic manner stating that since the A.O. has not given any finding, the general observation of the A.O. that the credits were not genuine has to be rejected in respect of these two donors, as the initial onus of the appellant stands discharged as the reason given for granting relief in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round of appeal raised by the assessee reads as under:- The Ld. CIT (A) erred in confirming the addition of Rs.8,76,000/- u/s. 68 of the Act. 6. During the course of assessment proceedings, on perusing the bank account of the assessee, A.O. observed that assessee had received gifts in the form of Demand drafts aggregating to Rs.21,87,500. Assessee was asked to furnish details of the receipts. Since no reply was received, A.O. considered the amount as cash credit u/s. 68 and added it to the income. Being aggrieved by the decision of A.O., assessee carried the matter before CIT (A). 7. Before CIT (A), assessee submitted that the amount of Rs.21,87,500/- represented gift received from 4 NRI s. The assessee furnished documents before CIT (A) on which he called for remand report from A.O. CIT (A) after considering the submissions of assessee, remand report and rejoinder to remand report from A.O. gave partial relief to the assessee by holding as under:- 4. I have considered the submissions of the Ld. A.R. and facts of the case. I have also gone through the details filed by the appellant, the assessment order, the remand report and rejoinder of the appellant on the rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quirement of Sec. 68 by proving the identity, address and capacity of the donors and genuineness of the transaction and therefore the gifts cannot be considered to be unexplained or bogus and therefore cannot be added to the income. Ld. A.R. further submitted that the signatures of the donors made in the declaration are genuine as the same signature also appears in the bank account of the donors who made gifts to the assessee. She further relied on the decision of Mumbai Tribunal in the case of ITO vs. Prakash Rajani (ITA No.4870/Mum/2009 dated 30-12-2011) and in the case of ACIT vs. Shri Ravi Patel (ITA No.1906/Ahd./2007) dated 25-1-2012. She thus submitted that the addition made by the A.O. be deleted. 10. On the other hand the Ld. D.R. pointed out to the fact that declarations of the donors and confirmations of the assessee were made in June 2004 whereas the return of income was filed on 30-8-2005 and the hearing during the course of assessment took place in December, 2007. He therefore submitted that the assessee did not furnish the required details called for by the A.O. though the same were available with the assessee which according to him clearly leads to the conclusion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2004 it is seen that the donors have filed their income tax returns jointly with their spouse which appears to be as per the prevailing tax laws in USA. The details and other facts with respect to the donors that emerge from the returns of Income filed by them are as under:- Sl. Name of the donor Occupation (as per Return of income) Taxable Income (USD) Total taxes payable (USD) Income after payment of Tax (USD) Gift given (USD) to assessee [considering 1 USD = Rs.43] Gift given to assessee (Rs.) 1. Ramanbhai Patel. Not available Copy of Return of income not on record. Not available Not available 20233 870000 2. Shri Suresh Patel. Unemployed 2000 (approx. as the amount is not clear from the copy) 259 1741 10349 445000 3. Dilip Patel. Not available 46806 4283 42523 10267 441500 4. Shri Vipul Patel. Storeowner 40441 5677 34764 10023 431000 15. Perusal of the details the above chart reveals as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndings of facts; hence the Remand Report ought to have been considered along with the assessment order. 18. In the case of Rajeev Tandon (supra) the Hon ble High Court had upheld the decision of Delhi Tribunal which has been reported in 109 TTJ Delhi 261. In that case, after relying on the various decisions of High Courts and Tribunals, the Tribunal has held as under:- 15. Thus, from the above decisions (supra) for accepting the gift amounts received by the assessee to be genuine the ingredients required to be taken into consideration by us are that the assessee must establish the identity of the donor, his financial capacity to make such gift, as well as, the genuineness of the gift transaction. The genuineness of the gift transaction cannot be determined without looking into the aspect of human probabilities, relationship of donor and donee, occasion for making the gift and existence of abovementioned aspects are of no less significance. Further, in case the assessee fails to establish any one of these ingredients the gift amounts received by the assessee can be treated as assessee s income from undisclosed income representing assessee s own money, which was introduced i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donor has no occasion (sic) giving the amount in gift. If we put this question to any human being having a normal human behaviour the obvious answer would be no . Therefore, applying the test of human probabilities, as laid down by the Apex Court in the cases (supra), the A.O. was fully justified incoming to a conclusion that these were bogus gifts made by the donors to the assessee, which was assessee s own unexplained money routed through the donors simply to increase the capital of the assessee to enable the assessee to purchase the house for a sum of Rs.47.5 lakhs. The A.O. was further justified in treating the gifts as not genuine and adding the same to the income of the assessee under section 68 of Income Tax Act, 1961 as income from other sources. Consequently, the order of CIT (A) in this regard in this regard is set aside and the order of the A.O. is restored. The ground of appeal taken by the revenue is allowed. 19. In the case of Thirath Ram Gupta vs. CIT (2008) 304 ITR 145 (P H) the Hon ble High Court has held that a gift cannot be accepted as such to be genuine, merely because the amount has come by way of a cheque or draft through banking channel, unless the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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