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TMI Blog2014 (8) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... - PUNJAB AND HARYANA HIGH COURT] - a gift cannot be accepted as such to be genuine, merely because the amount has come by cheque or draft through banking channels, unless the identity of the donor, his creditworthiness, relationship with the donee and the occasion are proved - Unless the recipient has proved the genuineness thereof, the gift can very well be treated to be an accommodation entry of the assessee's own money, which is not disclosed for the purpose of taxation - The Tribunal has fallen into an error while setting aside the order of the CIT asking for fresh assessment - However, there is no dispute of the fact that the donor, Smt. Kamlesh Ahuja, was the real aunt of the assessee and the amount of ₹ 1 lakh, as gifted by her can only be excluded from the purview of fresh assessment proceedings – Decided in favour of Revenue. - I.T.A. No. 250 of 2008 - - - Dated:- 4-3-2014 - MR. AJAY KUMAR MITTAL AND MRS. ANITA CHAUDHRY, JJ. Mr. Yogesh Putney, Advocate for the appellant Mr. S.K. Mukhi, Advocate for the respondent JUDGEMENT ANITA CHAUDHRY, J. 1. The Revenue is in appeal against the order dated July 13, 2007, passed by the Income-tax Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorities, who, after a thorough examination, had exempted the amount from the income of the assessee being gifts. He took the stand that issuance of notice on mere suspicion or change of opinion was not valid. The assessee also took the stand that the persons from whom he received the gifts were income-tax assessees. With regard to donors, V. K. Sharma and Vikram Awasthy, it was submitted that they were family friends of the assessee and affluent businessmen. With respect of Smt. Kamlesh Ahuja, it was averred that she was the real aunt ( Tai ) of the assessee. It was also pleaded that all the donors had confirmed giving gifts. It was urged that the notice be withdrawn. 5. The Commissioner of Income-tax, on receipt of the reply furnished by the assessee, called him to furnish the following details : (i) copy of the Commissioner (Appeals)'s order of the assessment year 2000-01 ; (ii) copy of bank accounts of the assessee for the relevant period ; (iii) sources of gifts made by the alleged donors were to be explained along with their bank accounts, permanent account number, capital accounts, proof of filing income-tax returns, mode of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al was of the view that once the assessee had discharged the primary onus of proving the genuineness of the gifts and the Assessing Officer had completed the assessment without doubting the veracity of the transaction, it was beyond the scope of revisional proceedings. It was finally concluded that the original assessment proceedings were not erroneous, leaving any scope for the Commissioner of Income-tax to invoke the provisions under section 263 of the Act. 10. Supporting the findings of the Tribunal, learned counsel for the respondent-assessee has relied upon CIT v. Unique Autofelts (P.) Ltd. [2009] 30 DTR 231 (P H), CIT v. Honda Siel Power Products Ltd. [2010] 41 DTR 353 ; [2011] 333 ITR 547 (Delhi) and CIT v. Leisure Wear Exports Ltd. [2010] 46 DTR 97 ; [2012] 341 ITR 166 (Delhi). 11. To appreciate the controversy involved in the present case, in the right perspective, we would like to first refer to the provisions contained in section 263 of the Act, which read as under : 263. Revision of orders prejudicial to revenue.-The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. 8. xxxxxxxxxx 9. The phrase 'prejudicial to the interests of the Revenue' is not an expression of art and is not defined in the Act. Understood in its ordinary meaning, it is of wide import and is not confined to loss of tax. The High Court of Calcutta in Dawjee Dadabhoy and Co. v. S. P. Jain [1957] 31 ITR 872 (Cal), the High Court of Karnataka in CIT v. T. Narayana Pai [1975] 98 ITR 422 (Karn), the High Court of Bombay in CIT v. Gabriel India Ltd. [1993] 203 ITR 108 (Bom) and the High Court of Gujarat in CIT v. Smt. Minalben S. Parikh [1995] 215 ITR 81 (Guj) treated loss of tax as prejudicial to the interests of the Revenue . The phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income-tax Officer ado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examining the records of any proceedings under the Act and passing orders thereon. . . xxxxxxxxxx 15. The aforesaid judicial pronouncements have recently been followed by this court in CIT v. Rakesh Jain (I. T. A. No. 285 of 2009, decided on July 31, 2013) [2014] 2 ITR-OL 587 (P H). 16. We proceed to examine the orders passed by the authorities below, in the light of law enunciated above. 17. The Commissioner of Income-tax prima facie found the assessment order to be erroneous and prejudicial to the interests of the Revenue and intended to examine the genuineness of the gifts amounting to ₹ 21 lakhs received by the assessee from different donors. Mere identification of the donor and showing the movement of the gift amount through banking channels is not enough to prove the genuineness of the gift. Since the claim of gift is made by the assessee, the onus lies on him not only to establish the identity of the person making the gift but also his capacity to make a gift and that it has actually been received as a gift. In the case of Tirath Ram Gupta v. CIT [2008] 304 ITR 145 (P H), it was held that a gift cannot be accepted as such to be genuine, merely because the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, thus, perverse. In identical situation, this court held that non-resident Indian gift could not be accepted as genuine unless the assessee was able to prove natural love and affection and financial capacity of the donor. The observations of this court in Jaspal Singh are (309 of 290 ITR) : It is well-settled that mere identification of donor and showing the movement of gift amount through banking channel is not enough to prove genuineness of the gift. The assessee was required to establish that the donor had the means and the gift was genuine, for natural love and affection. Reference in this regard may be made to the judgment of this court in Lall Chand Kalra v. CIT [1981] 22 CTR 135 (P H), the judgment of the Delhi High Court in Sajan Dass and Sons v. CIT [2003] 264 ITR 435 (Delhi), CIT v. Durga Prasad More [1971] 82 ITR 540 and Sumati Dayal v. CIT [1995] 214 ITR 801. ' 10. Even this Bench in I. T. A. No. 72 of 1999 titled Hanuman Dass v. CIT decided on November 22, 2013 [2014] 365 ITR 131 (P H), held as under : Taking up the case in hand, even when the donor had the means to make the gifts, there being neither any relationship nor there b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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