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TMI Blog2016 (11) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 15 lakhs for the assessment year 2009-10, ₹ 22,90,000 for the assessment year 2010-11 and ₹ 43,00,789 for the assessment year 2011-12. In respect of the remaining amount of ₹ 21,16,611 for the assessment year 2011-12, we deem it appropriate to send the issue to the file of the Assessing Officer and direct the Assessing Officer to verify the claims made by the assessee with regard to sources of ₹ 21,16,611 and take appropriate decision in accordance with law. - I. T. A. Nos. 6, 8, 10 and 39/Vizag/2015 and S. P. Nos. 38, 40 and 42/Vizag/2015 - - - Dated:- 12-8-2016 - V. Durga Rao (Judicial Member) And G. Manjunatha (Accountant Member) For the Assessee : G. V. N. Hari, Authorised Representative For the Department : M. K. Sethi, Departmental Representative ORDER G. Manjunatha (Accountant Member) 1. These cross appeals filed by the assessee, as well as the Revenue are directed against common order passed by the Commissioner of Income-tax (Appeals), Visakhapatnam dated November 13, 2014, for the assessment years 2009-10, 2010-11 and 2011-12. Since the facts are identical and issues are common, they are heard together and disposed of, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transfer of money through banking channels, however, failed to furnish gift deeds as required by the Assessing Officer. The Assessing Officer after considering the details furnished by the assessee held that the assessee has failed to prove the genuineness of alleged gifts stated to be received from his brother and also failed to prove the capacity of the donor to give such huge gifts. The Assessing Officer further held that though the assessee furnished proof of transfer of money through banking channel, failed to prove the sources of alleged gift in the hands of the donor. The Assessing Officer further observed that there is no occasion for the donor to give gift to his brother and also the gifts have been given periodically according to the necessity of the assessee, therefore, opined that the alleged gifts stated to be received from his brother are unexplained credits. With these observations, made additions of ₹ 15 lakhs, for the assessment years 2009-10, ₹ 22,90,000 for the assessment year 2010-11, ₹ 64,17,900 for the assessment year 2011-12. 4. Aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income-tax (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remittance of foreign currency. As regards the assessment year 2011-12, the Commissioner of Income-tax (Appeals) held that on careful consideration of bank statement filed by the assessee, it would show that credits appearing in the bank account of the assessee on November 12, 2010, November 18, 2010, November 22, 2010, February 2, 2011, and February 3, 2011, represents clearing of local cheque deposits and the assessee could not explain these credits with any transfer vouchers to show that money was transferred from abroad to make these deposits. With regard to the credits on November 12, 2010, November 18, 2010, November 22, 2010, aggregating ₹ 18,00,789, it is seen that the assessee is able to link the credits with transfer vouchers, which shows transfer of money by his brother, Shri V. Bala Sudhakar, to the assessee's account. Similarly, the assessee is able to correlate and link for the deposits made on February 2, 2011, and February 3, 2011, aggregating to ₹ 20 lakhs. The Commissioner of Income-tax (Appeals) further observed that though the assessee is able to correlate and link the credits in the assessee's bank account with necessary transfer vouchers fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money from abroad to his brother's bank account. The Assessing Officer, at the time of assessment has considered bank account of the assessee maintained at HDFC Bank, where these credits are found credited, but the fact is that the assessee has received gift from his brother to his bank account maintained at ICICI Bank and from ICICI Bank the same amount has been transferred to HDFC Bank. The assessee has correlated all the entries in the ICICI Bank to HDFC Bank and explained the sources for the credits with necessary bank transfer vouchers from his brother's account in abroad. The Assessing Officer after having verified details and also recorded statement from the donor failed to appreciate the fact that the assessee has sufficient sources to give gift to his brother, simply made additions for the reason that the donor does not have sufficient sources of income to justify the gifts given to his brother. The Assessing Officer also held that there is no occasion for the donor to give gifts to his brother and the gifts are given as per the necessity of the assessee, but the fact is that once the relationship is established between donor and the donee, there is no necessity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corresponding debit entry in his brother's bank account, which was further supported by transfer vouchers issued by Habib Qatar International Exchange Ltd. For having transferred money to Indian bank account maintained at ICICI Bank, the assessee further claims that the Assessing Officer, during the course of assessment proceedings, summoned donor and the donor has personally appeared before the Assessing Officer and admitted that he had given gifts to his brother. The donor furnished proof of transfer of money from his foreign account to Indian Bank and maintained in ICICI Bank along with proof of his sources of income in abroad. We find force in the arguments of the assessee, for the reason that the assessee has furnished details of gifts received from his brother. The assessee right from the beginning claims that the sources for his investments in various firms is out of gifts received from his brother for the past 3 years. The assessee also furnished all proof with regard to gift received from his brother, such as bank statements of donor and donee, sources of income of donor and telegraphic transfer vouchers issued by money exchanger in abroad for having transferred money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oreign exchange dealers. On a perusal of the paper book filed by the assessee, we find that the Assessing Officer has made additions of ₹ 15 lakhs towards alleged gift stated to be received by the assessee from his brother credited in the ICICI Bank account on December 4, 2008, January 28, 2009, and March 17, 2009. On further verification of the details filed by the assessee, we find that the said amount was transferred from the ICICI Bank account of the assessee to HDFC Bank account. This amount, in turn has been transferred to the account of the assessee from his brother Shri V. Bala Sudhakar account with ICICI Bank, vide account No. 000401086050 and donor Shri V. Bala Sudhakar has transferred a sum of ₹ 14 lakhs to his bank account maintained at ICICI Bank on August 25, 2008 and August 26, 2008. From the above stated facts, it is evident that the entire amount of ₹ 15 lakhs deposited in the HDFC Bank account of the assessee is correlated to the bank account of Shri V. Bala Sudhakar, further supported by transfer of money in foreign currency to his bank account at ICICI Bank. 11. Similarly, for the assessment year 2010-11, the assessee has filed paper book. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith necessary entries in bank accounts corresponding with money transfer vouchers. Therefore, we are of the view that once the assessee has proved the gifts with necessary entries in the bank account along with corresponding transfer vouchers from abroad, the lower authorities were not correct in making additions towards the alleged gift by stating that the donor does not have sources of income. The moment the assessee proves the identity and the genuineness of the transactions, he need not to prove the sources for the gifts he had received. 13. Coming to the balance amount of ₹ 21,16,631. The assessee initially claims to have received gifts of ₹ 64,17,400 from his brother but failed to prove the gifts with necessary evidences to the extent of ₹ 21,16,631. The assessee claims that the remaining amount of ₹ 21,16,631 has been received from various persons in the form of loans, but he could not furnish necessary details before the Assessing Officer, on the bona fide belief that his brother has given a positive deposition before the Assessing Officer and also the entire amount received as gift from his brother. However, on analysis of the bank statement, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a deeming provision is sought to be invoked. The relevant portion of the order is extracted below : Suspicion and doubt may be the starting point of an investigation but cannot, at the final stage of assessment, take the place of relevant facts, particularly where a deeming provision is sought to be invoked. The principle that governs a deeming provision is that the initial onus lies upon the Revenue to raise a prima facie doubt on the basis of credible material. The onus, thereafter, shifts to the assessee to prove that the gift is genuine and if the assessee is unable to proffer a credible explanation, the Assessing Officer may legitimately raise an inference against the assessee. If, however, the assessee furnishes all relevant facts within his knowledge and offers a credible explanation, the onus reverts to the Revenue to prove that these facts are not correct. The Revenue cannot draw an inference based upon suspicion or doubt or perceptions of culpability or on the quantum of the amount, involved. Any ambiguity or any ifs and buts in the material collected by the Assessing Officer must necessarily be read in favour of the assessee, particularly when the question is one o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at arises from an examination of the material on record and the findings recorded by the Tribunal, which have been reproduced in detail in preceding paragraphs, particularly in the context of the ques tions of law framed on April 8, 2002, is whether the assessee has discharged his onus to prove that gifts are valid and there cannot be treated as his deemed income under section 69A of the Act. As already recorded, the Tribunal has, after examining the entire mate rial, in detail, recorded a finding that the assessee has discharged onus to prove that the gifts are genuine, thereby affirming the opinion recorded by the Commissioner of Income-tax (Appeals), as regards the gift made by Dr. O. S. Gill but reversing the opinion as regards the gift made by B. P. Bhardwaj. The findings are neither perverse nor arbitrary and may, if at all, be debatable. Dr. O. S. Gill appeared before the Assessing Officer, his income and accounts were verified from the Inland Revenue Service, Great Britain but the Assessing Officer drew an inference against the assessee as Dr. O. S. Gill could not disclose his account number, his answers were held to be vague and there does not appear to be any such relatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner of Income-tax (Appeals) and the Tribunal regarding the gift made by Dr. O. S. Gill are plausible, though debatable, do not call for interference. The Assessing Officer and the Commissioner of Income-tax (Appeals) ignored the fact that the drafts were prepared from the account of Shri B. P. Bhardwaj and if the Assessing Officer was to rely upon the statement made by Shri B. P. Bhardwaj that he had received the money from Shri Varinder Sharma of Moscow, the onus lay upon the Revenue to pursue this lead and trace Shri Varinder Sharma but, unfortunately, no further enquiry was carried out but instead the assessee was asked to disclose the whereabouts and his connection with Shri Varinder Sharma. The assessee denied any association, business or otherwise with Shri Varinder Sharma but admitted that Shri Varinder Sharma was known to him. The onus, therefore, shifted to the Revenue to prove that Shri Varinder Sharma was an associate or an employee and only thereafter could the Revenue raise an infer ence that the assessee had routed his funds through Shri Varinder Sharma, in the garb of a gift drawn in the name of his daughters. A perusal of the record reveals that the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances held that finding of the Tribunal that the assessee has discharged his burden as to the identity as well as the capacity of the donor was based on material and evidence on record and Assessing Officer had not produced any positive evidence which could lead to the inference that the amount received by the assessee was not gift. The Tribunal was correct in deleting the additions made by the Assessing Officer under section 68 of the Act. 16. Considering the facts and circumstances of the case and also respectfully following the decision of the hon'ble High Court of Punjab and Haryana and the hon'ble High Court of Delhi, we are of the view that in the absence of anything to show that the transaction was by way of money laundering, additions could not be made towards gifts when the assessee has discharged his burden by proving the identity, genuineness and capacity of the donor. We further opined that gifts are normally made by relatives through natural love and affection and do not necessarily require any particular occasion. In the present case on hand, the assessee has discharged his burden by furnishing necessary details before the Assessing Officer. The Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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