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TMI Blog2016 (6) TMI 1300X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee contended that the gift was out of love and affection, but the AO was of the view that there was no friendship between donor and donee wherein such amount could be gifted and the AO was of the view that this is a case of getting an entry in the Capital account for gift by cheque which is a practice frequently adopted to introduce capital in the file by tax evaders. Thus, the assessee failed to establish the genuineness of the transaction. 4. The matter carried to the ld. CIT(A) and then went to I.T.A.T. and the appeal of the assessee was dismissed. 5. The ld. Authorized Representative for the assessee submitted before us that the assessee is engaged in the business of manufacturing and sales of readymade garments. The assessee has challenged the legality of imposition of penalty and the AO has imposed the penalty and has written that the penalty proceedings u/s 271(1)(c) are separately initiated. Therefore, it becomes clear that the AO has initiated penalty for concealment of income for filing inaccurate particulars of income. Therefore, the AO is not sure whether the penalty is imposed or is for inaccurate particulars of concealment of income. The ld. Authorized Repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative has read the judgement of Tribunal on page 4 of the order on page 35 of the paper book. The Tribunal has dealt with this issue and examined the documents and Tribunal has held that Smt. Meenakshi Jain issued the cheque giving gifts to various persons and found that these are arranged affairs. It was also observed that donor is not a blood relative of the done and even there was no occasion for making the gift and it was concluded that the assessee failed to establish the genuineness of the transaction and consequent addition was made u/s 68 of the Income-tax Act, 1961. 9. During the course of hearing of the appeal, the ld. Authorized Representative for the assessee fairly agreed upon the insufficiency of the funds available for making the gift as no documentary evidence was produced at any stage. Therefore, the gift received in the books of donee, mere identification of the donor showing the movement of amount through banking channel is not sufficient to prove the genuineness of the gift. Therefore, the Tribunal has confirmed the order of AO and ld. CIT relying upon the decision of Hon'ble Delhi High Court in the case of CIT vs. Suresh Kumar Kakkad, 324 ITR 231 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is unproved but not disproved, i.e., it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false, the Explanation cannot help the Department because there will be no material to show that the amount in question was the income of the assessee ; alternatively, treating the Explanation as dealing with both the ingredients (i) and (ii)above, where the circumstances do not lead to the reasonable and positive inference that the assessee's explanation is false, the assessee must be held to have proved that there was no mens rea or guilty mind on his part; even in this view of the matter, the Explanation alone cannot justify levy of penalty and absence of proof acceptable to the Department cannot be equated with fraud or willful default. The AO should be satisfied during the course of the assessment proceedings that the assessee had concealed particulars of income or has furnished inaccurate particulars of such income. The satisfaction can be gathered from the assessment order. The AO is not required to record his satisfaction in a particular manner or reduce it to writing." 12. I also find that the similar issue has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons. So far as the gift received from Mrs. Meenakshi Jain wife of Shri Dilip Kumar Jain (in the case of Nemichand Jain - ITA No. 108/Ind/2012)) is concerned, the assessee declared income of Rs. 1,31,530/- and gift of Rs. 4 lacs was claimed to be received from Smt. Meenakshi. The learned Assessing Officer issued notice u/s 142(1) dated 1.5.2006, requiring the assessee to produce documentary evidence regarding acceptance of gift, relationship between donor and donee, occasion for the gift, copy of bank statement of the donor, copy of passport alongwith mode of receipt and statement of account for the period from 1.4.2003 to 31.3.2004 of NRE account no. 100044. Admittedly, in the copy of account for the relevant period, cheque no. 288151 dated 15.10.2003 was found to be reflected. Pursuant to the query raised by the Assessing Officer, the assessee vide letter dated 20.11.2006 furnished the following documents :- a. Original gift deed for receipt of NRI gift b. The gift was given by brother in law of Smt. Meenakshi Jain (the donor) to the doneee personally at the residence of Donee. Hence there was no requirement of Envelop and letter written by the donor. c. Copy of return of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in favour and against the assessee but for the genuineness of gift, the test of human probability is most appropriate to decide the issue. For proving natural love and affection, no clear cut formula has been adduced. However, the recipient has to prove all the three ingredients, otherwise the same can very well be treated an accommodation entry as own money of the assessee. So far as the contention of the Revenue that there was no occasion for making such gift is concerned, we are of the view that it is always not necessary as gift made by mother to a son does not require any occasion. Our view is supported by the decision in CIT vs. Sureshkumar Kakkar (2010) 324 ITR 231 (Del.). The totality of facts and the circumstances are indicative of one point that the assessee could not prove the sufficiency of source of income with the donor as no evidence was produced at any stage that the donor was having sufficient funds/source of income so that huge amount can be gifted to a person even who is not a close relative. Transaction by cheque always may not be sacrosanct as was held in Nemichand Kothari (2003) 264 ITR 254 (Gau). Capacity of the donor/lender is an important ingredient to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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