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Shri Tirath Ram Gupta v. CIT, Aaykar Bhawan, Rishi Nagar, Ludhian - ITA-167-2005  RD-P&H 7950 (28 September 2006)
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
ITA No.167 of 2005
Date of decision: 14.9.2006
Shri Tirath Ram Gupta
(S/o Sh.Jagan Nath, 164, Atam Nagar Ludhiana(Punjab) ...Appellant
CIT, Aaykar Bhawan, Rishi Nagar, Ludhiana ...Respondent
CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL
HON'BLE MR. JUSTICE RAJESH BINDAL
Present: Mr. S.K.Mukhi, Advocate, for the appellant.
Mr. S.K.Garg Narwana, Advocate for the respondent.
This appeal has been preferred by the assessee proposing following substantial questions of law arising out of order dated 19.1.2005 passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short, 'the Tribunal') in ITA No.503/Chandi/2001, in respect of assessment year 1997-98:-
"A. Whether, on the facts and circumstances of the case, the ITAT was justified in confirming the action of authorities below by upholding the addition made on account of impugned Gift of Rs.1 lakh?
B. Whether, on the facts and circumstances of the case, the findings of ITAT are perverse and against the evidence on record thus unsustainable in law?
C. Whether the ITAT has misdirected itself in being influenced by irrelevant factors and applying erroneous criteria while deciding the issue of genuineness of the impugned gift?"
The assessee had shown foreign gift of Rs.1 lac from one Darshan Singh. The Assessing Officer asked the assessee to explain the ITA No.167 of 2005 2
foreign gift and relationship with the donor. On being asked, the assessee stated that he was not aware about the business of the donor. Statement of father of donor, Shri Mukhtiar Singh was recorded and it was found that the gift was not genuine. On appeal, the CIT (A) reversed this view taken by the Assessing Officer. On further appeal, the Tribunal set aside the order of the CIT(A) relying upon judgment of this court in Lal Chand Kalra v.
CIT, 22 CTR 135 and judgment of Delhi High Court in Sajan Dass and Sons v. Commissioner of Income Tax, (2003) 264 ITR 435, holding that:- "the mere identification of the donor and the receipt of gift amount through banking channel was not sufficient to prove the genuineness of the gift. Since the claim of the gift was made by the assessee, the onus lay on him not only to establish the identity of the person making the gift but also his capacity to make the gift and that it had only been received as gift from the donor." Reference was also made to judgments of the Hon'ble Supreme Court in Commissioner of Income Tax, West Bengal II v. Durga Prasad More, (1971) 82 ITR 540 and Sumati Dayal v. Commissioner of Income Tax, (1995)214 ITR 801. The Tribunal concluded that the gift was not genuine.
We have heard learned counsel for the parties and perused the findings recorded by the Tribunal.
A gift is generally given out of natural love and affection and without any consideration, which necessarily denotes closeness between the donor and the donee. It can be given either on some occasion or to help a relative or friend. To see the genuineness of a gift, the test of human probability is the most appropriate. 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 identity of the donor, his creditworthiness, relationship with the donee and the occasion is proved.
Unless the recipient proves the genuineness thereof, the same can very well be treated to be an accommodation entry of assessee's own money, which is not disclosed for the purpose of taxation.
The above considerations for testing the genuineness of a gift ITA No.167 of 2005 3
are not exhaustive, as there may be other reasons also which would be appropriate for considering the genuineness of the gift.
In the instant case, what has been found by the Tribunal is that there was no occasion for the alleged donor to have gifted huge amount of money to the assessee and his family. The donor was merely working as Watchman in a foreign country who gifted a sum of Rs. one lac each to the assessee, two sons and two other family members, which is highly improbable. Further, as regards the relation of the assessee with the donor is concerned, the evidence on record put in by the assessee is contradictory.
When the assessee was asked to inform the name of the donor, he did not know the same except saying that in fact, his name was "Titoo". When other details regarding the donor were asked, the answer of the assessee was that it is only his counsel who will give further details and in fact, rightly so because it seems that it was all arranged by some one else for the assessee.
The Tribunal on a consideration of the facts including what has been narrated in brief above, has come to the conclusion that the gift received by the assessee was not genuine. Learned counsel for the assessee, though took pains to challenge to the findings recorded by the Tribunal, but miserably failed as he was not able to justify the inherent discrepancies in the statement made by the assessee himself. The view taken by the Tribunal is only possible view in the facts and the evidence on record. Concurring with the same, we do not find any merit in the contention raised by the learned counsel for the assessee.
In judgment dated 31.7.2006 rendered by us in ITA No.265 of 2006 (Sh.Subhash Chander Sekhri v. DCIT Central-II, Jalandhar, wherein in identical circumstances, we have upheld the view taken by the Tribunal.
In view of the above, we hold that no substantial question of law arises.
The appeal is dismissed.
(Adarsh Kumar Goel)
September 14, 2006 (Rajesh Bindal)
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