IT: Amount of gift allegedly received by assessee from NRE account of a person was treated as undisclosed income in view of donee's statement denying such gift
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[2013] 37 taxmann.com 79 (Punjab & Haryana)
HIGH COURT OF PUNJAB AND HARYANA
Commissioner of Income-tax, Karnal
v.
Smt. Kamlesh Rani*
RAJIVE BHALLA AND DR. BHARAT BHUSHAN PARSOON, JJ.
IT APPEAL NO. 255 OF 2005
JULY 4, 2013
Section 68 of the Income-tax Act, 1961 - Cash credit [Gift] - Assessing Officer held gift received by assessee from NRE account of certain person as bogus and added same as undisclosed income of assessee - In his letter to department, donee not only denied gift but also stated that he did not open account from which gift was made to assessee - Whether, on facts, Assessing Officer rightly made addition under section 68 - Held, yes [Paras 5 & 6] [In favour of revenue]
CASES REFERRED TO
CIT v. Puneet Chugh [IT Appeal No. 498 of 2005, dated 7-2-2011] (para 4).
Yogesh Putney for the Appellant. Pankaj Jain and Rishabh Kapoor for the Respondent.
ORDER
Rajive Bhalla , J. - By way of this order, we shall dispose of ITA Nos.255, 250, 252, 256 and 497 of 2005 and ITA No.354 of 2006 as they involve adjudication of the same questions law. For the sake of convenience, facts are being taken from ITA No.255 of 2005.
2. The revenue has preferred this appeal, under Section 260A of the Income-tax Act, 1961 (in short the Act), against order dated 23.8.2004, passed by the Income-tax Appellate Tribunal, Delhi Bench 'E', New Delhi for the assessment year 1994-95, whereby orders passed by the C.I.T. (Appeals) and the Assessing Officer have been reversed.
3. The Assessing Officer passed an order holding that the gift received by Kamlesh Rani respondent from the N.R.E. account of one Sanjeev Gupta was bogus and, therefore, added Rs.2,22,000/- as undisclosed income. The assessee filed an appeal before the C.I.T. (Appeals) which was dismissed on 18-11-2003. Aggrieved by these orders, the assessee filed an appeal. The Income-tax Appellate Tribunal deleted the addition by holding that Assessing Officer has failed to discharge the burden of proving that the gift is not genuine. The appeal was admitted on the following questions of law:—
| "1. | Whether on the facts and circumstances of the case the learned ITAT was right in law deleting the addition of Rs.2 lacs made by the Assessing Officer on account of alleged NRI gifts when neither the financial capacity of the alleged donor nor relationship with the assessee nor e event for making the alleged gifts are proved on record? | |
| 2. | Whether on the facts and circumstances of the case, the learned ITAT was right in law in deleting of Rs.20,000/- made by the Assessing Officer on account of commission paid by the assessee for arranging the bogus NRI gifts of Rs.2 lacs? | |
| 3. | Whether on the facts and circumstances of the case the learned ITAT was right in law in deleting the addition of Rs.2.20 lacs made by the assessing officer towards income of the assessee as undisclosed u/s 68 of the Income-tax Act, 1961?" |
4. Counsel for the parties are ad idem that the questions of law framed in the present appeals have been answered in favour of the revenue in ITA No.498 of 2005 titled as CIT v. Puneet Chugh, decided on 7-2-2011. Counsel for the private respondent, however, submits that, though these questions have been answered in favour of the revenue, but as the revenue has not discharged the onus, to establish that the assessee has not offered any explanation or that the explanation furnished is not satisfactory, the matter may be remitted to the assessing authority for adjudication afresh in accordance with Sections 68 and 69 of the Act. Counsel for the respondent submits that a perusal of the order passed by the assessing authority reveals, that the person said to have made the gift to the assessee has written a letter to the Department, denying any gift to the assessee and has even gone to the extent of stating that he did not open the bank account from which the gift was said to have been made to the private respondent.
5. We have heard counsel for the parties, perused the impugned and as it is admitted by counsel for the assessee that the questions of law framed in these appeals have been answered in favour of the revenue, in ITA No.498 of 2005, Puneet Chugh's case (supra) find no reason to accept the argument raised by Counsel for the assessee. It would be appropriate to point out that the donee addressed a letter to the Department, not only denying the gift but also stating that he did not open the account from which the gift was made to the private respondent.
6. Consequently, the appeals are allowed, the questions of law are answered in favour of the revenue in terms of judgment in ITA No.498 of 2005 and order dated 23-8-2004, passed by the Income-tax Appellate Tribunal, Delhi Bench 'E', New Delhi is set aside.
VARSHARegards
Prarthana Jalan
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