Decided on September 19,2008



George Mathan, J.M. - (1.) THIS is an appeal filed by the Revenue against the order of learned CIT(A)-XVI, New Delhi, in Appeal No. 114 of 2005-06, dt. 5th Jan., 2006 for the asst. yr. 2001-02.
(2.) S/Shri Ashwani Taneja, Dr. Rakesh Gupta and Tarun Kumar, advocates represented on behalf of the assessee and Shri G.S. Sohata, senior Departmental Representative, represented on behalf of the Revenue. In this appeal, the Revenue has challenged the action of the learned CIT(A) in deleting the addition made on account of gifts taxed under Section 68 of the Act as the genuineness of the transaction and the creditworthiness of the donors were not proved.
(3.) THE facts that led to this appeal are that the assessee derives salary income from Apollo Tyres Ltd. and had offered the same to tax. He had also declared loss from M/s U.S. Oberoi & Co. which was doing the business of sale and purchase of shares and securities. In the course of assessment proceedings it was noticed that the assessee had shown gifts having been received to an extent of Rs. 16,41,080. THE same has been shown in the capital account of the assessee. It was noticed that the assessee has received the gifts as follows: JUDGEMENT_3652_TLIT0_20080.htm 4.1 THE assessee was asked to substantiate the claim of the gifts received. THE assessee had produced the affidavits of the donors, the confirmation letters, copies of passports, IT returns, advice from the money changer (Western Union), copies of the cheques received from the donors. THE assessee has also produced the photograph of the assessee with the family of one of the donors. THE assessing authority had found various defects in the affidavit produced insofar as some of the affidavits were undated and there were no witnesses to the affidavits. As a consequence to the defects in the affidavits produced the assessing authority held that the gifts as received by the assessee from the NRI to the extent of Rs. 16,41,080 bogus and consequently, the same were assessed as income from undisclosed sources by invoking the provisions of Section 68 of the Act. Aggrieved, the assessee filed first appeal to the CIT(A) who after calling for remand report from the AO in regard to the submissions made by the assessee held that the AO had not pointed out any fault which supported the suspicion that the gifts were not genuine or have been received from persons whose identity or creditworthiness could not be established. THE learned CIT(A) further held that the assessee had produced sufficient evidences in the form of copy of the passport, copy of the IT returns, copy of the confirmations, copy of the advice of the money transfer agent, photograph with the donor and had held that all the gifts received by the assessee were genuine. Aggrieved with the order of learned CIT(A), the Revenue has filed this appeal.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.