Anita Chaudhry, J. - (1.) THE revenue has approached this Court by filing the appeal under Section 260 -A of the Income Tax Act, 1961 (for short, 'the Act') laying challenge to the order dated 13.11.2003 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for brevity, 'the Tribunal') in ITA No. 619(ASR)/ 1997 in respect of assessment year 1994 -95.
(2.) THE appellant has claimed that the following question of law would emerge from the order of the Tribunal for determination by this Court: - "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in deleting the addition of Rs. 1,85,000/ - and Rs. 61,788/ - allegedly received by the assessee as foreign gifts? Briefly, the facts of the case are that, for the assessment year 1994 -1995, respondent -assessee filed the return on 30.10.1995 showing his income to be Rs. 1,20,280/ -. As per computation sheet the assessee showed interest income from M/s. Subhash Chander & Sons, Nurmahal on his old deposits, besides, interest on FDRs, saving funds account and interest earned on KVPs. However, the Assessing Officer called upon the assessee to render explanation in respect of some entries, including cash entries of Rs. 1,85,000/ - made on 16.08.1993 and of Rs. 61788/ - dated 24.02.1994 in the account of the assessee. During the course of assessment proceedings, the assessee replied to the questionnaire and furnished explanation. With regard to the aforesaid cash entries, he submitted that he received $6000 and $2000 as foreign gift from Mohinder Singh Handa, his uncle and $2450 from one Piara Singh Johal. According to the assessee both these persons were residing abroad. The assessee also furnished the copies of cashier's cheques and fax letters sent by the creditors regarding sending the amount to the assessee. The Assessing Officer doubted the explanation put forth by the assessee. The Assessing Officer took notice of the fact that Mohinder Handa was a distant relation of the assessee while Piara Singh Johal was found to be not related in any manner. The Assessing Officer also noted that the parents of the assessee were residing in USA and they had not made any gifts, hence, the alleged creditors had no occasion to make the gift in favour of the assessee. The Assessing Officer vide order dated 27.02.1997 held that since the assessee failed to establish the source and capacity of the persons making the gift, therefore, ordered that the said amount be added to be income of the assessee on account of his income from undisclosed sources, as it was bogus gift re -routed as a foreign remittance. The Assessing Officer also gave directions for initiating penalty proceedings as prescribed under Section 271(1)(c) of the Income Tax Act.
(3.) THE assessee appealed before the Commissioner of Income Tax (Appeals), Jalandhar(to be referred as, 'the CIT(A)) by filing an appeal, challenging the addition of amount of Rs. 1,85,000/ - and Rs. 61788/ -, besides some other additions ordered by the Assessing Officer. The CIT(A) vide order dated 3.9.1997,while noticing the fact that the amount of Rs. 1,85,000/ - was credited into the account of the assessee by way of proceeds of foreign draft, coupled with the confirmation from Mohinder Singh Handa and his employer certificate, certifying about the employment of Mohinder Singh Handa in General Motors, Canada with gross income of $57,524/ -, concluded that the assessee has not only proved the identity of creditor, but his capacity also and since the remittance of money was through banking channel, the genuineness of the transactions could not be raised. With regard to entry of Rs. 61,788/ - the CIT(A) concluded that the assessee received the cheque of $2000 on 24.02.1994, which was sent to the bank for collection on 04.04.1994 and the amount was credited into the assessee's account on 20.05.1994, therefore, the same did not pertain to the accounting period. Consequently, CIT(A) ordered deletion of both the amounts from the income of the assessee. The revenue, dis -satisfied with the findings of CIT (A), preferred an appeal before the Tribunal raising its grouse as to the deletion of above amount of Rs. 1,85,000/ - and Rs. 61,788/ - from the income of the assessee on account of foreign gifts. Certain other additions were made by the CIT(A), however, the same are not relevant for the adjudication of this appeal and hence they are not being referred herein.;