M.M. Kumar, J. - (1.) THIS is assessee's appeal filed under Section 260A of the IT Act, 1961 (for brevity, 'the Act'), challenging order dt. 19th Jan., 2007, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Arnritsar (for brevity, 'the Tribunal') in ITA No. 147/Asr/1997, in respect of asst. yr. 1993 -94 (A -1), upholding order of the AC), dt. 29th March, 1996 (A -2) that the gift received by the daughter of the appellant is a taxable cash credit and addition of Rs. 1,90,000 was fully justified. Accordingly, the order passed by the CIT(A), dt. 11th Dec., 1996 (A -3). has been set aside. The assessee appellant has claimed that following substantial questions of law would arise for our determination: (a) Whether, in view of peculiar facts and circumstances of the case, the Tribunal was justified in concurring with the order of the AO thereby setting aside order of CIT(A) on the basis of conjectures and surmises and without citing anything against the appellant on record and thereby treating a genuine gift as bogus? (b) Whether the gift given by a non -resident out of natural love and affection to daughter of a friend for her marriage in lieu of help by grandfather to be treated as income of father? (c) Whether, on the facts and circumstances of the case, the findings of Tribunal are perverse and against the evidences on record, thus unsustainable in law? (d) Whether the Tribunal has misdirected itself in being influenced by irrelevant factors and applying erroneous criteria while deciding the issue of genuineness of the impugned gift?
(2.) BRIEF facts of the case are that the assessee appellant is a dealer in real estate being proprietor of M/s G.S. Traders. A search at his business and residential premises was carried on 17th Dec., 1993 and accordingly notices under Sections 142(1) and 143(2) of the Act were issued calling upon the assessee appellant to furnish his reply. The (AC) after enquiry from the assessee completed the assessment vide order dt. 29th March, 1996. Besides other discrepancies, the AO also found that the assessee's daughter Miss Dimpy Jaggi received a gift of Rs. 1,90,000 from Shri Natha Singh son of Shri Harnam Singh, residing at Hong Kong, with whom she has no relation. Statement of Shri Natha Singh was recorded and he specifically denied having made any gift to Miss Dimpy Jaggi. Accordingly, the AO made an addition of Rs. 1,90,000 on account of bogus gift in the income of the assessee respondent. It is appropriate to mention that certain other additions were also made in the income of the assessee appellant on different counts, however, the same are not subject -matter of challenge in the instant appeal. The AO assessed the net taxable income as Rs. 33,79,532 instead of Rs. 1,16,460 mentioned in the return which was initially filed and processed under Section 143(1)(a) of the Act. On appeal to the CIT(A), the additions made by the AO were deleted to the extent of Rs. 27,92,685, including the addition of Rs. 1,90,000 on account of gift received from Shri Natha Singh. The view taken by the CIT (A) in deleting the addition of Rs. 1,90,000 is discernible from para 11.2 of the order, which reads as under: 11.2 I have considered the facts of the case and the submissions of the learned Counsel for the assessee. I have also gone through the affidavit of S. Natha Singh and the statement of S. Natha Singh recorded by the AO on 19th March, 1996. In his statement S. Natha Singh has stated that he is staying in Hong Kong for the last 30 years and the assessee is his fast friend and they studied in the school together. That he wanted to gift the money for the marriage of the assessee's daughter. That his sister and her husband are staying in the village Kokalpur in District Kapurthala and he has not made any gift to them as their children are living abroad. That, the gift was made out of his NRE bank account. That he is having electronic goods shop in Hong Kong and having annual income of Rs. 8 lacs. That the assessee's father helped him when he went abroad and he often comes to India once or twice in a year. From these statements of S. Natha Singh, no inference can be drawn to suggest that the gift is bogus. On more or less similar situation the addition by disbelieving the genuineness of the gift was deleted by the Hon'ble Tribunal Amritsar, Bench by order dt. 7th June, 1995 in ITA No. 84/Asr/1990 for asst. yr. 1988 -89 in the case of Daljit Singh proprietor of Jaimal Singh Daljit Singh v. ITO. The Hon'ble Tribunal extracted the observations of Hon'ble Delhi High Court in the case of CIT v. : [1990]184ITR121(Delhi) and then observed in para 7 as under:.... A bare perusal of the above would show that the CIT(A) has relied upon the decision of the Tribunal in the ease of Daljit Singh v. ITO ITA No. 84/Asr/1990, dt. 7th June, 1995 as well as observations of Delhi High Court in the case of CIT v. : [1990]184ITR121(Delhi) .
(3.) HOWEVER , on further appeal to the Tribunal by the Revenue, the view taken by the CIT(A) on the issue of gift was reversed by holding as under: 61. With regard to this issue, we are not in agreement with the assessee that his gift needs to be accepted as genuine gift. Admittedly, there is no relationship between the donor and the donee. Also there was no occasion for making the gift. Strikingly, the sister and brother -in -law of the donor live in the same village as that of the assessee. However, that the donor had never made any gift to them on the retest (pretext?) that their children are living abroad. Moreover the donor's annual income is only about Rs. 8 lacs and the amount gifted is a whopping sum of Rs. 1,90,000 which is wholly incongruous with such income of the donor. When we apply the test of human probability to the facts of the present case, it does not appeal to us that a stranger having meager income of Rs. 8 lacs per annum would donate a sum of Rs. 1,90,000 to a person, with whom he has no blood relation and without any specific occasion. All these facts persuade us to agree with the AC). The learned CIT(A) has merely gone by the affidavit and the statement of the donor; the mere fact that the gift was made out of NRE bank account of the donor does not help the case of the assessee. Reliance by the Tribunal in the case of Shri Daljit Singh, is also uncalled for in the presence of the decision of the jurisdictional High Court in the case of Lal Chand Kalra (supra). Similar is the fate of A. Rajendran and Ors. (supra), relied on by the learned Counsel for assessee. It is not possible to digest the story of the assessee. The conduct of the donor shows that there was no love lost between him and his sister and her family. Though she was living with the assessee. The donor did not have any relation with the donee. His income was not commensurate with the gift made. All this goes to show that the conclusion recorded by the learned CIT(A) was not validly possible to the arrived at (?). Direct evidence can never be available for everything. Sometimes, the facts speak loud and clear. Very often, like in the present ease, the Courts have to go through the enquiries from the attending circumstances. In the present case, the circumstances do not go in favour of the assessee. The grievance of Department is justified.;