COMMISSIONER OF INCOME TAX Vs. VIJAY CHANNA

JUDGEMENT

(1.) IN the return for the relevant year, assessee had shown receipt of unsecured loans aggregating to Rs.2.85 lacs and receipt of gift also amounting to Rs.2.85 lacs. The Assessing Officer disallowed both the claims holding that the assessee has not discharged his obligations under Section 68 of the Income Tax Act pertaining to unsecured loans and the people, who have claimed to have made gifts, did not have sufficient source to make the same and, accordingly, added both the said sums as undisclosed income of the assessee. On appeal, the Commissioner of Appeals held that the assessee has discharged his obligations under Section 68 of the Income Tax Act pertaining to unsecured loans, but the gifts, alleged to have been received, are suspicious as two of the persons, alleged to have given the gifts, denied before the Assessing Officer that any such gift was given by them. The Commissioner of Appeals, accordingly, dismissed the appeal preferred by the assessee insofar as 2 the same related to the amounts of gifts save and except to the extent of Rs.20,000/ -, but allowed the appeal insofar as the same related to the unsecured loans. On an appeal preferred by the assessee, Tribunal has accepted the claims of the assessee to be correct based on voluminous documents said to have been filed before the Tribunal by the assessee. The Tribunal, in its order, did not deal with the denial by those two people of making any gift to the assessee as they had denied before the Assessing Officer. The Tribunal also did not look into and scrutinize all those voluminous documents. The fact remains that two fact finding Authorities, namely, the Commissioner of Appeals and the Tribunal, have concluded that the assessee has discharged his obligations under Section 68 of the Income Tax Act in respect of unsecured loans and, accordingly, those cannot be treated as undisclosed income of the assessee. The said two fact finding Authorities have also accepted the contention of the assessee that during the relevant year, he received the gift of Rs.20,000/ - . At the same time, two fact finding Authorities, namely, the Assessing Officer and the Commissioner of Appeals held that the assessee has failed to establish that he received gift during the relevant year, except that the Commissioner of Appeals held that the assessee has established receipt of gift of Rs.20,000/ - during the relevant year. This part of the fact, as found by the Commissioner of Appeals, has been affirmed by the last fact finding Authority, namely, the Tribunal. Contrary to the views taken by the Assessing Officer and the Commissioner of Appeals, the Tribunal has held that the assessee has established receipt of the gift over and above Rs.20,000/ - and, while doing so, as stated above, relied upon the voluminous documents, but did not discuss the same and, at the same time, did not apply its mind as regards two of the people, said to have given the gifts, have categorically denied having given such gifts. Furthermore, the voluminous documents, as were produced by the assessee before the Tribunal were required to be produced before the Assessing Officer under Rule 46A of the Income Tax Rules in order to enable the 3 Assessing Officer to verify the evidentiary value thereof in support of the claim as was put forward by the assessee.

(2.) IN the circumstances, we close the matter insofar as the unsecured loans are concerned as well as gift to the tune of Rs.20,000/ - and hold that the Tribunal was not justified in the facts and circumstances of the case in deleting the remaining sum shown by the assessee to have received by way of gift. However, having regard to the fact that the assessee had produced a number of documents to justify his claim, we remit the matter to the Assessing Authority for the purpose of redetermination of the claim pertaining to gift, except to the tune of Rs.20,000/ -.