Sajan Dass & Sons vs Commissioner Of Income Tax
2002 Latest Caselaw 2053 Del

JUDGMENT

D.K. Jain, J.

1. This appeal by the assessed under Section 260A of the IT Act, 1961 (for short 'the Act'), is directed against the order, dt. 28th March, 2002, passed by the Tribunal, Delhi Bench 'C', New Delhi in ITA Nos. 1145/Del/97 pertaining to the asst. yr. 1993-94. The following questions, stated to be substantial questions of law have been proposed in the appeal memo :

"(1) Whether, on the facts and circumstances of the case the Tribunal was justified in law in holding that the amount of Rs. 3 lacs received by the assessed/appellant is not in the nature of gift but is an income from undisclosed sources."

(2) Whether under the facts and circumstances of the case the Tribunal was justified in law on true interpretation of the provisions of law under Section 68 or under Section 69 in holding that as per the requirement of law the appellant has not discharged the burden on him in respect of the said transaction of gift and arriving at the conclusion which are not relevant to the issue and hence the finding are perverse as the conclusion is based on no material on record and finding that Rs. 3 lacs is the income of the appellant from undisclosed sources is bad in law."

2. Briefly stated the background facts are as follows :

The assessed, assessed in the status of HUF, derives income from house property, capital gains and income from other sources. During the course of assessment proceedings for the asst. yr. 1993-94, the AO noticed an entry of Rs. 3 lacs, which was claimed to have been received as a gift from one Subhash Sethi, son of Tara Chand Sethi, resident of 84, Sunder Nagar, New Delhi, stated to be residing at 36, Windsor Road, Livenshumle, Manchester, U.K., and a British Passport holder. The gift was purportedly received by a pay order, drawn on a NRE account with American Express Bank, New Delhi. Suspecting the genuineness of the said gift, the AO made certain enquiries, which revealed that the NRE account in American Express Bank, was opened on 10th Feb., 1993, and by 31st March, 1993, the amounts debited in the account aggregated to about Rs. 1.65 crores, in the form of cheques issued in favor of more than fifty different persons. He also noticed that the affidavit filed in support of the said gift was executed on 22nd Feb., 1993, but was attested by the Notary on 15th April, 1993; the copy of the passport of said Subhash Sethi, filed by the assessed, indicated that he was not in India during that period to execute the affidavit and get it attested by the Notary. In the light of the facts emerging from the investigations, the AO required the assessed to prove that the gift deed or the affidavit were executed and affirmed at New Delhi particularly when the signatures of Subhash Sethi on the passport, the affidavit and the gift deed were not tallying. Besides, during the course of these proceedings, information was also received by the AO that said Subhash Sethi had sent a letter to the Directorate of Enforcement, New Delhi, wherein he had denied having deposited or remitted any amount in the said NRE account and also stating that he had not made any gifts to anyone in India. The assessed was confronted with the said communication from Subhash Sethi. With all this material in his possession, the AO issued summons to the assessed under Section 131 of the Act to appear before him for the purpose of recording of his statement. The assessed failed to respond to the said summons. Yet another letter in this behalf was issued to him but instead of putting in appearance, he filed a letter stating that once the gift is complete, the donor has no option to change his mind and cannot revoke the gift and further the gift in question being supported by a proper gift deed with supporting affidavit, duly executed by the donor and accepted by the donee, the gift was complete in every respect. Not being satisfied with the explanation, the AO treated the said amount as unexplained cash credit and added the same to the total income of the assessed being undisclosed income.

Against the assessment order, the assessed preferred appeal, to the CIT(A) but without any success. The matter was taken in further appeal to the Tribunal by the assessed but again without success. For affirming the view taken by the lower authorities, the Tribunal took into consideration various circumstances, namely : (i) the AO has categorically questioned the veracity of the gift deed and specifically pointed out that the date of attestation by the Notary and the date of alleged execution of the documents by the deponent do not tally; (ii) the date on which the Notary notarises the document, he affirms that on the said date, the deponent was present before him and accordingly, Mr. Subhash Sethi, the deponent, on the said date should have been present in India at New Delhi but his passport showed that he was not in India on that date; (iii) on comparison of the signatures as appearing on the gift deed notarised on a certain date and signatures in the passport of Mr. Subhash Sethi, the conclusion of the AO that the signatures on the two do not tally; (iv) AO's finding that the signatures of the donor Mr. Subhash Sethi on the gift deed and passport do not tally juxtaposed with the unrebutted evidence on record that before the Enforcement Wing, the donor himself ha contradicted the assertions of the assessed and has categorically denied making any gift to any person at any point of time; and (v) Subhash Sethi having denied opening of any bank account, from which the alleged gift had emanated, could not be ignored by merely relying upon the proposition that the AO was not an expert to comment on signatures.

3. Hence, the present appeal.

4. We have heard Mr. P.C. Jain, learned counsel for the appellant and Ms. Prem Lata Bansal, learned senior standing counsel for the Revenue.

5. It is vehemently submitted by Mr. Jain on behalf of the assessed that the AO having relied on a letter, issued to a third party, namely, the DRI, without confronting the assessed with the same, the assessment order is violative of principles of natural justice and that the assessed having furnished the documents in the form of affidavit of Subhash Sethi and the pay order issued by the American Express Bank, he had discharged the burden to prove that the gift was genuine. It is asserted that since the donor was not in India, he could not be produced before the AO and, therefore, no adverse inference should have been drawn on that score. It is, thus, urged that the Tribunal having ignored these essential factors, its finding to the effect that the gift was not proved gives rise to a substantial question of law.

6. We are unable to persuade ourselves to agree with the learned counsel for the assessed, As rightly observed by the Tribunal, a mere identification of the donor and showing the movement of the gift amount through banking channels is not sufficient to prove the genuineness of the gift. Since the claim of gift is made by the assessed, onus lies on him not only to establish the identity of the person making the gift but also his capacity to make a gift and that it has actually been received as a gift from the donor. Having regard to the inquiries conducted by the AO from the bank, with which the assessed was admittedly confronted and bearing in mind the fact that admittedly said Subhash Sethi was not related to the assessed, we are of the view that the findings recorded by the Tribunal are pure findings of fact warranting no interference. We find it difficult to hold that on the facts of the instant case proper opportunity had not been granted to the assessed to prove the gift.

7. In our opinion, the impugned order does not give rise to any question of law, much less a substantial question of law.

The appeal, being devoid of any merit, is dismissed accordingly.