GURCHARAN SINGH vs. COMMISSIONER OF INCOME TAX LDH.

ITA/138/2001HC Punjab & HaryanaPHHC01041985200112 February 2020Author: MR. JUSTICE AJAY TEWARI,MR. JUSTICE AVNEESH JHINGAN2 pages
AI SummaryDismissed

What were the facts?

The assessee, Gurcharan Singh, appealed against an order that disallowed certain gifts. One gift of ₹60,000 was from an NRI, Hikayat Ali, who was stated to be a friend with no relation to the assessee. Another gift of ₹19,000 was from Sohan Singh, a first cousin. The Commissioner (Appeals) had deleted the addition for the ₹19,000 gift, noting bank transfer. However, the Tribunal noted that only a photostat of the gift deed was provided, and the assessee did not appear before the Assessing Officer (AO) for verification. The High Court considered the case in light of a previous decision in Shri Hanuman Dass vs. The Commissioner of Income Tax, Jalandhar.

What did the High Court hold?

The High Court held that for the gift of ₹60,000 from Hikayat Ali, the facts were covered by the decision in Shri Hanuman Dass vs. The Commissioner of Income Tax, Jalandhar. In that case, even with the donor having the means, the absence of any relationship, natural love and affection, or occasion for the gift, coupled with the jurisdictional High Court's authority being against the assessee, led to upholding the impugned order. The Court found no perversity or impropriety. For the gift of ₹19,000 from Sohan Singh, the Tribunal's finding that mere receipt of money through bank transfer does not prove identity, creditworthiness, or genuineness of the gift was upheld. This was particularly so as only a photostat of the gift deed was furnished, and the assessee did not appear before the AO for verification. Consequently, no substantial question of law arose.

What were the issues?

1. Whether the disallowance of a gift of ₹60,000 received from an unrelated friend, Hikayat Ali, is valid, considering the donor's means and the absence of any natural love, affection, or occasion for the gift, and if the decision in Shri Hanuman Dass vs. The Commissioner of Income Tax, Jalandhar is applicable. (Question of law/mixed fact and law, turning on Section 68 of the Income Tax Act, 1961). 2. Whether the mere fact of receiving ₹19,000 through bank transfer from a cousin, Sohan Singh, is sufficient to prove the identity, creditworthiness of the donor, and genuineness of the gift, especially when only a photostat of the gift deed was provided and the assessee failed to appear before the AO for verification. (Question of law/mixed fact and law, turning on Section 68 of the Income Tax Act, 1961). Assessee's contentions: Not explicitly recorded for the ₹60,000 gift, but implied reliance on the gift being from a friend. For the ₹19,000 gift, reliance was placed on the bank transfer and the donor being a cousin, and the deletion of addition by the Commissioner (Appeals). The assessee cited Commissioner of Income Tax v. R.S. Sibal, (2004) 269 ITR 429, which was distinguished by the Court. Revenue's contentions: Not explicitly recorded, but impliedly supported the disallowance based on the lack of relationship, occasion, and failure to substantiate the gifts properly.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 68

AI-generated summary — verify with the full judgment below

419 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH **** ITA No. 138 of 2001 DECIDED ON: FEBRUARY 12, 2020 GURCHARAN SINGH APPELLANT VERSUS COMMISIONER OF INCOME TAX, LUDHIANA AND ANR RESPONDENTS CORAM: HON'BLE MR. JUSTICE AJAY TEWARI HON'BLE MR. JUSTICE AVNEESH JHINGAN Present: Mr. Mukul Gupta, Advocate for Mr. Alok Mittal, Advocate for the appellant. Mr. Rajesh Katoch, Sr. Standing Counsel with Ms. Pridhi Jaswinder Sandhu, Jr. Standing Counsel for the respondent-Income Tax Department. **** AJAY TEWARI, J (Oral): By this appeal under Section 260-A of the Income Tax Act, 1961 (for short 'the Act'), appellant has challenged the order of the authority below whereby it had disallowed certain gifts which the appellant-assessee had allegedly received.

2.

One of the gift of `60,000/- was received from one Sh. Hikayat Ali who was an NRI. It is undisputed that there was no relation between the appellant and the alleged donor and the only explanation given by the appellant was that the alleged donor was a friend of his.

3.

In the circumstances the facts of the case are covered by the decision of this Court rendered in ITA No. 72 of 1999, decided on 22.11.2013, titled as Shri H

The order continues below.

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