HANUMAN DASS vs. COMMISSIONER,INCOME TAX

ITA/72/1999HC Punjab & HaryanaPHHC01038388199922 November 2013Author: MR. JUSTICE RAJIVE BHALLA,MR. JUSTICE DR. BHARAT BHUSHAN PARSOON7 pages
AI SummaryDismissed

What were the facts?

The assessee, Shri Hanuman Dass, received foreign gifts totaling Rs. 1,50,000/- from three donors in the United Kingdom for the assessment year 1990-91. The Assessing Officer (AO) disallowed the claim, treating it as income from undisclosed sources, citing the absence of a specific occasion and relationship between the donors and the assessee. The AO also noted that the assessee's brother, sister-in-law, and mother had also received substantial gifts from the same donors. The Commissioner of Income Tax (Appeals) deleted the addition. However, the Income Tax Appellate Tribunal (ITAT) reversed the CIT(A)'s order, restoring the AO's addition. The assessee appealed this decision to the High Court.

What did the High Court hold?

The High Court held that the ITAT was justified in restoring the addition made by the Assessing Officer. The Court found that the foreign gifts were made by donors who were neither related to the assessee nor was there any specific occasion for such gifts. The amounts were substantial, and neither the donors nor the donees had demonstrated that such large gifts had ever been made or received within their families or from such donors. The Court referred to its own previous judgments, particularly in ITA No. 498 of 2005 (CIT, Karnal vs. Puneet Singh) and ITA No. 392 of 2005 (CIT, Faridabad v. Sh. Kamal Gupta), which held that NRI gifts from strangers are not genuine unless the assessee proves natural love and affection and the donor's financial capacity. The assessee failed to establish any occasion, relationship, natural love and affection, or the donor's means and the genuineness of the gift. Therefore, the ITAT's order was not perverse or improper and was upheld. The appeal was dismissed.

What were the issues?

1. Whether a gift made by a stranger is valid in law when the capacity to give the gift is not disputed, and even if the gift is treated as invalid, could the amount be taken as income in the hands of the assessee? (Section 68 of the Income Tax Act, 1961) Assessee's contention: The assessee argued that since the donors' capacity to pay was not disputed and the assessee had accepted the gifts, the addition made by the ITAT was unjustified and illegal, especially after the CIT(A) had deleted it. The assessee relied on the CIT(A)'s finding that the AO's conclusions were contradictory. Revenue's contention: The revenue contended that the capacity of the donors to pay was irrelevant in this case, as there was neither any occasion nor any relationship justifying such gifts. The revenue emphasized that the gifts were not small and were made by donors who were not related to the assessee.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 68

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: November 22, 2013. Shri Hanuman Dass ... Appellant v. The Commissioner of Income Tax, Jalandhar and another ... Respondents CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Shri Aalok Mittal, Advocate, for the appellant. Shri Vivek Sethi , Advocate for the respondents. Dr. Bharat Bhushan Parsoon

, J. This income tax appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter mentioned as, the Act), against order dated 18.12.1998 (Annexure P-3) passed by Income Tax Appellate Tribunal, Amritsar in ITA No.526(ASR)/1992, was admitted for hearing on the following substantial question of law:- “Whether a gift made by a stranger is valid in law when the capacity to give the gift is not disputed and even if the gift is treated as invalid could the amount be taken as income in the hands of the assessee?” For the assessment year 1990-91, foreign gifts had been received by the assessee from the donors (mentioned against each) from United Kingdom. The details are as under:- (i) Shri Puran C

The order continues below.

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