COMMISSIONER OF INCOME TAX vs. SURESH KUMAR KAKAR

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ITA/128/2009HC Delhi27 April 20104 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the gifts from the mother to the son were genuine. The assessee had discharged the primary onus by providing bank statements and confirmation, and the revenue failed to provide cogent evidence to disprove the transaction's genuineness.

What were the facts?

The Assessing Officer and CIT(A) added Rs 24.77 lakhs to the assessee's income under Section 68, treating gifts from his mother as unaccounted income. They doubted the genuineness of the gifts, partly because they were not linked to any specific occasion.

What were the issues?

Whether gifts from a mother to a son, made through banking channels, can be treated as unaccounted income under Section 68 without cogent evidence to disprove their genuineness, even if not linked to a specific occasion.

Which sections of the Income-tax Act were involved?

Section 68,Section 147

AI-generated summary — verify with the full judgment below

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgment delivered on: 27.04.2010

+ ITA 128/2009

COMMISSIONER OF INCOME TAX

..... Appellant

versus

SURESH KUMAR KAKAR

..... Respondent

Advocates who appeared in this case:- For the Appellant

: Ms Rashmi Chopra For the Respondent : Mr Salil Aggarwal with Mr Ravi Pratap Mall

CORAM: HON'BLE MR. JUSTICE BADAR DURREZ AHMED HON'BLE MR. JUSTICE V.K. JAIN

1.

Whether Reporters of local papers may be allowed

to see the judgment ?

2.

To be referred to the Reporter or not ? 3. Whether the judgment should be reported in Digest ?

BADAR DURREZ AHMED, J (ORAL) 1. The revenue is in appeal against the order dated 04.04.2008 passed by the Income-tax Appellate Tribunal in ITA No.2479/D/07 relating to the assessment year 2000-01. Two issues were raised before the Income-tax Appellate Tribunal. One was concerning the validity of the proceedings under Section 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the said Act’). The other was on the issue of merits with regard to the addition of Rs 24,77,000/- made by the Assessing Officer under Section 68 2010:DHC:2336-DB

of the said Act. The addition had also been confirmed by the Commissioner of Income-tax (Appeals). 2. We have heard the counsel for the parties. At the outset, we may state that we have not gone into the issue of the validity of the proceedings under Section 147 of the said Act inasmuch as we find that the Tribunal has come to a correct conclusion on the merits of the matter. On merits, we find that the points in issue are gifts totalling to Rs 24.77 lakhs made by the mother of the assessee in favour of the assessee during the financial year 1999-2000. The Assessing Officer rejected the contention of the assessee that these were gifts made by the mother and held the same to be unaccounted income of the assessee and made an addition of Rs 24.77 lakhs under Section 68 of the said Act. The Commissioner of Income-tax (Appeals) examined the matter and agreed with the findings of the Assessing Officer with regard to the genuineness of the gifts. According to the Commissioner of Income-tax (Appeals), the gifts were not genuine. One of the reasons, and strangely so, was that gifts are normally given on the eve of some occasion and since these gifts were not given in relation to any occasion, the same were doubtful. We fail to understand the logic adopted by the Commissioner of Income-tax (Appeals). We must keep in mind that this is a case of gifts made by a mother to a son. Such gifts do not require any occasion and the mother can make a gift to her son at any time.

3.

Insofar as the identity is concerned, that is an admitted position that the gifts were made by the mother to the son With regard to the 2010:DHC:2336-DB

creditworthiness, the assessee has been able to discharge the onus cast upon him by furnishing the bank statement of his mother (donor) as also the confirmation certificate from the mother confirming the said gifts. Once the assessee has discharged the primary onus, which was cast upon the assessee, it was incumbent upon the Assessing Officer to prove on the basis of a cogent evidence that the transaction was not genuine. There is no such evidence forthcoming. We find that the conclusions of the Assessing Officer and the Commissioner of Income-tax (Appeals) with regard to the genuineness of the transactions are merely conjectural and are based on surmises and assumptions. Such conjectures and assumptions cannot take the place of proof, once the assessee has discharged the primary burden which had been cast upon him.

4.

The Tribunal has correctly concluded that the authorities below had ignored the fact that there was a blood relationship (mother-son) between the donor and the donee; that the gifts are normally made by parents to children through love and affection and do not necessarily require any particular occasion; that the gifts in the present case were all made by cheques and through banking channels. The Tribunal held that when the identity and the capacity are proved beyond doubt and the source of the gifts was the mother, there was no question of making the addition under Section 68 of the said Act.

2010:DHC:2336-DB

5.

In the foregoing circumstances, the findings recorded by the Tribunal do not suffer from any perversity. Consequently, no substantial question of law arises for our consideration. The appeal is dismissed.

BADAR DURREZ AHMED, J

V.K. JAIN, J APRIL 27, 2010 dutt

2010:DHC:2336-DB

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