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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI
Before: SMT. DIVA SINGH & SH. O.P. KANT
ORDER PER O.P. KANT, A.M.: This appeal by the assessee is directed against the order dated 25/02/2013 of learned Commissioner of Income-tax (Appeals), Ghaziabad, for assessment year 2006-07, raising following grounds: i. That on the facts of the case and under the law, the learned CIT(A) has erred in rejecting the assessee’s claim that the learned A.O. had wrongly/illegally assumed jurisdiction to issue notice u/s 148. ii. That on the facts of the case and under the law, the learned CIT(A) has erred in upholding the addition of Rs. 4,08,000/-, made by the learned A.O. u/s 69 in the hands of the assessee for A.Y. 2006-07 iii. That on the facts of the case and under the law, the learned CIT(A) has erred in reject ting the assessee’s claim that addition of Rs. 4,08,000/- was not called for A.Y. 2006-07. iv. That charging of interest u/s 234B is arbitrary, unjust & illegal.
The facts in brief of the case are that the assessee filed return of income declaring income of Rs. 1,29,671/- on 17/10/2006. Subsequently, proceedings were initiated under section 147 of the Income-tax Act, 1961 (in short ‘the Act’) by way of issue of notice under section 148 of the Act on 11/03/2008. It was replied by the assessee that return filed on 17/10/2006 might be treated as return of income in response to notice under section 148 of the Act. The assessee was also supplied reasons for initiation of proceedings under section 147 of the Act on 04/04/2008. Thereafter, notice under section 143(2) of the Act was issued. In assessment year 2005-06, the Assessing Officer noted that the assessee received a gift of Rs. 10,07,749/- through a banker’s cheque from her mother Smt. Angoori Devi, who gave the alleged gift out of the sale proceeds of her jewellery having following details : Sl. Bill Date Particulars Purity Weight Rate Amount No. No. 1. 256 15.01.2005 Old gold 22 ct. 1767.00 5,550/- 9,80,685/- ornament. Gold grams. Gold- 19.0 4,560/- 8,664/- One-piece D Grams diamond Diamond- bracelet in 18- 2.00 carats 9,200/- 18,400/- carat gold 10,07,749/- 2. 273 17.03.2005 Diamond Gold G Gold-96.950 4,725/- 45,809/- Jewellery Grams D Diamond- 10,500/- 3,62,250/- 34.50carat 4,08,059/-
The Assessing Officer observed gift of Rs. 4,08,000/- through a pay order dated 02/04/2005 from her mother Smt. Angoori Devi, which was received in the year under consideration. In the assessment year 2005-06, the Assessing Officer held that the alleged sale of the jewellery was actually sham transaction and capacity/creditworthiness of the donor was not established and, thus, the alleged gift of Rs. 10,07,749/- was added as income of the assessee under section 69 of the Act. Accordingly, for the year under consideration also the Assessing Officer asked the assessee as to why the gift of Rs. 4,08,000/- received from the same donor might not be held as undisclosed income of the assessee. It was submitted by the assessee that gift was duly confirmed by the donor, Smt. Angoori Devi and the addition made in assessment year 2005-06 was duly challenged before the learned Commissioner of Income-tax (Appeals). The facts of the case being identical to the facts for assessment year 2005- 06, thus, relying on the findings in assessment order for assessment year 2005-06, the Assessing Officer held the receipt of gift of Rs. 4,08,000/- as unexplained investment in terms of section 69 of the Act. Aggrieved, the assessee filed an appeal before the learned Commissioner of Income-tax (Appeals), challenging the validity of the re-opening proceedings under section 147 of the Act as well as merit of the addition. The learned Commissioner of Income-tax (Appeals) upheld the reassessment proceedings and also upheld the Commissioner of Income-tax (Appeals) in assessment year 2005-06, and the findings of the Tribunal, Delhi bench in ITA No. 216/Del/2010. Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above.
In ground No. 1, the assessee has challenged reassessment proceedings. 4.1 Before us, the learned Authorised Representative of the assessee reiterating the submission made before the learned Commissioner of Income-tax (Appeals), submitted that reasons for initiating reassessment proceedings under section 147 of the Act were recorded on 04/04/2008 on receipt of a letter from the assessee on 24/03/2008, seeking the copy of reasons recorded. He further submitted that as per the settled law the Assessing Officer was required to record reasons for initiating the proceedings under section 147 of the Act, prior to issuing the notice under section 148 of the Act, and, therefore, the reassessment proceeding are invalid and not in accordance to the law. 4.2 The learned Senior Departmental Representative, on the other hand, relying on the order of the authorities below submitted that the averment of the assessee that reasons recorded after the issue of notice is without any documentary evidence and, therefore, needs to be rejected. 4.3 We have heard the rival submissions and perused the material on record. The learned Commissioner of Income-tax (Appeals) has decided the issue with the following observations: “Just because the Assessing Officer has intimated to the assessee about the reasons u/s 147, vide his letter dated 04.04.2008; does not at all imply that reasons were recorded on 04.04.2008. In fact, any sensible implication would be otherwise. The appellant itself argues that he had asked for reasons, only after receiving the notice u/s 148. Thus, if reasons were supplied to him vide letter dated 04.04.2008; it is obvious that those reasons had been recorded much earlier. To cut this unnecessary controversy/objection, I have verified that reasons had been recorded before issuance of notice u/s 148. Hence, this ground of appeal has no merit and substance and the same is rejected.
4.4 We find that the assessee has not submitted any documentary evidence that reasons for reopening of the assessment were recorded on 04/04/2008 i.e. after the issuance of notice under section 148 of the Act. In this case, notice under section 148 of the Act was issued on 11/03/2008 and the assessee sought copy of the reasons recorded on 24/03/2008. The copy of reasons recorded was provided to the assessee on 04/04/2008. The only basis of presumption of the assessee that reasons were recorded on 04/04/2008, is that the assessee was supplied reasons for reopening of the assessment on 04/04/2008. The assessee failed to supply any documentary evidence in support of its claim that reasons were recorded on 04/04/2008. The learned Commissioner of Income- tax (Appeals) himself also verified the fact that reasons were recorded before issuance of notice under section 148 of the Act.
In view of fact, we do not find any infirmity in the findings of the learned Commissioner of Income-tax (Appeals) on the issue in dispute and, accordingly, the ground of the appeal is dismissed.
The ground No. 2 relates to the sustainence by learned Commissioner of Income-tax (Appeals) of the addition made under section 69 of the Act for Rs. 4,08,000/-by the Assessing Officer. 5.1 Before us, the learned Authorized Representative of the assessee submitted that the assessee received gifts of Rs. 10.07 lakhs on 24/01/2005 i.e. in assessment year 2005-06 and Rs. 4.08 Lacs on 02/04/2005 from mother of the assessee Smt. Angoori Devi. He further submitted that the Assessing Officer in assessment year 2005-06 held that in financial year 2004-05, relevant to assessment year 2005-06 the assessee’s mother received Rs. 10.07 lakhs and Rs. 4.08 Lacs from sale of jewellery to M/s. Brijwasi Jewellers. He further submitted that the assessee has already discharged its onus of explaining the identity and creditworthiness of the donor of gift and genuineness of the transaction. The learned Authorized Representative also filed paper book containing bank passbook of the assessee & donor etc. He also relied on the judgment dated 17/11/2009 of the Hon’ble Allahabad High Court in the case of CIT Vs. Rajkumar Aggarwal in ITA No. 179/2008. 5.2 On the contrary, the learned Senior Departmental Representative relying on the orders of the authorities below submitted that the gift received from the same donor in immediately preceding assessment year was held as unexplained investment by the authorities below and which has been upheld by the Tribunal in ITA No. 216/Del/2010. He further submitted that in the year under consideration, the assessee failed to discharge onus in respect of genuineness of the transaction as well as creditworthiness or the financial capacity of the donor. 5.3 We have heard the rival submission and perused the material on record including the order of the Tribunal (supra). The assessee received gift of Rs. 10,07,749/- from her mother in preceding assessment year. The source of money in the hands of her mother was explained as sale of jewellery to M/s Brijwasi Jewellers, which was not accepted by the authorities below and gift was held as non-genuine. The findings of lower authorities have been upheld by the Tribunal in ITA No. 216/Del/2010. During the year under consideration, also the assessee received gift of Rs. 4,08,000/- from her mother and source of the gift was explained as money received from sale of jewellery to M/s. Brijwasi Jewellers. The findings of the Tribunal in are as under :
“7. We have considered the facts of the case and submissions made before us. We may summarise the evidence filed and referred to by the learned counsel for supporting the case of the assessee. A confirmation letter dated 25.6.2005 has been filed from Smt. Angoori Devi, in which it is mentioned that the gift has been given vide cheque no. 845872 dated 20.1.2005 drawn on Punjab National Bank and that she is not assessed to tax as her income is below taxable limit. Further, there is evidence to Punjab National Bank and the amount has been credited in the joint account of Shri Rakesh Kumar, husband and Smt. Raj Bala, the assessee on 22.1.2005. Purchase voucher has been filed from Brijwasi Jewellers dated 15.1.2005 showing purchase of gold jewellery weighing 1767.00 grams and diamond jewellery containing gold weighing 18 grams and diamond 2 cts. from Smt. Angoori Devi for a sum of Rs. 10,07,749/-. Two valuation reports made by Shri Virender Kumar Jain dated 6.4.1998 and 22.10.2004 have been filed showing valuation of 1933.950 grams of jewellery at Rs. 10,96,754/- and Rs. 4,42,449/- respectively. These reports furnish item-wise details while such item-wise details are not furnished in the bill of Brijwasi Jewellers. Letter dated 1.8.2007 has also been filed from Brijwasi Jewellers stating inter-alia that jewellery of the value of Rs. 10,07,749/- and Rs. 4,08,059/- was purchased, the payment in respect of which has been made vide cheques dated 15.1.2005 and 17.3.2005 respectively. The jewelers have their shop at 1170, Kucha Mahajani, Chandni Chowk, Delhi-6, and assessed to tax by the Assessing Officer, Circle 29(1), New Delhi. They have also enclosed a copy of the return and the enclosure for assessment year 2006-07, showing loss of Rs. 26,78,454/-. Their bank account showed a debit of Rs. 10,07,749/-on 18.1.2005 and a credit of Rs. 10.00 lakh by way of cash on the same day. The credit entry has been made prior to the debit entry. In statement dated 23.8.2007, recorded on oath u/s 131 of the Act, Smt. Angoori Devi had stated inter-alia that she had been married about 75 years ago and her husband was carrying on kirana business on a medium scale. Neither she nor her husband had any bank account. She had received gold jewellery at the time of her marriage, whose weight is not known to her. This jewellery was buried under the ground. The jewellery was given to the son-in-law for the purpose of sale. The sale proceeds were gifted to the daughter. After the sale, she is not left with any jewellery or any other asset. She did not gift any amount to other children.
The question is-whether, in the light of evidences filed by the assessee, the gift is genuine or not? 8. We may now deal with various cases relied upon by the rival parties. We may start with the cases cited by the Id. counsel. In the case of CIT Vs. Daulat Ram Rawat Mull (19783) 87 ITR 349, the question before the Hon’ble Supreme Court was-whether, on the facts and in the circumstances of the case, there was material before the Income-tax Tribunal to hold that the sum of Rs. 50,000/- out of the sum of Rs. 5.00 lakh standing in the name of Biswanath Gupta (Bhuwalka), representing the fixed deposit, was the concealed income of the assessee-firm for the relevant year for the assessment year 1946-47? T he explanation about the source of Rs. 5.00 lakh deposited in the name of Biswanath was that he had kept an amount of Rs. 4,50,000/- with M/s Surajmal Nagar and Rs. 50,000/-in deposit with Komilla Bank. The amount of Rs. 4,50,000/- was stated to have been withdrawn in January, 1941, while the other amount of Rs. 50,000/- was withdrawn from Komilla Bank in March, 1942. The amount of Rs. 5.00 lakh was then transferred by Biswanath to his native place in Rajasthan due to bombing panic in Calcutta. When the war situation improved the money was taken from Rajasthan to Jamnagar for deposit. The explanation was found to be false in view of the admitted position that the amount of Rs. 5.00 lakh in fixed deposit in the name of Biswanath in Jamnagar bank had been tendered at Burrabazar Calcutta branch of Central Bank on November 15, 1944 and thereafter was transferred through Bombay head office of the bank to Jamnagar. There were also other circumstances which pointed to the falsity of the above explanation. In the opinion of the High Court, the falsity of explanation did not warrant the conclusion that the money belonged to the assessee- firm. The Hon’ble Court mentioned that it cannot find any flaw or infirmity in this reasoning. The question was not whether the amount of Rs. 5.00 lakh belonged to Biswanath, but whether it belonged to respondent- firm. A person can be owner of a sum of money even though the explanation furnished by him as to its source is not found to be correct. The conclusion which can be drawn from this case is that a borrower is not expected to explain the source of the funds of the lender. Once it is proved that the lender has given the money, which he was in control of, no adverse inference can be drawn in the case of borrower. The facts of this case are distinguishable as the assessee is not a borrower but a donee in this case. It is not established that the donor was in control of money allegedly gifted to the assessee. It is for the assessee to prove that the gift is genuine. In judging her explanation, the creditworthiness of the donor can certainly be taken into account. 8.1 In the case of T.C.N. Menon Vs. ITO (1974) 96 ITR 149, the assessment was framed ex-parte estimating the income at Rs. 40,000/-, being Rs. 25,000/- from the profession and Rs. 15,000/- from other sources. The Hon’ble Court mentioned that the making of a best judgment assessment is a quasi-judicial process and it has to be based on the materials gathered. Such a process requires that an opportunity of being heard be granted to the assessee. Therefore, the AO ought to have given an opportunity to the assessee to explain as to why his income should not be estimated at Rs. 50,000/-. In absence of such an opportunity, the assessment was quashed and the matter was remitted to the AO for disposing it off in the light of the above observation and the provision of law. The conclusion which can be drawn from this judgment is that the assessment is a quasi-judicial process and the assessee should have been given an opportunity of being heard in respect of any matter which was likely to be decided against her. Such an opportunity had been given by the AO although a wrong section was mentioned. However, the Id. ClT(A) heard the matter at great length. In these proceedings, the assessee had opportunity to state her case fully, which, in fact, had been done. Therefore, this decision has no application to the facts of this case. 8.2 In the case of CIT Vs. Daya Chand Jain Vaidya (1975) 98 1TR 280, the facts are that on the last date of the Rs. 90,000/- were issued and allotted to the assessee, his wife, his major and minor sons. The respective amounts were entered in the books of the company as having been received from the respective shareholders. The AO came to the conclusion that the money in respect of wife, two major and two minor sons of the assessee were, in fact, paid by the assessee. It was submitted that the shares were allotted to him and two minor sons against consideration of stock, furniture and other stores transferred to the assessee company. In respect of wife and two major sons, it was stated that the monies were received from her father and the father of the assessee. The AO accepted the explanation in respect of the assessee and two minor sons but rejected the explanation in respect of wife and two major sons. The Tribunal upheld the decision of the AO. The Hon’ble Court mentioned that there is no finding that the company or the assessee was making any attempt to circumvent tax obligation or perpetuate fraud. Therefore, the case had to be decided on the basis oi tacts on record. There is no evidence that the deposit made by the wife and two major sons came from the assessee. Thus, the addition was deleted. Having considered the facts of the case, we are of the view that they were distinguishable. In the case before the Hon’ble Allahabad High Court, the question was whether investment in the case of wife and two major sons flowed from the assessee. Such is not the question here. The investment in the property has flowed from the assessee. The question before us is whether the nature and source of this investment has been satisfactorily explained by the assessee. In doing so, all facts on record have to be considered along with the explanation. 8.3 In the case of CIT Vs. P.K. Noorjahan (1999) 237 ITR 270, the question be tore the Hon’ble Supreme Court was was-whether, on the facts and in the circumstances of the case and on a true interpretation of section 69 of the Income-tax Act, 1961, the Income-tax Appellate Tribunal is right in law in holding that section 69 of the Act cannot be invoked in respect, of the investment of the assessee and 1968-69, or, as the case may be, 1969-70, should be deleted? The facts are that the assessee was aged about 20 years. On November 15, 1967, she purchased 16 cents of land in Ernakulam and the amount spent by her, including stamp duty and registration charges, for this purchase was Rs. 34,628/-. On November 27, 1968, she purchased another 12 cents of land at Ernakulam and the total investment for this purchase was Rs. 25,902/-. The explanation regarding the source was that the purchases were financed from out of savings from the income of the properties which were left by her mother’s first husband. The explanation was rejected by the AO except to the extent of Rs. 2,000/-. The order was affirmed by the AAC. However, the Tribunal held that even though the explanation about the nature and source was not satisfactory, yet, on the facts and in the circumstances of the case, it was not possible for the assessee to earn the amount invested in the properties and that by no stretch of imagination could the assessee be credited with having earned this income in the course of the assessment year or was even earn it or a decade or more. Therefore, while the explanation was not acceptable, addition could not be made u/s 68. The Hon’ble Court mentioned that the word used in section 69 is ‘may’ and, thus, even when explanation is not found to be satisfactory, the AO has discretion to make or not to make the addition. This discretion has to be exercised judiciously. The Tribunal held that such discretion was not judiciously exercised by the ITO and the AAC as they did not take into account the circumstances in which the assessee was placed. Thus, no error was found in the decision of the Tribunal. The facts of this case are also distinguishable in as much as the assessee is carrying on the business and is having other sources of income, which include capital gains on sale of an immovable property in Shahdara, Delhi. Therefore, it cannot be said that she was not in a position to earn the amount involved in the investment in this year or even in a decade.
8.4 In the case of CIT Vs. Shri Raj Kumar Agarwal, decided by Hon’ble Allahabad 1 Iigh Court, Lucknow Bench, in of 2008 dated 17.11.2009, a copy of which has been placed before us by the Id. counsel, the question before the court was to the effect that-whether, the Tribunal was right in deleting the addition of Rs. 25,05,000/-in respect of loan from Rich Capital & Financial Services Ltd., which was invested in purchase of commercial plot at Gomti Nagar, Lucknow? The assessee filed copies of confirmation letter from the company, the bank account of the company and his own bank account. The loan was returned in the same year. The AO did not accept the explanation of the assessee. He referred to the fact that cash was deposited in the account of the company before issuance of cheques to the assessee. Further, the loan was without stipulation of charging the interest. Therefore, his conclusion was that the assessee failed to discharge the onus in view of the aforesaid fact and the failure of the assessee to produce the director of the company for examination. The Hon’ble Court mentioned that the identity of the lender stands explained as it is a public limited company. The company is regularly assessed to tax and it has permanent account number. Therefore, it was concluded that the onus has been discharged by the assessee by producing necessary evidence. It was mentioned that the assessee is not required to explain the source of cash deposited by the company in its bank account as source of source cannot be examined, in view of the decision in the case of Daulat Ram Rawat Mull (supra). Having considered the facts of this case, we are of the view that those are distinguishable. The lender was a public limited company which was regularly assessed to tax. It was a case of loan which was returned during the same year. Such are not the facts here.
As against the aforesaid, the Id. DR relied on the decision in the case of CIT Vs. Anil Kumar (2007) 292 ITR 552 (Del). The question before the Hon’ble Court was- whether the Income-tax Appellate Tribunal was correct in law in upholding the order of CIT(Appeals), deleting the Rs. 20.00 lakh on account of gift alleged to have been received by the assessee? In this case, it was observed that the assessee received two gifts of Rs. 10.00 lakh each from NRF, accounts of two donors, Shri Vinod Kumar Ghai and Shri David Paramjit Gill. The AO mentioned that the assessee submitted gift deed, affidavit, pass-port and bank certificate relating to the gifts. On these facts, it was held that the assessee could not discharge the onus of proving the creditworthiness of the donors. 1 he Id. CIT(A) held the gifts to be genuine and the Tribunal confirmed the order of the Id. CIT(A). The Hon’ble Court considered the decision in the case of CIT Vs. Mrs. Sunita Vachani (1990) 184 ITR 121 (Del), CIT Vs. R.S. Sibal (2004) 269 ITR 429 (Del) and Sajan Dass & Sons (2003) 264 ITR 435 (Del). The following observations from the decision in the case of R.S. Sibal (supra) were reproduced :- “There is no quarrel with the preposition that 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 and since the claim of a gift is made by the assessee the onus lies on him not only to establish the identity of the donor but his capacity to make such a gift. But, in the instant case, we find that though the assessee had admittedly produced the bank statements, the Assessing Officer did not raise any query with regard to the capacity of the donors to make the gift. From the assessment order, we find that the only ground on which the genuineness of the gifts has been doubted is the alleged failure on the part of the assessee to establish relationship between the donor and the donee.” 9.1 Further, the following observations from the decision in the case of Sajan Dass & Sons (supra) were also reproduced:- “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 assessee, the 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 Assessing Officer from the bank, with which the assessee was admittedly confronted and bearing in mind the fact that admittedly said Subhash Sethi was not related to the assessee, 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 assessee to prove the gift.” 9.2 The Court mentioned that mere identification of donor and showing the movement of gift amount through bank channels are not sufficient to prove the genuineness of the gift. It was further mentioned that since claim of gift is made by the assessee, the onus lies on him not only to establish the identity of the person making the gift but also his capacity to make such a gift. It was also mentioned that there was nothing on the record to show as to what was the financial capacity of the donors, what kind of relationship the donors had with the assessee, what are the sources of funds gifted to the assessee and whether they had the capacity of giving large amount of gifts to the assessee. It was held that since the assessee did not prove the genuineness of the transaction, nor he established the identity of the donor nor the capacity of the donor to make gift, as such the Income-tax Appellate Tribunal was wrong in deleting the addition. We find that the revenue has relied in respect of a credit in the bank account allegedly arising out of a gift and not a loan. There is a difference between a loan and a gift. The loan has to be returned and after its return, the assessee is no longer richer by any amount on account of this transaction. If the loan is with a stipulation of interest, he is poorer after payment of the amount and the interest. On the other hand, a gift straightway leads to enrichment of the donee by the amount of the gift. In view thereof, the onus in respect of a gift is somewhat stricter than the onus in case of a loan. That is why, the Hon’ble Court view the issue of onus in the case of gift more strictly. Coming to the facts, the assessee has been able to establish the identity of the donor. The facts are distinguishable only to this extent. 9.3 We may now examine the evidence filed in support of the gift. The primary evidence is the confirmation letter, the statement of the donor and her bank account. It is seen that the gift deed is written in English although the donor is an illiterate person as it carries her thumb impression. It is not clear whether the contents of the confirmation letter were understood by her. She is also not assessed to tax, either income- tax or wealth-tax. Therefore, the confirmation letter, by itself, does not establish the capacity to make the gift and genuineness of the transaction. 9.4 In the statement, recorded on oath on 23.8.2007, the donor deposed to the effect that she has three sons and three daughters. Her husband was a kirana merchant who left only a house. The acquisition of gold was deposed to be gift from parents and in-laws at the time of marriage. There is no evidence about such acquisition except the statement. There is also no averment about the financial position of the parents and parents-in-law. The donor or her husband did not have any bank account. The donor is also not aware about the weight of the gold ornaments held by her. These ornaments were statedly buried under the ground. The donor is not aware to whom the ornaments were sold as the ornaments were given to the assessee for the purpose of sale. The bank account was stated to have been opened through the husband of the donee and a son, Shri Vinod Kumar Gupta. The donor had been staying with the son, Shri Vinod Kumar Gupta. The whole of the sale proceeds from the ornaments were gifted to the daughter and nothing was given to any of the other five children. It was also deposed that the house at Sanjay Nagar has been willed to Shri Vinod Kumar Gupta. This statement has been recorded in Hindi and has been read out to her before Shri Rakesh Kumar, the husband of the donee. When we look at the statement from the point of view of a person of ordinary prudence, many anomalies can be seen. In the first place, no evidence is narrated to show that the ornaments were received at the time of marriage. The assessee has not brought on record the financial capacity of the parent or parents-in-law to show that they could have gifted huge amount of gold ornaments, weighing about 1934 grams to her at the time of marriage. All the ornaments were gifted to only one daughter to the exclusion of all other children, which is not the conduct of a normal human being. She is not aware of about the weight of the gold ornaments or the amount of sale proceeds. These ornaments were given to the daughter for the purpose of sale and thereafter the sale proceeds were gifted to her. It also transpires that for a substantial period of time, the ornaments remained buried under the ground. Normally any lady in a Indian house hold will keep some ornaments with her also for daily wear as well as for ceremonial occasion. Therefore, we are of the view that the statement is not credible enough to be acted upon. The bank account of the donee has also been filed, which has been opened primarily for putting through the transaction of crediting the sale proceeds and issuing cheque as gift. Mere movement of money through banking channels does not establish genuineness of the gift as the financial capacity as well as genuineness of the transaction do not stand established by confirmation letter and the statement. 9.5 There is also evidence from Brijwasi Jewellers regarding purchase of jewellery and debit in their account showing payment of purchase consideration. It is seen that the jeweler has mentioned the total weight of the ornaments. Item-wise details have not been furnished. As we shall see later that such details have been held out to be available with the donor. The peculiar fact is that before issuing demand draft of Rs. 10,07,749/- in favour of the donor, a sum of Rs. 10.00 lakh was deposited in this account by way of cash. It is no doubt true that the Brijwasi Jewellers, who are otherwise regular dealers in jewellery, the fact also remains that this evidence is on record, which shows an anomalous circumstance as to why such a reputed jewelers should deposit money in cash of more or less the same amount as the value of the demand draft purchased for payment to the person who brought jewellery for sale. Another peculiar fact is that although the donor and the donee reside in Ghaziabad, the jewellery was sold to Brijwasi Jewellers located in Delhi. 9.6 There is also evidence by way of two valuation reports prepared by Shri Vijender Kumar Jain, the government approved valuer. Both these reports are stated to be prepared for the purpose of wealth-tax. The anomalous situation in this case is that the donor was neither an income-tax payee nor the wealth-tax payee. Therefore, the purpose is obviously incorrectly mentioned. The other mistake pointed out by the AO mentioning her to be wife of late Shri Kedar Nath when the husband was in fact alive, may be a genuine error or an assumption made by the valuer looking to the age of the donor, who may not have gone personally to him with the jewellery for its valuation. Of course, it is also surprising that the jewellery was dug out on two occasions for valuation for wealth-tax purposes, being a non-existent purpose. 9.7 Thus, when we read the evidence, we find anomalies in each piece of evidence and, therefore, it does not evoke confidence about either the capacity of the donor or the genuineness of the transaction. A person of normal prudence in such circumstances will come to the conclusion that the gift is a devise to show the availability of money in the hands of the assessee for the purpose of investment in the plot of land. It is held accordingly.
Having decided that the explanation of the assessee is not satisfactory, the question still remains whether the In this connection, we may refer to the decision of Hon’ble Supreme Court in the case of Smt. P.K. Noorjahan (supra). In that case, the assesses was in no position to earn the amount sought to be taxed in her hand in that year or even in a decade as she had hardly any source of income. In this case, the facts are different. The assessee is * deriving income as a partner of M/s Mansa Devi Brick Field. She has also derived income by way of long-term capital gains from sale of an immovable property and from other sources. Therefore, she is in a position to earn money, which has been invested in the land. The correction in mentioning the section from 68 to 69 has also been rightly done by the Id. CIT(A) who is competent to do so and which can be done by us also. Accordingly, it is held that the lower authorities were right in bringing the aforesaid amount to tax in the hands of the assessee.”
5.4 The learned Authorized Representative cited the judgment of Hon’ble Allahabad High Court, Lucknow Bench, Lucknow in the case of Commissioner of Income Tax –I, Lucknow Vs. Rajkumar Aggarwal (supra), but facts of that case are different from the facts of the assessee. In that case the assessee received loan from a limited company whereas in present case gift has been received from an individual. The Tribunal in the case of assessee for preceding year, has also distinguished the facts of the case of Commissioner of Income Tax Vs. Raj Kumar Aggarwal (supra) in para 8.4 of the order. As the facts and circumstances of the year under consideration being identical to the facts and circumstances in the immediately preceding year, following the decision of the Tribunal (supra), the gift of Rs. 4,08,000/- received during the year from the mother of the assessee is held as non-genuine. Accordingly, the ground of the appeal is dismissed.
In ground No. 3, the assessee has claimed that the addition was not called for in the assessment year 2006-07. 6.1 The learned Authorized Representative of the assessee submitted that sale of jewellery in question by her mother was made in financial year corresponding to the assessment year 2005-06 and the money was also received in the hands of assessee’s mother in March 2005 i.e. in the financial year corresponding to the assessment year 2005-06 and, therefore, no addition could have been made in the case of the assessee in the year under consideration. 6.2 On the contrary, the learned Senior Departmental Representative submitted that gift was received in the year under construction and the amount of gift was also received and credited in the bank account of the assessee in the year under consideration only and, therefore, the addition has been validly made by the Assessing Officer in the year under consideration and upheld by the learned Commissioner of Income-tax (Appeals). 6.3 We have heard the rival submissions and perused the material on record. The fact that gift of Rs. 4,08,000/- was issued by Smt Angoori Devi, mother of the assessee through banker’s cheque dated 02/04/2005, is not disputed by both the parties. Thus, according to the date of issue of banker’s cheque, the gift has been issued by the donor and received by the assessee in the year under consideration. In that situation, Assessing Officer has rightly made the addition in the year under consideration. The learned Commissioner of Income-tax (Appeals) has decided the issue as under:
“6.3 Ground of appeal no. 3: This is additional ground vide which the appellant has tried to argue that if money of Rs. 4,08,000/- was unexplained and unaccounted money, and the same was shown to come into the hands of assessee’s mother in March 2005 i.e. in the F.Y. 2004-05; and hence the same was assessable in the hands of the' assessee, if at all, in A. Y. 2005-06 itself. The appellant’s views are not acceptable as it is against the legal revisions. It is true that the department has taken a view that the entire explanation of sale of jewellery by the assessee’s mother was a concocted storey. However, the basic and vital fact remains that the said fund has come into bank account of the assessee: in form of gift given by her mother, vide cheque dated 02.04.2005; cleared and credited into bank account of the assessee on 05.04.2005. The provision of deeming section 68, 69 and others clearly laid down that any such unexplained credit would be deemed as income from undisclosed source of the assessee and also that the date of such unexplained credit or such unexplained investment would determine F.Y. (and therefore, assessment year) for which such income is to be assessed. Considering the special and specific provision of these deeming Sections; there remains no doubt that in the present case, the unexplained investment of Rs. 4,08,000/- made in the bank account of the assessee will be assessed in the hands of appellant for F.Y. 2005-06 since the relevant dates of investment are 02.04.2005 and 05.04.2005.
Thus, ground of appeal no. 3 is rejected.” 6.4 In view of above discussion, we do not find any infirmity in the findings of learned Commissioner of Income-tax (Appeals) on the issue in dispute, and accordingly we uphold the same. The ground of the appeal is dismissed.
7. In the result, the appeal of the assessee is dismissed.
The decision is pronounced in the open court on 27th July, 2016.