SMT PREKSHA KEDIA,KOLKATA vs. ITO, WD-24(4), KOLKATA, KOLKATA

The assessee in the present case is an individual, who filed her return of income for the year under consideration on 03.08.2007 declaring total income of Rs.70,305/-. During the course of assessment proceedings, the claim of the assessee of having received gifts of Rs.9,99,743/- in the form of jewellery, cheques and cash on the occasion of her marriage held on 16.04.2006 was examined by the Assessing ./2016 Assessment year: 2007-2008 Page 2 of 5 Officer. On such examination, the Assessing Officer held that the gift of Rs.1,00,000/- claimed to be received by the assessee by cheque from her father-in-law Shri Gopal Kedia was not satisfactorily explained for the following reasons:- “1. Declaration was made on stamp paper of Rs.10/-. It was signed by the donor, Sri Gopal Kedia and notarized by Sri Dilip Kumar Basu, Notary to the Government of West Bengal, Regd. No. 29617 on the same date, i.e. 26.02.2007 but the date of issue of the stamp paper was recorded on its reverse as 12.03.2007.

As regards the gifts received in cash from 77 different persons aggregating to Rs.5,24,831/-, the Assessing Officer deputed his Inspector to contact the said persons in order to verify the claim of the assessee. As reported by the Inspector to the Assessing Officer, none of the said persons chosen by him for the purpose of verification could be traced out at the given addresses. The Assessing Officer, therefore, required the assessee to produce those persons before him for verification, but the assessee failed to produce them. The Assessing Officer, therefore, treated even the entire cash gift amount of Rs.5,24,831/- as unexplained and the total addition of Rs.6,24,831/- was made by him to the total income of the assessee on account of unexplained/unproved marriage gifts in the assessment completed under section 143(3) vide an order dated 30.12.2009.

Against the order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) and since the submissions made by the assessee in support of her case on the issue of marriage gifts was not found satisfactory by him, the ld. CIT(Appeals) proceeded to confirm the addition of ./2016 Assessment year: 2007-2008 Page 3 of 5 Rs.6,24,831/- made by the Assessing Officer for the following reasons given in paragraph no. 6 of his impugned order:- “I have considered the facts of the case. Out of the total claim of Rs.9,99,743/- as gifts received, the Assessing officer had found that the genuineness of claim for Rs.6,24,831/- could not be verified and had added back the same to the income. I find that the Assessing Officer had pointed out defects in the notarized stamp paper itself which is no way has been countered by the appellant. Similarly, the Assessing officer had given an opportunity to produce the donors before him in support of his claim as they were not found at the addresses furnished by the assessee. The assessee did not avail of the opportunity. Under the circumstances, I decline to interfere with the action of the Assessing Officer. The addition of Rs.6,24,831/- is confirmed”.

I have heard the arguments of both the sides and also perused the relevant material available on record. As regards the gift of Rs.1,00,000/- claimed to be received by the assessee from her father-in-law Shri Gopal Kedia by cheque, it is observed that the genuineness of the same has not been accepted by the Assessing Officer for two reasons. Firstly, he found that the declaration of gift made by the donor on 26.02.2007 was on the stamp paper issued on 12.03.2007. In this regard, the ld. counsel for the assessee has explained that since the cheque for marriage gift was given by Shri Gopal Kedia on 26.02.2007, the declaration of gift made subsequently after the issuance of the stamp paper was given the same date on 26.02.2007. In my opinion, this explanation offered by the ld. counsel for the assessee is a plausible one and it cannot be said merely on the basis of date of the issue of stamp paper itself that the declaration given by the donor is fraudulent. As regards the other objection raised by the Assessing Officer that the credit for the sum of Rs.1,00,000/- claimed to be received by the assessee as marriage gift by cheque from Shri Gopal Kedia was not found in her Bank account, the ld. counsel for the assessee ./2016 Assessment year: 2007-2008 Page 4 of 5 has filed copy of the Bank account of the assessee with HDFC Bank, which shows the credit of Rs.1,00,000/- on 01.03.2007. In my opinion, this aspect requires verification by the Assessing Officer in view of specific contrary finding recorded by him in the assessment order. I, therefore, restore this issue to the file of the Assessing Officer for the limited purpose of verifying the relevant credit in the Bank account of the assessee for the amount of gift in question and allow appropriate relief to the assessee on the basis of such verification.

As regards the cash gifts claimed to be received by the assessee from 77 different persons on the occasion of marriage, the ld. counsel for the assessee has placed on record before the Assessing Officer the details of such gifts including the name and address of the donors, their relationship with the assessee and Permanent Account Numbers. As submitted by him, even though the Assessing Officer relied on the report of the Inspector to doubt the genuineness of the said gifts, it is not made clear by the Inspector as to who were the parties chosen by him for verification and what exactly was the outcome of the enquiry made by him with them. As further submitted by him, the practice of giving cash gifts on the occasion of marriage by the friends and relatives is common in the Indian Society and the Assessing Officer was not justified in not taking into consideration the said practice while treating the entire amount of gifts received from 77 different persons as unproved/unexplained. The ld. D.R., on the other hand, has contended that the assessee failed to produce the concerned donors for verification before the Assessing Officer despite specific opportunity given in this regard. It is noted in this regard that the assessee atleast could have produced confirmations of some of the concerned donors, especially when other details, such as names and addresses of the donors as well as their Permanent Account Numbers, were furnished by her on record to discharge the primary onus and the Assessing Officer could have verified the claim of the assessee on the basis of such confirmations. Keeping in view all these facts of the case, I am of the view that the matter should go ./2016 Assessment year: 2007-2008 Page 5 of 5 back to the Assessing Officer for deciding the same afresh after giving the assessee one more opportunity of proving the genuineness of the cash gift by filing some confirmations. While deciding the issue, the Assessing Officer shall take into consideration the common practice or custom prevailing in the Indian Society to give cash gifts to the bride and groom on the occasion of marriage and consider the claim of the assessee about the reasonableness of such gifts depending on the status of the family in the Society. I accordingly set aside the impugned order of the ld. CIT(Appeals) on this issue and restore the matter to the file of the Assessing Officer for deciding the same afresh.

In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on March 17, 2017.