GUNVANTIBEN N.SHAH,MUMBAI vs. ACIT CEN CIR 17 & 28, MUMBAI

Despite service of notice through RPAD, none appeared on behalf of the assessee-appellant neither any adjournment letter has been filed hence, we proceed to decide the appeal ex-parte without the assessee on merits after hearing Ld. DR.

Brief facts are that, in the assessment order passed u/s 143(3) r.w.s. 153A, it was found that assessee had shown sum of Rs. 10 lakhs being gift received from one, Shri Gyachand C Jain. In respect of proving the genuineness of the ‘gift’, the assessee had furnished confirmation from the ‘donor’ with all the details and address and also giving the details of amount given in cheque. However, the AO noted that the relationship with the donor and the occasion on which the gift was received had not been submitted by the assessee. The AO required the assessee to produce the donor who was also issued summons u/s 131 directly by the AO asking him to appear personally. However, the said donor did not attend in person albeit filed a letter dated 05.03.2008 furnishing the relevant details of a gift given to the assessee and also his return of income. The AO from such details noted that the donor had shown smaller taxable income of Rs. 1,04,280/- and agriculture income of Rs. 50,25,755/- which cannot be substantiated in absence of any documentary evidences. Not only that, the same donor has also given gift of Rs. 1,10,00,000/- during the assessment year 2003-04 to 11 persons. Accordingly, after detailed discussions, he added the amount of gift as ‘income from other sources’. It appears that assessee did not file any appeal challenging the said addition. Now, penalty has been levied by the AO on the said amount of gift after detailed discussion.

Assessee’s main contention before the AO as well as CIT(A) in the course of the penalty proceedings had been that, the donor had been identified; he has filed his confirmation along with address; his copy of bank statement and income-tax return were also furnished, to prove the genuineness of the gift. So far as the assessee is concerned, the onus stood discharged. However, both the AO as well as CIT(A) have confirmed the said penalty.

After considering the relevant finding given in the impugned orders and arguments placed by the DR, we find that the primary ingredient of proving the nature and source of credit which here in this case is “gift” of Rs. 10 lakhs has been discharged/shown in the following manner :- (i) Confirmation letter of the donor giving particulars of address and the mode of the payment of “gift”; (ii) Bank statement of the donor from where the cheque was issued to the assessee; and (iii) Income-tax return for the impugned assessment order wherein the donor has shown agricultural income of Rs. 50.25 lakhs and income from other activities at Rs. 1.23 lakhs.