Case Law Details
Brief Facts
1. In AY 1994-15, the assessee (Sarita Aggarwal) had shown credit of Rs.2,60,000/- in the capital account under the narration Gift. The Assessing Officer disbelieved the claim and made an addition of the aforesaid amount to the income as declared, holding that the assessee was unable to establish genuineness of the gift. However, the assessee succeeded before the Commissioner of Income Tax (Appeals), who by order dated 27th February, 1998, deleted the addition after taking on record additional evidence. Revenue on appeal, has succeeded before Tribunal.
2. The assessee was specifically called upon to prove capacity of the donor and furnish evidence in support of genuineness of the gift. In response thereto, the assessee filed photocopy of the draft of Rs.2,60,000/- issued by the Standard Chartered Bank, Deira, Dubai. No other material or evidence was brought on record. The Assessing Officer held that the aforesaid evidence did not show and prove the financial status and capacity of the donor.
3. The Assessing Officer observed that as it was a case of cash credit, the onus was on the assessee to establish identity, capacity or creditworthiness of the donor and also the genuineness of the transaction. In cases of gift, the degree of proof was substantially higher. The donor and donee should have a close association with each other.
4. Assessee has succeeded in 1st appeal in CIT(A), and CIT(A) hold that records that Chhatrapalsinh Jadeja was working as a Regional Manager with Air India in Dubai and was maintaining an account with the Standard Chartered Bank, Dubai. Chhatrapalsinh Jadeja had purchased the demand draft and made the said gift to the assessee. He held that the Assessing Officer was not justified in holding that the assessee had not been able to establish identity the donor or his creditworthiness.
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