Facts of the Case
A sum of Rs.7 lakhs, shown to have been received as gift from Shri Jamaluddin Sheik Fareed, was treated as unexplained cash credit in the hands of the assessee on the ground that the assessee has not furnished confirmation letter from the party. In fact, no gift deed copy was produced and details of mode of payment, origination bank and other bank account details were not furnished before the AO.
Contention of the Assessee
Assessee contended before the CIT(A) that the impugned sum was received as gift out of natural love and affection since he is the son of Shri Jamaluddin who hails from Bangalore. The assessee filed gift declaration before the CIT(A) wherein it was stated that the gift was absolutely irrevocable and out of natural love, respect and affection which he bears towards the donee.
However, no one appeared on behalf of the assessee before the Hon’ble ITAT.
Contention of the Revenue
The Ld. DR of Department relied on the orders of the lower authorities.
Held by CIT(A)
In the opinion of the Ld. CIT(A), the assessee has to prove the identity of the donor, his relationship and also occasion for making a gift, in the light of the decision of the Hon’ble Delhi High Court in the case of Sarjan Dass & Sons Vs. CIT (264 ITR 435) wherein the Court observed that mere identification of the donor and showing the movement of gift through banking channels is not sufficient to prove the genuineness of the gift; onus is on the assessee not only to establish the identity and capacity but it has to be proved that it was actually a gift from the donor out of natural love and affection. In the aforesaid case, the donor was not related to the assessee and therefore the Hon’ble High Court observed that in such cases mere transfer of funds would not be sufficient to prove that amount was actually gifted.
The ld. CIT(A) observed that even in this case there is absolutely no relationship between the donor and the donee. The gift deed was signed on a plan paper without authentication of any authority and nothing has been mentioned about the relationship inter se. He, therefore, confirmed the action of the AO.
Held by ITAT
ITAT held that as already pointed out by the ld. CIT(A), deed of gift is on a plain piece of paper which is not signed before witness and no relationship between donor and donee is mentioned and there was no occasion for giving the gift. The donor appears to be an ordinary worker who has gone abroad, leaving his motherland, only to eke out livelihood and, in such an event of the matter, it is difficult to accept that he had gifted his hard earned money to a third party without any occasion and without establishing any relationship between the two.
Thus the Hon’ble ITAT upheld the order passed by the Ld. CIT(A) without any interference.
Case laws relied upon by the CIT(A)
Hon’ble Delhi High Court in the case of Sarjan Dass & Sons Vs. CIT (264 ITR 435)