Case Law Details
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
RELEVANT PARAGRAPH
Brief facts of the case are that the assessee received a gift of Rs.30,00,000/- from Mrs. Chandra Hingorani. The genuineness of the gift was examined by the Assessing Officer by considering the various documents including taking statements of the assessee which was recorded on 19.12.2006.
The AO noticed that the assessee is not remotely connected with the family of the donor. She has no knowledge about the family of the donor, she never visited their house. She never attended any social function or normal get together with the family of the donor. She was never invited by the donor family and the same was the case with the assessee as the donor family had no link whatsoever with the assessee. It has also being noted by the Assessing Officer that Mrs. Chandra Hingorani, the alleged donor was required to be produced. Instead of attending she preferred to file letter at the receipt counter on 29.11.2006. The details filed along with the said letter by Mrs. Chandra Hingorani before the AO. The observation of the Assessing Officer thereon noted by the Assessing Officer’s in his order reads as under: –
“Thereby filing the details of her I.T. Returns where the gifts had been disclosed. The donor pleaded that due to her old age she could not travel. It is relevant to mention here that as per copy of the I.T. Return filed, she has declared that she is proprietor of M/s. International Export Corporation and the sales were declared at Rs.20,75,000/-. These facts coupled with the facts that the donor has declared the income of about Rs.64 lakhs from interest, dividend and gains on sales of investment (Rs.48.67 lakhs) conclusively proves that the donor was simply avoiding to attend the proceedings to avoid the truth to come out. A person running a business, making sales of Rs.20 lakhs and earning other income of Rs.64 lakhs cannot claim exemption on the ground of old age specially when she is living in Bandra (West) and the Income-tax office is located at Bandra (East). It is relevant to mention here that Mrs. Chandra Hingorani is not in any way connected to the assessee or to her family. There was no occasion for such huge gifts to the assessee. The donor has simply made lame excuse not to attend proceedings. The apparent is that only fake documents of gift were prepared on consideration and, the donor and the donee is avoiding the truth to come out and are accordingly avoiding the presence. I have, therefore, no alternative but to conclude that this is a case of bogus gifts and the assessee has introduced her concealed income in the form of alleged gift from any unknown lady, who is not in any way connected with the assessee and who is also now avoiding to attend the Income-tax proceedings to avoid the truth to come out. Accordingly, the amount of gift of Rs.30,00,000/- is added to the income of the assessee as undisclosed income of the assessee and penalty proceedings for concealment of income are initiated separately.”
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