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Judgment
Adarsh Kumar Goel, J.
1.The assessee has preferred this appeal u/s 260A of the Income Tax Act, 1961 (for short, ""the Act"") against the order of Tribunal, Delhi Bench
D"" Delhi dated 24-10-2008 passed in ITA No. 4723/Del/2007 for the assessment year 2003-04, proposing to raise following substantial
question of law:
That the Tribunal was not justified in concurring with the findings of the authorities below in treating the genuinely given gifts duly affirmed by way of
affidavits, gift deeds, independent confirmations by the donors to the assessing officer of the appellant and by filling copies of their respective bank
accounts thus fulfilling all the three ingredients of a genuine gift of establishing the identity, creditworthiness and genuineness of a transaction, so that
so the orders of the Tribunal is bad in law and perverse and thus needs to be quashed.
The assessee claimed certain gifts but the assessing officer made addition to the declared income by treating the alleged gifts to be income from
undisclosed sources. The said additions were confirmed on appeal by the Commissioner (Appeals) as well by the Tribunal.
We have heard learned Counsel for the appellant.
Learned Counsel for the appellant submitted that the donors had given affidavits and the gift deeds were also produced. The assessing officer
obtained report from Mr. R.S. Bura, assessing officer, Rohtak, where the donors disowned the making of the gifts. Contention raised on behalf of
the appellant is that the assessee should have been allowed opportunity to cross-examine the donors.
Before we proceed to deal with the submission, it will be appropriate to refer to the finding recorded by the Tribunal, which is as under:
It is a settled law that in case of a gift as in the cash creditors the onus is on the assessee to prove the identity, the genuineness of the transaction
and creditworthiness of the donors. In the case before us, the assessee had only discharged the onus relating to identity of the donors. The onus of
proving the creditworthiness of donors and the genuineness of the transactions had not been discharged. The learned Authorised Representative of
the assessee has sought annulment of the order on the ground that the assessee was not allowed to confront the donors. We are unable to agree
with the submissions made by the learned Authorised Representative of the assessee. Whatever material the assessing officer had gathered was put
to the assessee to comment. Therefore, the statements of the donors denied to have made any gift had not been utilized against the assessee
without affording the opportunity of the assessee. In fact in this case the assessee had not discharged initial onus to produce the necessary evidence
to support the genuineness of the transactions. The donors in their statements had denied to have given any gifts to Smt. Kusum Lata Thakral, the
assessee. They have denied even the acquaintance with the assessee. They have also denied to have made the deposit of cash in their accounts and
issue of drafts for the purpose of gifts. The learned Authorised Representative of the assessee has stated that the gifts received by the assessee are
supported by the gift deeds, their affidavits and confirmations filed by donors in response to summons issued u/s 131 of the Act. We have gone
through the gift deeds and affidavits. In case of gift deed alleged to have been signed by, Smt. Neelam Arora, we find that the same is not signed
by the donors, though it has been attested by Notary Public, Delhi, on 5-12-2002. The gift deed is not witnessed by any person. The gift deed of
Smt. Kiran Rani is also not witnessed by any person. Likewise, in the case of Smt. Bhirawa Bai, the gift deed is not witnessed. There is an
interesting point to be noted in case of gift deed of Smt. Kiran Rani that the said gift deed has been executed on 30-10-2002 and 5-12-2002.
Similar is the position in respect of gift deed between Smt. Bhirawan Bai, which has been executed on these two dates. These two persons,
according to the assessee, have made two gifts on 30th October as well as on 5th December. It is not understood as to how a gift deed can be
executed on two different dates. From the above it is clear that all three gift deeds are defective and cannot be taken into consideration. Thus, the
assessee has not discharged the initial onus even in respect of genuineness of transaction as the gift deeds are defective. The donors have also
denied having any relationship or acquaintances with donee; even they do not know her. They have also denied to have given any gifts. Therefore,
the genuineness of the transaction is not proved. The assessee has also not discharged the onus of proving the creditworthiness of the donors.
When the donors have denied to have given any gifts it has to be logically concluded that it was the assessee''s own money, which was routed
through the mode of alleged gifts through the accounts of the persons, who were not aware about the deposit of money in their accounts and
purchase of bank drafts in favour of the assessee.
Hon''ble jurisdictional High Court in the case of Tirath Ram Gupta Vs. Commissioner of Income Tax, has held that a gift is generally given out
of natural love and affection without any consideration, which necessarily denotes the closeness between the donor and the donee. It can be given
either on some occasion or to help a relative or friend. To see the genuineness of a gift, the test of human probability is the most appropriate. A gift
cannot be accepted as such to be genuine merely because the amount has come by way of a cheque or draft through banking channels unless the
identity of the donor, his creditworthiness, relationship with the donee; and the occasion is proved. Unless the'' recipient proves the genuineness,
the same can be very well treated an accommodation entry of the assessee''s own money, which is not disclosed for the purpose of taxation.
If the facts of the case are tested on the touchstone of the ratio of the decision of Hon''ble Punjab & Haryana High Court in the case of Tirath
Ram Gupta v. CIT (supra) we find that there is no relationship between the alleged donors and the assessee. The donors do not know the donee.
Therefore, the element of natural love and affection is missing. When there is no relationship between the donor and the donee and the donors in
their statements recorded on oath u/s 131 have refused to have given any gift and, therefore, the genuineness of the transaction is not proved. The
logical conclusion is that the assessee got her unaccounted money routed through the account of the alleged donors by way of cash deposits and
issue of drafts for alleged gifts. Therefore, the alleged gifts have to be treated as undisclosed money of the assessee brought in the books of
accounts. Even in the cases where donors have confirmed to have given gifts the Courts are applying the principle of human probabilities as held by
Hon''ble Supreme Court in the case of Sumati Dayal Vs. Commissioner of Income Tax Bangalore, . The reliance placed by learned Authorised
Representative of the assessee on various decision is of no relevance having regards the facts of the case before us. Accordingly, we do not find
any infirmity in the order passed by the learned Commissioner (Appeals) confirming the addition of Rs. 10,00,000 as undisclosed income of the
assessee.
It is clear from the above finding that there was no relationship between the donors and the assessee and there was no natural love and affection.
The Tribunal has followed the judgment of this Court in Tirath Ram Gupta Vs. Commissioner of Income Tax, , laying down that in absence of
natural love and affection, the gift could not be accepted as genuine.
The above being undisputed position, mere fact that the assessee produced the confirmations of the gift deeds and the assessee was not allowed
opportunity to cross-examine the donors, who disowned the making of the gifts, they will not be in any manner affected.
Learned Counsel for the appellant also relies upon the following judgments:
(i) The Commissioner of Income Tax, Bihar and Orissa, Patna Vs. S.P. Jain, ;
(ii) Additional Commissioner of Income Tax Vs. Hanuman Agarwal, ;
(iii) Commissioner of Income Tax, Delhi (Central-2) Vs. Mrs. Sunita Vachani, ;
(iv) CIT v. Sanjeev Kumar Jain (2009) 20 DTR (P&H) 225;
(v) CIT v. Rajesh Kumar (2008) 12 DTR (Del) 176;
(vi) Commissioner of Income Tax Vs. Sham Lal, ;
(vii) Commissioner of Income Tax Vs. Dharam Pal Prem Chand Ltd., ;
(viii) C.B. Gautam Vs. Union of India and Others, ;
(ix) Heirs & LRs of Late Laxmanbhai S. Patel v. CIT (2008) 12 DTR (Guj)108;
(x) Commissioner of Income Tax Vs. Ms. Monica Oswal, Jawahar Lal Oswal and Miss Ruchika Oswal, ;
(xi) Roopchand Manoj Kumar Vs. Commissioner of Income Tax, .
However, he wishes the court to deal with the judgment in Sanjeev Kumar Jain''s case (supra).
In the said judgment, the assessing officer had recorded statements of some persons to whose accounts the assessee had made credit entries
but they were (not) allowed to be cross-examined. This Court held that in absence of cross-examination, the order of assessment was vitiated. In
para 9 of the judgment, it was observed as under:
We find merit in the aforesaid submission of the learned Counsel for the appellant. The assessing officer had failed to afford an opportunity to the
respondent assessee to cross-examine the persons whose statements were recorded by him, before passing the assessment order u/s 143/147 of
the Income Tax Act, 1961, on 31-.3-2004. The action of the assessing officer was unacceptable in law. Naturally, there was nothing wrong upto
the stage of recording the statements of the 4 persons referred to ""above. The proceedings conducted by the assessing officer after recording the
statements of aforesaid individuals, are liable to be set aside. The same alone are, therefore, set aside. It will be open to the assessing officer to re-
initiate the proceedings from the aforesaid stage if he is still of the same opinion. In the aforesaid eventuality, any further action taken by the
assessing officer would inevitably require him to allow the respondent assessee to cross-examine all the four witnesses whose statements were the
basis of the earlier consideration. Thereafter, it will be open to the assessing officer to pass a fresh order in accordance with law. We would also
like to clarify that the instant liberty granted to the assessing officer, to redetermine the issue would not enable him to collect any further information,
besides the material already available with him (while passing the order dated 31-3-2004), for the purpose under reference.
We do not find any relevance of the judgment relied upon. The said judgment was not of gift but of relying upon certain statements at the back
of the assessee, which was against the natural justice. The question whether denial of opportunity of cross-examination results in violation of natural
justice depends upon facts of each case. The object of cross-examination is to test the veracity of the version given in examination in chief. In the
present case, even if cross-examination was allowed and the donors who had disowned the making of gifts, were confronted and shown to be
factually wrong, the same would have made no difference, as there was no natural love and affection and in its absence, the gifts were not genuine.
In view of above, no substantial question of law arises. The appeal is dismissed.