Guneet Kaur Chadha, vs Department Of Income Tax

Dy. Commissioner of Vs. Smt. Guneet Kaur Chadha, Income-tax, Circle 20(1), 55, Gulabi Bagh, Delhi New Delhi (PAN:ACWPC9064A) (Appellant) (Respondent)

Appellant by : Sh. T. Vasanthan, Sr. DR Respondent by: Sh. Tarandeep Singh, FCA

Date of hearing: 17.03.2015 Date of pronouncement: 18.03.2015

ORDER

PER R.S. SYAL, A.M.:

This appeal by the Revenue is directed against the order passed by the

CIT(A) on 17.01.2007 in relation to the assessment year 2003-04.

2. The only issue raised in this appeal is against the deletion of addition

amounting to Rs.17.00 lac made by the Assessing Officer under Section 68 of

the Income-tax Act, 1961 (hereinafter referred to as "the Act").

3. Briefly stated the facts of the case are that the assessee received three gifts

totaling Rs. 17 lacs as under:

Name of the donor Date of gift Amount 1. Sh. Manmeet Pal Singh 29.08.2002 Rs. 8 lacs 2. Sh. Harminder Singh 20.06.2002 Rs. 7 lacs 3. Sh. Parveen Kumar 17.05.2002 Rs. 2 lacs 2 ITA No. 2280/Del /2007 AY: 2003-04

4. On being called upon to substantiate the genuineness of these credits, the

assessee stated that the above amounts represented gifts from different donors,

the first two being, Non-Resident Indians and the third one being, an Indian. In

support of the genuineness of the gifts from each of the NRI donors, the assessee

filed the following documents:

a) The copy of the gift deed and the acceptance of the gift by the assessee.

b) The copy of the affidavit from the donor.

c) The copy of the gift cheque from the donor.

d) The bank certificate regarding the receipt of funds from NRE Account.

5. With regard to gift from Sh. Parveen Kumar, the assessee furnished the

following documents:

a) The copy of the gift deed and the acceptance of the gift by the assessee.

b) The copy of the affidavit from the donor.

c) The copy of the PAN

d) The copy of ration card.

e) The copy of I.T. and W.T. return.

6. The assessee was called to produce the third donor, namely, Sh. Parveen

Kumar who was Indian resident. The assessee expressed her inability to produce

Sh. Parveen Kumar. Thereafter, summons under Section 131 of the Act was

issued in the name of Sh. Parveen Kumar for personal appearance. The

Assessing Officer also deputed Inspector to serve the summons who reported on

06.01.2006 that there was no such person at the given address. The assessee was

confronted with the report of the Inspector by order-sheet entry dated

17.01.2006 and was requested to establish the identity of the donor. The

assessee vide her letter dated 20.01.2006, submitted a copy of ration card in 3 ITA No. 2280/Del /2007 AY: 2003-04

which names of all the family members of Sh. Parveen Kumar were listed, a

copy of Permanent Account Number allotted by the Income Tax Department; a

copy of wealth tax return filed by Sh. Parveen Kumar; a copy of

acknowledgement of income tax return; a copy of gift deed; a copy of affidavit

by the donor duly attested by the Notary; and a copy of bank statement of the

assessee (wherein the gifted amount was deposited and ultimately credited to her

account). The Assessing Officer refused to accept the genuineness of the gift by

holding that the assessee failed to establish the identity of the donor inasmuch as

ration card and PAN can also be fraudulently obtained. As regards the other two

gifts received from non-resident donors, the Assessing Officer directly obtained

copy of their bank NRE accounts from the Citi Bank. On perusal of such bank

statements, it was noticed that Sh. Manmeet Pal Singh allegedly gifted a sum of

Rs. 8 lacs to the assessee on 29.08.2002 after getting a deposit of Rs. 16,51,192/-

in his bank account on 28.08.2002. Similarly, Sh. Harminder Singh's bank

account showed increase in balance by Rs. 17,07,300/- before making gift of Rs.

7 lacs to the assessee. The Assessing Officer recorded the statement of the

assessee on 24.01.2006 and observed that the assessee never gifted any amount

to these three donors and further the assessee never visited NRI donors at

Singapore. In the absence of any blood relation between the donors and the

assessee, the Assessing Officer made the addition of Rs. 15 lacs under Section 4 ITA No. 2280/Del /2007 AY: 2003-04

68 of the Act. The learned CIT(A), on appreciation of the evidence on record,

ordered for the deletion of the addition.

7. We have heard the rival submissions and perused the relevant material on

record. The assessee received the first gift of Rs. 2 lacs from Sh. Parveen

Kumar. In the course of her statement recorded by the Assessing Officer, it was

stated that Sh. Parveen Kumar is a close friend of her husband who gifted this

amount on the occasion of her marriage anniversary. As regards the Inspector's

report that Sh. Parveen Kumar was not traceable at the given address, we find

that the assessee furnished not only the copy of ration card but also of the PAN

card and other evidence divulging the correct address of Sh. Parveen Kumar

which was given to the Assessing Officer. There cannot be any reason to accept

the view point of the Assessing Officer that PAN and ration card can also be

fraudulently obtained. When the Inspector adversely reported about the non-

availability of Sh. Parveen Kumar on the given address, it was thereafter that the

assessee submitted a copy of ration card and PAN card evidencing the address of

Sh. Parveen Kumar in support of the correctness of address already given.

Without making any further investigation as to the veracity of the address given

in these documents, the Assessing Officer rejected the assessee's contention,

which course of action is untenable as per law. It is further evident that the

assessee furnished copy of income tax return and wealth tax return of this person

along with the affidavit from the donor, which have not been refuted by the 5 ITA No. 2280/Del /2007 AY: 2003-04

Assessing Officer. If the Assessing Officer was not satisfied with the

genuineness of the gift despite this overwhelming evidence proving prima facie

the genuineness of the gift, then he should have got the inquiry conducted from

the income tax file of Sh. Parveen Kumar for which all the relevant particulars

were available with him. In our considered opinion, learned CIT(A) was right in

accepting the assessee's contention about the genuineness of the gift received by

the assessee from Sh. Parveen Kumar.

8. As regards the gifts received from NRI donors, namely, Sh. Manmeet Pal

Singh and Sh. Harminder Singh, we find that the assessee categorically stated

before the Assessing Officer during the course of her statement that both these

persons are real brothers and their father Sh. Ajit Singh is very close friend of

her father-in-law, Sh. Gurucharan Singh. Both these persons were stated to be

family friends. Not only that, the assessee also gave personal particulars of these

donors by explaining the nature of business carried out by them and also the

names of their children. The assessee also submitted that the gifts were made by

these two persons on the occasion of birthday of her daughters. It is manifest

from the inquiry directly conducted by the Assessing Officer from Citi Bank that

huge amounts were deposited in their respective bank accounts before issuing

gift cheques for a much lesser amount. Citi bank further confirmed the

genuineness of the accounts maintained by these two non-residents with its

branch. These two persons were residing in Singapore for last more than 25 6 ITA No. 2280/Del /2007 AY: 2003-04

years. A copy of the bank NRI account of Sh. Harminder Singh for six months

period from 01.04.2002 to 30.09.2002 disclosed total deposits credited to his

account at Rs. 51.61 lac, out of which a sum of Rs. 7 lacs was gifted to the

assessee. During the same six months period, there were credits in the bank

NRI account of Sh. Manmeet Pal Singh to the tune of Rs. 31.60 lac, out of

which a sum of Rs. 8 lacs was gifted to the assessee. When we consider the

entirety of facts and circumstances obtaining in respect of these two donors, we

have no hesitation in holding that the assessee discharged her burden in not only

proving the identity of the donors, but also their capacity and genuineness of the

gift transactions.

9. We, therefore, approve the view taken by the learned CIT(A) in deleting the

addition of Rs. 17 lacs made by the Assessing Officer under Section 68 of the

Act.

10. In the result, the appeal is dismissed.

The decision is pronounced in the open court on 18th March, 2015.

Sd/- Sd/- (C.M. GARG) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 18th March, 2015. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi