ANITA CHAUDHRY, J. — 1. Revenue is in appeal impugning the order dated 30.07.2003 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for brevity, 'the Tribunal') in ITA No. 112(ASR)/2002 and 193(ASR)/2002 relating to assessment year 1998-99.
2. The revenue had raised two substantial questions of law, pertaining to the order of the Tribunal regarding foreign gifts of Rs. 5,00,000/- and Rs. 9,58,759/-. It has been pointed that the question regarding the transaction of Rs. 5,00,000/- made by Pritam Singh in favour of the assessee was remanded by the Tribunal to the Assessing Officer and is pending before the CIT(A) and it does not survive in the present appeal.
3. On 12.5.2006 the instant appeal was admitted only to consider the second question of law, which reads as under:-
"Whether on the facts and in the circumstances of case, the Hon'ble ITAT was justified in law in accepting the genuineness of gifts at Rs. 9,58,759/- especially when there was no occasion to receive huge gifts from unrelated persons?"
4. In order to appreciate the controversy in its right perspective, the facts of the case are noticed.
5. Respondent-assessee, filed a return declaring an income of Rs. 304990/-. The assessee was called upon to explain about the following foreign remittances:
Amount
Rs. 1,82,835/-
Rs. 5,00,000/-
Rs. 3,93,924/-
Rs. 1,91,000/-
Rs. 1,91,000/-
Rs. 14,58,759/- |
Donors
Jagdish Vijh, USA
Pritam Singh, NRE A/c
Parmod Tandon, USA
Gurpreet Kaur, Pensylvania
Manpreet K. Sehdev, Jew Jersey.
Total |
6. The stand of the assessee was that all the donors were family friends and had come forward to help him to put a MRI Scan unit in India proposed to be run under the name and style of M/s Apollo Imaging & Diagnostics Centre Private Limited. The explanation rendered by the assessee was not accepted by the Assessing Officer. The Assessing Officer found that there was no occasion for the donors, who had no relations with the assessee, to part with such a hefty amount. Consequently, it was held that it was the money of the assessee and ordered it to be added to the income of the assessee.
6. The assessee filed an appeal before the Commissioner of Income Tax (Appeals), Jalandhar (to be referred hereinafter as, 'the CITA(A)'). Certain additional facts, as provided under Rule 46-A of the Income Tax Rules, 1962(for short, 'the Rules') were pleaded before the CIT(A) by the assessee to show the genuineness of the amounts received from the donors, on which the comments of the Assessing Officer were called.
7. Relating to the sum of Rs. 1,82,835/- received from Jagdish Vijh, the Assessing Officer gave its report dated 13.03.2002 that the donor did have good family relations with the donee and he was financially well and the amount was not big for the donor and the gift was through the banking channel. Consequently, the CIT(A), relying upon the report of Assessing Officer held this amount as genuine and ordered its deletion from the income of the assessee.
8. Likewise, in respect of gift of Rs. 1,91,000/- and Rs. 1,91,000/- received from Gurpreet Kaur and Manpreet K. Sahdev, the Assessing Officer in its report submitted that the factum of gift by both the donors stood proved, but doubted their capacity to gift. However, the CIT(A) taking into account that the amounts were received through proper banking channel coupled with the affidavits of the donors, it relied upon the bank statements and held these gifts as genuine and ordered its deletion from the income of the assessee.
9. Similarly, qua the gift received from Parmod Tandon of Rs. 3,93,924/-, the Assessing Officer in its report found the financial capacity of the donor, but noted that there was no relationship between the donor and the donee. The CIT(A) taking into account the fact that Parmod Tandon was a friend of Jagdish Vijh and on the asking of the later had gifted the amount to the assessee, it held that this gift was also genuine and the amount was ordered to be deleted.
10. Relating to the gift made by Pritam Singh, it was held that he was leading a retired life in India and had no close relationship with the assessee and the assessee himself was not aware about the antecedents of Pritam Singh. Consequently, the addition made by the Assessing Officer of Rs. 5,00,000/- received by the assessee was confirmed by the CIT(A) vide order dated 28.03.2002.
11. Dis-satisfied with the affirmation of the addition of Rs. 5,00,000/- and deletion of
Rs. 9,58,759/- (1,91,00/- + Rs.1,91,000/- + Rs. 3,93,924/- + 1,82,835/-), the assessee and revenue filed separate appeals before the Tribunal. The Tribunal dismissed the appeal of the revenue and confirmed the deletion of the amount of Rs. 9,58,759/- while partly allowing the appeal of the assessee and remanded the matter to the Assessing Officer to decide afresh about the capacity and credit worthiness of transaction of Rs. 5,00,000/- made by Pritam Singh in favour of the assessee. The Tribunal also directed the assessee to produce Pritam Singh before the Assessing Officer. This appeal is by the revenue.
12. As noticed above, the issue regarding genuineness of transaction of Rs. 5,00,000/- is pending before CIT(A), therefore, the same is not being taken here for adjudication.
13. The only dispute remains is with regard to deletion of Rs. 9,58,759/- (1,91,00/- +
Rs. 1,91,000/- + Rs. 3,93,924/- + 1,82,835/-) received by the assessee from Gurpreet Kaur, Manpreet K. Sahdev, Parmod Tandon and Jagdish Vijh respectively.
14. Undisputedly, from the record, it is clearly evident that the assessee was not having blood relations with any of the donors. The plea taken by the assessee was that they were his family friends and had come forward to help him to set up a MRI Scan Centre. It was found that there was no occasion to make the gifts either by close relations or strangers. Dr. Jagjit Singh, father of donors Gurpreet Kaur and Manpreet K. Sahdev admitted that he had received cash gift from his daughters. It was found unbelievable that instead of giving any gift or monetary help to some charitable organization, a large number of strangers had chosen the assessee to make alleged cash gift running in lacs of rupees. Though, in the report of Assessing Officer submitted on the basis of additional facts and evidence produced by the assessee, the transactions in dispute were not doubted, but the fact remains that the donee was not having blood relations with the donors.
15. The issue regarding the receipt of amount by the assessee purported to be foreign gift from a person residing abroad where there is no relationship had invited the attention of this Court on numerous occasions and this issue is no longer res integra.
16. In ITA No. 12 of 2000, titled as The Commissioner of Income Tax, Jalandhar Vs.
M/s Udham Singh & Sons, Goraya, decided on 20.12.2013, this Court while dealing with a situation where a gift was received by the assessee from a non-resident Indian with whom the assessee had no relationship had relied upon various decisions rendered on the issue and had held as under:-
"9. The matter of receipt of foreign gifts even earlier had engaged attention of the courts. This Court in Lal Chand Kalra Versus CIT (1981) 22 CTR 135 had held that NRI gift from a stranger was neither genuine nor valid. This judgment was followed in Jaspal Singh Versus CIT (ITA No.256 of 2006) decided on 15.9.2006 by this Court as also judgment in Sajan Dass and Sons Versus CIT (2003) 264 ITR 435 by Hon'ble Delhi High Court. Recently, this Court in ITA No.498 of 2005 decided on 7.2.2011 titled Commissioner of Income Tax, Karnal Versus Puneet Singh had taken the same view holding as under:
"We are of the view that the Assessing Officer and the CIT (A) were justified in holding that the gift in question was bogus and the Tribunal committed patent error in accepting the gift as genuine. Admittedly, the donor had no relationship with the assessee. He had no occasion to give the gift. He was not produced. His financial capacity was not established. His bank statement was not produced. The Tribunal failed to appreciate these facts. It, thus, committed patent error of law in holding that the assessee discharged onus on him to prove the genuineness of the gift. Its order is, thus, perverse. In identical situation, this Court held that NRI gift could not be accepted as genuine unless the assessee was able to prove natural love and affection and financial capacity of the donor. Observations of this Court in Jaspal Singh are:-
"It is well settled that mere identification of donor and showing the movement of gift amount through banking channel is not enough to prove genuineness of the gift. The assessee was required to establish that the donor had the means and the gift was genuine, for natural love and affection. Reference in this regard may be made to the judgment of this Court in Lal Chand Kalra v. CIT, 22 CTR 135, judgment of Delhi High Court in Sajan Dass and Sons v. CIT, (2003) 264 ITR 435, CIT, West Bengal II v. Durga Prasad More, (1971) 82 ITR 540 and Sumanti Dayal v. CIT, (1995) 214 ITR 801."
10. Even this Bench in ITA No.72 of 1999 titled Shri Hanuman Dass Versus The Commissioner of Income Tax, Jalandhar and another decided on 22.11.2013 held as under:
"Taking up the case in hand, even when the donor had the means to make the gifts, there being neither any relationship nor there being any circumstance to show natural love and affection of the donor for the donee nor there being any occasion to make such gifts to the assessee and the authority of jurisdictional High Court being against the assessee, the authority cited by the assessee as Commissioner of Income Tax v. R.S. Sibal, (2004) 269 ITR 429 does not support the case of the appellant. Thus, there is no perversity or impropriety in the impugned order and sequelly the same is upheld."
17. It has been contended by the learned counsel for the respondent that the judgment rendered in the case of Puneet Chugh's case (supra), relying upon which Udham Singh's case (supra), has been decided, has been impugned before the Hon'ble Apex Court by way of SLP and notice of motion has been issued, but that by itself is no ground on the basis of which issue can be decided in his favour.
18. In view of the discussion above, we find that the alleged foreign gifts in favour of the assessee by persons are not genuine. We, therefore, answer the question in favour of the revenue and against the assessee. The appeal is accordingly allowed.