Income Tax Appellate Tribunal - Amritsar
Asstt. Cit vs Manoj Kumar Sekhri on 13 November, 2003
Equivalent citations: (2004)86TTJ(ASR)510
ORDER
R.S. Syal, A.M. This appeal by the revenue emanates from the order passed by the Commissioner (Appeals) on 3-9-1997, in relation to the assessment year 1994-95.
2. The solitary effective ground raised by the revenue reads as under :
"The learned Commissioner (Appeals) has erred both in law and on facts of the case in deleting the addition of Rs. 1,85,000 and Rs. 61,788 made by the assessing officer on account of foreign gifts."
3. The facts in nutshell are that the assessing officer while framing assessment under section 143(3) noted certain credit entries in the Saving Bank account of the assessee. Some of the entries were successfully explained before the assessing officer. However, with regard to sum of Rs. 1,85,000 credited on 16-8-1993, it was stated on behalf of the assessee that the amount was deposited in the Bank out of foreign gifts of US Dollars 6000 and US Dollars 2000 from Shri Mohinder Handa. On being called upon to explain the genuineness of the gift transactions, the assessee furnished a photocopy of cashier's check and also a fax copy of letter from Sh. Mohinder Handa. The assessing officer noted that no affidavit from Sh. Mohinder Handa was filed. It was also noted that the source of the person making gift or his capacity had also remained unauthenticated. Based on these facts, the assessing officer made the addition for the said sum. For the amount of Rs. 61,788, it was explained by the assessee that it arose from foreign gift received from Sh. Piara Singh Johal on 24-2-1994 to the extent of 2450 US Dollars. In support of the genuineness of the transaction, the assessee furnished photocopy of cashier's check and a copy of the letter from Sh. Piara Singh Johal affirming the making of the gifts. The assessing officer found that the said person was not related to the assessee and also there was no occasion for the gift. The assessing officer was surprised over the fact as to how a distant relative and totally unconnected person could make the gifts to the assessee. Since there was no occasion for the gift, the assessing officer made an addition for these two sums. In the first appeal, it was stated on behalf of the assessee that the gifts through Sh. Mohinder Handa to the tune of Rs. 1,85,000 were genuine and the necessary evidence was also produced. The learned Commissioner (Appeals) concurred with the submissions advanced by the assessee and deleted the addition. As regards to other addition of Rs. 61,788 on account of gift from Sh. Piara Singh Johal, it was stated by the assessee that the cheque received from Sh. Piara Singh Johal was dated 24-2-1994, which was sent to the Bank for collection by the assessee on 4-4-1994 and the same was credited to the Saving Bank account on 20-5-1994. It was urged that the same did not pertain to the accounting period relevant to the assessment year under consideration. The learned Commissioner (Appeals) agreed with the contention raised on behalf of the assessee and deleted this addition, as well.
4. Before us, the learned Departmental Representative strongly relied on the assessment order by contending that the additions were wrongly deleted.
5. On the other hand, the learned counsel for the assessee submitted that in similar circumstances in the same assessment year, gifts were also received by Sh. Narinder Kumar Sekhri from Sh. Handa and the learned Commissioner (Appeals) while disposing of the appeal of Sh. Narinder Kumar Sekhri had relied on his order in the case of Sh. Subhash Chander which, in turn, forms the basis of the impugned order. While taking us through the order passed by the Tribunal in the case of Narinder Kumar Sekhri, in ITA No. 682/ASR/1997 (reported as Narinder Kumar Sekhri v. Asstt. CIT (2003) 81 ITJ (Asr) 1036-Ed. J, copy placed in the paper book, learned authorised representative contended that the addition made on account of foreign gift was deleted. Copy of the order passed by the Commissioner (Appeals) in the case of said Sh. Narinder Kumar Sekhri was also produced before us. It was contended that the donor Sh. Handa had closer relations with the assessee's family and as a result of gesture to repay the gratitude, he had gifted small sums for which the necessary certificates had also been placed on the record. Our attention was drawn at p. 1 of the paper book confirming the fact of making gift by Sh. Handa to the assessee. Copy of the certificate issued by the Canada Trust namely the Banker of Mohinder Handa abroad was also placed at p. 3 to show that both the drafts of $ 6000 and $ 2000 came out of his Saving Bank account abroad. A letter from the General Motors of Canada Ltd., was also filed at p. 6 of the paper book confirming that Sh. Mohinder Handa was employed with them. His gross income for 1996 was stated to be at $57,524.01. In the background of these facts, it was stated that the assessee discharged the complete onus cast upon him. It was further argued that the department had not brought any material on record to disprove the contention of the assessee and, therefore, the learned Commissioner (Appeals) rightly proceeded to delete the addition. Insofar as the second gift of Rs. 61,788 was concerned, it was stated that the same was received from Sh. Piara Singh Johal. His declaration affirming the gift to Sh. Manoj Kumar was placed at p. 3 of the paper book and similarly copy of cashier's check favouring the assessee of 2450 US Dollars was also shown to us, to have been placed at p. 4 of paper book. It was, therefore, contended that in absence of any material to reject the assessee's explanation, the assessing officer was not justified in making addition and the learned Commissioner (Appeals) while appreciating the facts had correctly deleted the additions.
6. After considering the rival submissions and perusing the relevant material on record, it is obvious that insofar as the gift of Rs. 1,85,000 received from Sh Handa through proper Banking channel is concerned, the assessing officer had made the addition without rebutting assessee's explanation. He had not adversely commented upon the evidence furnished by the assessee. Nothing has been shown that the money received by the assessee by way of gifts was in fact assessee's own money which was routed to his account by way of gifts. It is true that the assessee had furnished declaration from the donor alongwith certificate from his Bankers to the effect of his having made the gifts to the assessee. If the assessing officer was not satisfied with the same, he should have proceeded further and brought some material on record to negate this evidence. We agree with the contention raised on behalf of the assessee that the occasion for making the gift and the relationship of the donor with the donee are not very relevant. Rather what is relevant is the genuineness of transaction together with the identity and capacity of the donors. When a particular explanation is furnished by the assessee and the evidence is adduced, the onus shifts to the department to falsify the said material or bring some new material on record to justify the addition. In the absence of any such exercise having been carried out by the assessing officer, we are satisfied that the learned Commissioner (Appeals) rightly proceeded to delete the addition. It is further found that the said Sh. Mohinder Handa also made gift to Sh Narinder Kumar Sekhri which became subject-matter of consideration by the Tribunal. After considering the facts of the case and also earlier order passed by the Amritsar Bench in ITA No. 947/Asr/1994 in the case of Sh. Satnam Singh Nbormahal, the addition was deleted. Since no distinguishing feature has been brought to our notice vis-a-vis Sh Narinder Kumar Sekhri's case, respectfully following precedent, we confirm the impugned order.
Turning to the other addition of Rs. 61,788, it is found that the learned Commissioner (Appeals) deleted this addition by holding that the credit related to the next assessment year for the reason that the amount credited to the assessee's the Bank account was on 20-5-1994, which falls in the previous year relevant to the assessment year 1995-96. The reason advanced by the Commissioner (Appeals) in support of his action is that the amount was credited in the next year. From the facts, it transpires that the said cheque of 2450 US Dollars received by the assessee is dated 24-2-1994, and it was sent by the assessee to Bank for collection on 4-4-1994, and ultimately proceeds were credited on 20-5-1994. The learned counsel for the assessee was required to indicate the actual date of receipt of cheque by the assessee from Sh. Piara Singh Johal. It was admitted that it might have been received prior to 31-3-1994, but at the same time maintaining that proceeds were actually credited in the previous year relevant to the next assessment year. We find that the basis given by the Commissioner (Appeals) for allowing relief is not correct. Where the payment is received by cheque, it relates back to the date when such cheque is accepted and not when it is not deposited or encashed. The Hon'ble Supreme Court in the case of CIT v. Ogale Glass Works Ltd. (1954) 25 ITR 529 (SC) has laid down to this extent. Since the cheque in question was received by the assessee prior to the close of the financial year, we are satisfied that the issue for consideration of the genuineness of the gift arose in this very year. In our considered opinion, the learned Commissioner (Appeals) erred in considering that the date of receipt is one falling in the subsequent assessment year. His order is, therefore, reversed to this extent. Coming to the merits of the case, it is found that the addition was made by the assessing officer on the same facts as were prevailing in the case of gift received from Sh. Mohinder Handa which has been discussed supra. Here also, the assessing officer had not brought any material on record to disapprove the assessee's contention and evidence in support of the genuineness of the gift. For the reasons. recorded in the foregoing paras, we hold that the addition was not called for and rightly deleted.
7. In the result, the appeal stands dismissed.