ORDER
SHEET IN THE HIGH COURT AT CALCUTTA Special Jurisdiction [Income Tax].ORIGINAL SIDE ITA No.99 of 2006 M/S.JHARNA DEY Versus COMMISSIONER OF INCOME TAX DURGAPUR & ANR BEFORE: The Hon'ble JUSTICE SOUMITRA PAL The Hon'ble JUSTICE MIR DARA SHEKO Date : 10th September, 2015.
Mr.R.K.
Biswas, Adv.Mr.M.P.
Agarwal, Adv.Soumitra Pal, J.:- The Court : Let affidavit of service filed by the learned advocate for the appellant be kept on record.
This appeal, under Section 260A of the Income Tax Act, 1961 arising out of the order dated 25th October, 2005 passed by the Income Tax Appellate Tribunal for the assessment year 2001-02, was admitted on the following substantial question of law: “Whether the Tribunal was justified in law in upholding the addition of Rs.1,00,000/- gifted to the appellant by her brother-in-law, an income tax assessee who had reflected the gift in his income-tax return and confirmed it before the Assessing Officer, under Section 131 of the Income Tax Act, 1961, merely because the gift was made in cash and in reversing the finding of the Commissioner of Income-tax (Appeals) that the donor had the means to make the gift and its purported findings in that behalf are arbitrary, unreasonable and perveRs.?.” Facts in brief are as follows: On 4th March, 2002 the appellant filed the return of income.
The case was selected for scrutiny.
Notices under Sections 142(1) and 143(2) of the Act were served.
The assessee claimed to have received a gift of Rs.1,50,000/- in cash, out of which Rs.1,00,000/- was from Gautam Kumar Dey, her brother-in-law.
While considering the claim of gift of Rs.1 lakh, the Assessing Officer verified the assessment record of Gautam Kumar Dey and examined his statements recorded under Section 131(3) of the Act and the Inspector’s report.
In the assessment order the Assessing Officer while calculating the total income of the appellant at Rs.7,78,100/-, treated the addition of Rs.1 lakh as unexplained cash credit and added it back to her total income.
Aggrieved by the said assessment order, the appellant preferred appeal before the Commissioner of Income Tax (Appeals).The CIT(A).after hearing the parties confirmed the addition of Rs.1 lakhs, by holding, inter alia, as under: “It is the admitted position that Shri Gautam Kumar Dey has been filing his returns and he had sufficient money in his kitty to enable him gift out the said amount of Rs.1,00,000/- to his sister-in-law.
However, the Assessing Officer has mentioned in his order that Shri Dey has also given similar gifts of Rs.1,50,000/and Rs.60,00/- in the preceding and succeeding years to the appellant in cash and it smacks of some design.
It is found that Shri Dey is a small time businessman and earns just enough to make both ends meet.
He could not be believed to have donated regularly without any reciprocity from his sister-in-law.
So, even if the identity of the donor and his creditworthiness is proved the genuineness of transaction is not.
His alleged savings had been all along kept in cash and he had even the urge to get some interest by depositing the same in a bank which is a natural motive.
Even at the time of gifting the sum, he did not think of depositing fiRs.in a bank and then drawing out a cheque in favour of the appellant.
So, I agree that this gift is not genuine.
The addition of Rs.1,00,000/- is confirmed.” Further aggrieved, the appellant preferred appeal before the Tribunal which was dismissed by the order under challenge.
The relevant portion of the said order is as under : “The assessee’s appeal relates to the action of the CIT(A) in confirming the addition of Rs.1 lakh made to the assessee by her brother-in-law.
On this point we agree with the Assessing Officer and the CIT(A) that the assessee’s brother-in-law did not have the means to make a gift of Rs.1 lakh to the assessee in cash.
The very fact that he did not make the gift by cheque only goes to prove that he did not have the means to give a gift of Rs.1 lakh to the assessee.
We, therefore, dismiss the assessee’s appeal also.” Mr.Biswas, learned advocate for the appellant submits since Gautam Kumar Dey, the donor, out of natural love and affection had made the gift to the appellant for construction of a house and as in the assessment year 2003-04 the CIT(A) on similar facts and circumstances, by an order dated 7th July, 2008 had deleted the addition, CIT(A) and the Tribunal erred in holding that the gift was not genuine.
Let a copy of the said order dated 7th July, 2008 filed be kept on record.
Mr.Agarwal, learned advocate for the respondent submits since it appears from facts that the donor lacked credit-worthiness and transactions were often made in cash, the Tribunal was justified in upholding the order of CIT(A).Heard Mr.Biswas and Mr.Agarwal.
It is evident that the Assessing Officer, the CIT(A) and the Tribunal had rejected the contention of the appellant on the ground that the donor lacked creditworthiness and treating the said sum as an unexplained cash credit, it was added to total income under the head “income from undisclosed source”.
The submission of the appellant that in the assessment year 2003-04 on similar facts the CIT(A) had taken a different view cannot be accepted as therein the credit-worthiness of the donors and the genuineness of transactions were not in doubt as therein “the finance” was “coming from the parents-in-law of the lady” was “quite on a different footing”, which was “a simple manifestation of mutual trust and cohesion authenticated by the norms of traditional joint living” and on those facts the CIT(A) had deleted the addition of Rs.2,70,000/-.
Hence, the order dated 7th July, 2008 passed by the CIT(A) does not help the appellant.
Thus as we find that the authorities, including the Tribunal had found that the assessee’s brother-in-law did not have the capacity to make a gift of Rs.1 lakh to the appellant in cash, the appeal is without any merit.
Therefore, the question is answered in the affirmative, against the assessee and in favour of the respondent.
Hence, the appeal is dismissed.
(SOUMITRA PAL, J.) I agree.
(MIR DARA SHEKO, J.) sm