ORDER
V.K. Gupta, A.M.
1. This is an appeal, filed by the Revenue, against the order of the learned CIT(A), Mumbai. dt. 16th Sept., 2003 for the asst. yr. 2001-02.
2. In this appeal, the Revenue is aggrieved by the decision of the learned CIT(A) in deleting addition of Rs. 7 lakhs made by the AO under Section 68 of the Act.
3. The facts, in brief, are that the assessee showed that he had received a gift of Rs. 7 lakhs from one Shri Vishambardas Daryani. The AO required the assessee to explain the same and also recorded his statement under Section 131 of the Act. The assessee filed the confirmatory letter of the donor, xerox copy of the passport of the donor, copy of the deed of gift and copy of the concerned bank to prove the genuineness of the transaction. The AO, based upon the statement of the donee, i.e., assessee inferred that it was not a case of genuine gift particularly when the assessee had himself agreed to offer the same as income. Accordingly, he added the same to the total income of the assessee. Aggrieved by this, assessee carried the matter in appeal before the learned CIT(A) wherein it was contended that the statement of the assessee was accepted in a manner whereby he was forced to surrender the genuine gift as his income. That is why, the assessee filed an affidavit dt. 2nd Jan., 2003, retracting the said statement. The assessee also submitted various details regarding relationship between the assessee and the donor and evidences to establish the genuineness of the gift, creditworthiness of the donor and identity of the donor. The learned CIT(A) after analyzing the facts and material on record, directed the AO to treat this gift as genuine gift and he deleted the addition made by the AO under Section 68 of the Act. Relevant findings of the learned CIT(A) are as under :
68. After going through the facts of the case from the assessment order and after hearing the arguments of the learned Authorised Representative, and after perusing the various documents filed in the paper book, I find that, the AO was not justified in treating the gift received of Rs. 7,00,000 by the appellant from Shri Vishambardas Daryani, as non-genuine in spite of the fact that, the appellant had filed all the details about the gift, along with supporting documents to prove the genuineness of gift, identity of the donor and the creditworthiness of the donor. The only doubt in the mind of the AO was, as to why the gift deed was executed, after the lapse of considerable time from the date of receiving the gift. This doubt prompted the AO to record the statement of the appellant under Section 131 of the IT Act. The fact of executing the gift deed later on did not make the gift genuine. After perusing the whole of the statement recorded which contained 21 questions, I find that, there is considerable force in the arguments and claim of the learned Authorised Representative that some mental coercion was exerted, to extract the confession of the appellant, which is reflected in answer to question No. 20. Such a statement cannot be used against the appellant, in the light of the definite and corroborative evidence, which pointed towards the contrary facts. In case of the appellant all the direct evidences pointed towards the genuineness of the gift, identity of the donor and the creditworthiness of the donor. Accordingly, I have no other alternative but to direct the AO to treat the gift of Rs. 7,00,000 as genuine gift and thereby delete the addition of Rs. 7,00,000, made under Section 68 of the IT Act, being income from undisclosed sources.
Aggrieved by this, the Revenue is in appeal before us.
4. The learned Departmental Representative narrated the facts and specifically drew our attention to various explanations given by the assessee in course of the assessment proceedings. Based upon such references, he contended that there was no occasion to give the gift and even the assessee himself was not aware of the exact particulars of the donor, hence, it was a case of arranged gift. The learned Departmental Representative further placed strong reliance on the decision of the Hon’ble Supreme Court of India in the case of CIT v. P. Mohanakala and Ors. wherein the Hon’ble Supreme Court had held that the onus was on the part of the assessee to prove the genuineness of any sum which was found to be credited in the books of account and to prove that apparent was real and if the assessee was not able to discharge this burden then the fact that money had been received through bank was of no consequence. Accordingly, the learned Departmental Representative contended that the facts of this case were similar to the facts of the case not (sic) before the Hon’ble Supreme Court, hence, the ratio of that decision was squarely applicable here.
5. The learned Counsel for the assessee, on the other hand, contended that the assessee was a person of substantial means and drew our attention to the balance sheet of the assessee which showed a capital of Rs. 1.5 crores standing in his name; however, faced with temporary financial crunch, he asked the donor to give gift, hence, it could not be said that (it) was capital building exercise. The learned Counsel further contended that all the documentary evidences were produced before the AO which met the requirements of law, however, the AO extracted the statement of the assessee under mental coercion which resulted into surrender of this genuine gift as his income. But, immediately thereafter, the assessee retracted the same and, therefore, said statement was not binding. The learned Counsel also contended that there was no reason for the assessee to give such statement and if the said statement was excluded, then all the conditions of law were satisfied. The learned Counsel also contended that the donor was not examined to verify the bonafide of the claim of the assessee and during the course of earlier hearing before the Tribunal, the donor came to India to prove the claim of the assessee. However, the Tribunal did not function on that date, hence, he gave an affidavit narrating the facts and clearly stating that he made the gift to the assessee out of natural love and affection, hence, in these circumstances, there was no reason to treat the genuine gift as bogus. The learned Counsel also contended that the facts of this case were different from the facts of the case before the Hon’ble Supreme Court wherein the assessee had taken a number of gifts from a number of persons whereas in the present case, there was only one gift, hence, ratio of that decision was not applicable.
6. We have considered the submissions made by both the sides, material on record and orders of the authorities below. It is noted that the assessee filed all the relevant documentary evidences in support of gift received by the assessee from the donor. It is also noted that the donor has also given the confirmatory letter and even came before the Tribunal to substantiate the claim of the assessee. However, the Tribunal did not function on that date and he has given an affidavit in support of the claim of the assessee. We also find that in the case of Mohanakala (supra) the assessee received gift from more than one person, hence, that case is factually different from the facts of this case and even otherwise the assessee has suitably explained the gift, hence, it has to be treated as real one. Accordingly, we hold that the order of the learned CIT(A) is correct in law, hence, we decline to interfere.
7. In the result, the appeal filed by the Revenue, stands dismissed.