Income Tax Appeal v. Padam Singh Chouhan

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR -------------------------------------------------------- INCOME TAX APPEAL No. 33 of 2004 V/S PADAM SINGH CHOUHAN Mr. K.K. Bissa, for the appellant. None present for the respondent. HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI DEO NARAYAN THANVI,J. ORDER ----- This appeal has been filed by the Revenue, against thejudgment of learned Tribunal, confirming the deletion ofaddition of Rs.4,50,000/-. The appeal was admitted on 16.7.2004, by framingfollowing substantial question of law:- “Whether in the facts and circumstances of thecase, the learned Tribunal was justified indeletingtheadditionofRs.4,50,000/-,Rs.2,50,000/- and Rs.2,00,000/-, which have beenreceived on account of gift when no relation hasbeen established from whom gifts have beenreceived, whether the finding of the learnedTribunal is perverse?” Officer, the learned Commissioner, and the learnedTribunal. What we find is, that the Assessing Officer hasassumed doubts against the donor, merely on the basis ofhis having deposited certain amounts in his accounts, soonbefore making of the gifts, and that the assessee hadwithdrawn the amounts deposited by him, including theamount of the said gifts, in short span of time. With this,the learned Assessing Officer has found, that the factscreated doubt, that how the assessee as well as his familymembers are receiving such huge gifts from a personresiding abroad, and concluded, that it appears, that thegifts are not genuine, and are only a managed affairs ofthe assessee. The learned Commissioner has reversed thisfinding by holding, that the assessee had clearly shownfrom the assessment proceedings, that the gifts were madeout of love and affection towards the assessee, and it is amatter of God’s grace to make love and affection betweenDonors and Donee, and that to have love and affectionbetween two persons, blood relation is not required, andlooking to the status of the donors, the amount gifted wasvery meager. Then, it was found by the learnedCommissioner, that the assessee has also furnished thecopies of the gift deeds, and affidavits of the donors. Inthe opinion of the learned Commissioner, it is not a case,where the assessee had first given such amounts to thedonors, and the donor returned back to the assessee by wayof gift. The Commissioner had gone through the bank accounts of the donors, copies thereof are on record, andfound, that there was sufficient cash balance on the dateof gift to the appellant, in respect of both the donors,and thus, the addition was deleted, and the learnedTribunal has affirmed this finding, by relying upon certainjudgments. In our view, there is no legal basis to assume, that torecognize the gift to be genuine, there should be any bloodrelationship, or any close relationship, between the donorand the donee. Instances are not rare, when even strangersmake gifts, out of very many considerations, includingarising out of love, affection and sentiments. In our view, when the assessee has produced the copiesof the gift deeds and the affidavits of the donors, in theabsence of anything to show, that the act of the assesseein claiming gift, was an act by way of money laundering,simply because he happens to receive gifts, it cannot besaid that, that is required to be added in his income. Accordingly, the question as framed is answered againstthe Revenue, and in favour of the assessee. The Appealthus has no force and is hereby dismissed. ( DEO NARAYAN THANVI ),J. ( N P GUPTA ),J.ms rathore