Shri Piyush Goyal, Etah v. ITO, Etah

ITA 679/AGR/2008 | 1999-2000
Pronouncement Date: 25-05-2010 | Result: Allowed

Appeal Details

RSA Number 67920314 RSA 2008
Assessee PAN AAOPG7432L
Bench Agra
Appeal Number ITA 679/AGR/2008
Duration Of Justice 1 year(s) 5 month(s) 22 day(s)
Appellant Shri Piyush Goyal, Etah
Respondent ITO, Etah
Appeal Type Income Tax Appeal
Pronouncement Date 25-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 25-05-2010
Date Of Final Hearing 23-04-2010
Next Hearing Date 23-04-2010
Assessment Year 1999-2000
Appeal Filed On 03-12-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.679/AGR/2008 ASST. YEAR: 1999-2000 SHRI PIYUSH GOYAL VS. INCOME-TAX OFFICER 219/7 POST OFFICE ROAD WARD 3(1) ETAH. ETAH (U.P.) (PAN : AAOPG 7432 L) ITA NO.678/AGR/2008 ASST. YEAR: 1999-2000 KM. PREETI GOYAL VS. INCOME-TAX OFFICER 219/7 POST OFFICE ROAD WARD 3(1) ETAH. ETAH (U.P.) (PAN : AFBPG 6828 G) ITA NO.677/AGR/2008 ASST. YEAR: 1999-2000 SHRI RAMESH CHAND GOYAL VS. INCOME-TAX OFFIC ER 219/7 POST OFFICE ROAD WARD 3(1) ETAH. ETAH (U.P.) (PAN : AAOPG 7434 N) ITA NO.676/AGR/2008 ASST. YEAR: 1999-2000 SMT. CHANDRA MUKHI GOYAL VS. INCOME-TAX OFFIC ER 219/7 POST OFFICE ROAD WARD 3(1) ETAH. ETAH (U.P.) (PAN : AAOPG 7433 M) (APPELLANTS) (RESPONDENT) APPELLANTS BY : SHRI ANURAG SINHA ADVOCATE RESPONDENT BY : SHRI R.C. SHARMA JR. D.R. ORDER PER BENCH : 2 THESE APPEALS HAVE BEEN FILED BY FOUR DIFFERENT ASS ESSEES AGAINST THE SEPARATE ORDERS OF THE CIT(A) DATED 02.09.2008 FOR ASSESSMENT YEAR 199 9-2000. SINCE THESE FOUR APPEALS INVOLVING COMMON ISSUES FOR THE SAKE OF CONVENIENC E ALL THESE APPEALS ARE HEARD TOGETHER AND DECIDED BY THIS COMMON ORDER. 2. THE ISSUE INVOLVED RELATES TO THE VALIDITY OF TH E ACTION OF ISSUING NOTICE UNDER SECTION 148 AND THE SUSTENANCE OF THE ADDITION OF THE GIFT RECE IVED BY EACH OF THE ASSESSEES. 3. BOTH THE LD. A.R. AND LD. D.R. AGREED THAT SINCE THE ISSUES INVOLVED ARE COMMON I.E. THE ADDITION OF THE GIFT RECEIVED IN THE CASE OF EACH O F THE ASSESSEE IT WAS CONTENDED THAT THE CASE OF SHRI PIYUSH GOYAL IN ITA NO.679/AGR/2008 IS TAKEN A ND WHATEVER DECISION THIS TRIBUNAL MAY TAKE IN THE CASE OF SHRI PIYUSH GOYAL THE SAME MAY APPLY TO OTHER CASES. 4. EVEN THOUGH EACH OF THE ASSESSEE HAS TAKEN 6 GRO UNDS OF APPEAL THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THERE IS ONLY ONE ISSUE WHI CH IS RELEVANT AND THE SAME IS WHETHER THE ADDITION IN RESPECT OF THE GIFT RECEIVED BY EACH OF THE ASSESSEE IS JUSTIFIED ON FACTS AND CIRCUMSTANCES OF THE CASE. 5. WE ARE TAKING THE FACTS OF THE CASE OF SHRI PIYU SH GOYAL IN ITA NO.679/AGR/2008 AS BOTH THE PARTIES AGREED THAT THE FACTS IN EACH CASE ARE SAME EXCEPT THE CHANGE IN FIGURES. THE FACTS THAT THE A.O. RECEIVED INFORMATION FROM ITO 4(1) AGRA T HAT SURVEY UNDER SECTION 133A OF THE INCOME-TAX ACT 1961 (THE ACT HEREINAFTER) WAS CO NDUCTED ON 22.04.2001 AT THE PREMISES OF SHRI D.K. AGARWAL CHARTERED ACCOUNTANT. DURING TH E COURSE OF SURVEY IT WAS NOTED BY THE 3 DEPARTMENT THAT SHRI D.K. AGARWAL HAS CREATED BOGUS TRUSTS IN THE NAME OF GOD AND GODDESSES OF WHICH HE OR HIS FAMILY MEMBERS AND HIS OTHER ASS OCIATES BECOME TRUSTEES. HE THUS CONTROLLED ABOUT 292 TRUSTS AND THE TRUSTS WERE NOT CONDUCTING ANY BUSINESS BUT LARGE RECEIPTS OF MONEYS WERE SHOWN IN THE HANDS OF THESE TRUSTS BY WAY OF G IFTS PROFITS DONATIONS ETC. THE GIFTS WERE RECEIVED IN CASH FROM OTHER TRUSTS AND IN TURN PROV IDED GIFTS TO VARIOUS OTHER PERSONS. NO RELATIONSHIP EXISTED BETWEEN SUCH DONORS AND DONEES . ONE SHRI LALIT KUMAR AGARWAL STATED THAT SHRI D.K. AGARWAL HAS CREATED BOGUS TRUSTS IN HIS N AME (OF SHRI LALIT KUMAR AGAWAL) AND THAT ALTHOUGH HE HAD BEEN SHOWN AS TRUSTEE BUT HE DOES N OT HAVE ANY KNOWLEDGE ABOUT THE ACTIVITIES OF THE TRUST. A REGISTER WAS ALSO FOUND DURING THE COURSE OF SURVEY WHICH SHOWS THAT ONE OF THE TRUST NAMELY SMT. MEERA DEVI PVT. FAMILY TRUST WAS MAINTAINED AND CONTROLLED BY SHRI D.K. AGARWAL. THE TRUST HAS GIVEN GIFT OF RS.7 00 000/- TO THE ASSESSEE RS.4 00 000/- TO SHRI RAMESH CHAD GOYAL RS.6 00 000/- TO KM. PREETI GOYAL AND R S.4 00 000/- TO SMT. CHANDRA MUKHI GOYAL THROUGH D.D. PURCHASED FROM STATE BANK OF INDIA JA IPUR HOUSE AGRA ON 12.02.1999 AND ON THE BASIS OF THE ABOVE INFORMATION NOTICE UNDER SECTIO N 148 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE A.O. SUBSEQUENTLY WHEN ENQUIRED FROM STATE BAN K OF INDIA JAIPUR HOUSE CAME TO KNOW THAT M/S. MEERA ENTERPRISES HAS DEPOSITED CASH OF R S.4 10 000/- ON 08.02.1999 AND RS.5 00 000/- IN CASH ON 06.03.1999. ON 08.02.1999 A SUM OF RS.4 00 800/- WAS WITHDRAWN FOR PURCHASE OF D.D. AND ON 06.03.1999 A SUM OF RS.2 00 600/- WAS W ITHDRAWN TO PURCHASE THE D.D. M/S. MEERA ENTERPRISES WAS SHOWN TO BE THE PROPRIETARY UNIT OF MEERA DEVI PVT. FAMILY TRUST. THE A.O. FINALLY ADDED THE FOLLOWING SUM IN THE CASE OF EACH ASSESSEE UNDER SECTION 68 OF THE ACT AS DETAILED UNDER RESPECTIVELY:- SHRI PIYUSH GOYAL RS.7 00 000/- KM. PREETI GOYAL RS.6 00 000/- SHRI RAMESH CHAND GOYAL RS.4 00 000/- SMT. CHANDRA MUKHI GOYAL RS.4 00 000/- 4 6. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AN D CHALLENGED THE INITIATION OF THE PROCEEDINGS UNDER SECTION 147 READ WITH SECTION 148 OF THE ACT AND ALSO CHALLENGED THE ADDITION MADE UNDER SECTION 68 OF THE ACT. THE CIT(A) UPHEL D THE PROCEEDINGS UNDER SECTION 147 AND ALSO UPHELD THE ADDITION MADE UNDER SECTION 68 OF T HE ACT. 7. LD. A.R. BEFORE US CONTENDED THAT THE ASSESSEE H AS BROUGHT ON RECORD FOLLOWING DOCUMENTS EVIDENCING THE GIFTS OF RS.4 00 000/- AND RS.3 00 000/- RECEIVED BY THE ASSESSEE :- A) INTIMATION DATED 08.02.1999 REGARDING GIFT FOR RS.4 00 000/- B) GIFT DEED OF RS.4 00 000/- MENTIONING THE RELEVA NT PARTICULARS ABOUT THE GIFT. C) STATEMENT SHOWING AVAILABILITY OF FUND/FUND FLOW STATEMENT IN RESPECT OF GIFT OF RS.4 00 000/- D) DETAILED DECLARATION REGARDING GIFT MENTIONING R ELEVANT INFORMATION IN RESPECT OF GIFT OF RS.4 00 000/-. E) INTIMATION DATED 08.02.1999 REGARDING GIFT FOR RS.3 00 000/-. F) GIFT DEED OF RS.3 00 000/- MENTIONING THE RELEVA NT PARTICULARS ABOUT THE GIFT. G) STATEMENT SHOWING AVAILABILITY OF FUND/FUND FLOW STATEMENT IN RESPECT OF GIFT OF RS.3 00 000/-. H) DETAILED DECLARATION REGARDING GIFT MENTIONING R ELEVANT INFORMATION IN RESPECT OF GIFT OF RS.3 00 000/-. I) INTIMATION ISSUED UNDER SECTION 143(1) OF THE A CT FOR A.Y. 1998-1999. J) INCOME TAX RETURN ACKNOWLEDGEMENT OF TRUST FILED ON 20.04.1999 FOR A.Y. 1999-2000. K) INCOME TAX RETURN ACKNOWLEDGEMENT OF TRUST FILED ON 27.06.2000 FOR A.Y. 2000-2001. L) INCOME TAX RETURN ACKNOWLEDGEMENT OF TRUST FILED ON 30.07.2001 FOR A.Y. 2001-2002. M) INCOME TAX RETURN ACKNOWLEDGEMENT OF TRUST FILED ON 08.07.2008 FOR A.Y. 2008-2009. N) CAPITAL ACCOUNT AND BALANCE SHEET OF TRUST FOR T HE YEAR ENDED 31.03.1999 O) TRUST DEED OF SMT. MEERA DEVI PRIVATE FAMILY SPE CIFIC TRUST DATED 26.04.1972. P) COPY OF THE COMBINED ORDER IN ITA NO.906/3558/35 59/(DEL) OF 1985 DATED 24.10.1986 PASSED BY THE HONBLE E BENCH IN THE CASE OF M/S SMT. MEERA DEVI PVT. FAMILY TRUST VACATING/SETTING ASIDE ORDER PASSED UNDER SECTION 2 63 IN THE CASE OF TRUST BY THE CIT AGRA. Q) COPY OF THE COMBINED ORDER DATED 05.10.1987 PASS ED BY THE HONBLE E BENCH IN THE CASE OF M/S SMT. MEERA DEVI PVT. FAMILY TRUST IN R. A. NO.104/105/106/DEL/87 ARISING OUT OF ITA NO.706/3558/3557/DEL/85 REJECTING THE RE FERENCE APPLICATION OF THE REVENUE. 8. IT WAS POINTED OUT THAT DURING THE COURSE OF ASS ESSMENT PROCEEDINGS SHRI D K AGARWAL TRUSTEE WAS SUMMONED AND HIS STATEMENT WAS RECORDE D IN WHICH HE CONFIRMED THE TRANSACTION OF GIFT. THE A.O. HAS NOT ACCEPTED THE GENUINENESS OF THE GIFT MAINLY ON THE FOLLOWING GROUNDS:- 5 (I) THE CASH BOOK AND LEDGER OF ABOVE TRUST IS NOT AVAILABLE. (II) HE ALSO COULD NOT ANSWER ABOUT AVAILABILITY OF CASH ON THE DATE OF DEPOSIT OF CASH INTO BANK. (III) THE REQUISITION SLIPS FOR PURCHASE OF DDS WE RE PURCHASED BY HIM. (IV) SHRI D.K. AGARWAL TRUSTEE AND THE DONOR TOLD THAT ASSESSEE IS SON OF HIS FRIEND AND KNOWN TO HIM FOR LAST 15 YEARS. BUT NEITHER AS SESSEE NOR HIS FAMILY MEMBER HAS GIVEN ANY GIFT BEFORE OR AFTER RECEIPT OF THE G IFT FROM THE ABOVE TRUST. (V) THE OCCASION OF GIFT WAS TOLD TO BE GOD FESTIVA L WHICH IS NOT SPECIFIED BY HIM. (VI) SHRI D.K. AGARWAL TRUSTEE (DONOR) OF M/S MEER A DEVI PVT. FAMILY TRUST COULD NOT ANSWER ABOUT DATE-WISE WITHDRAWALS MADE FROM CO MBINED CAPITAL ACCOUNT OF THE TRUST. 9. IT WAS THUS SUBMITTED THAT THE ADDITION HAS BEEN CONFIRMED BY THE CIT(A) ONLY ON THE REASONING AS ASSIGNED BY THE ASSESSING OFFICER. 10. IT WAS SUBMITTED THAT NONE OF THE OBJECTION IS MATERIAL ENOUGH TO CONCLUDE THAT THE GIFT AS RECEIVED BY THE APPELLANT REPRESENTS UNDISCLOSED IN COME OF THE APPELLANT. IF THE A.O. WAS UNSATISFIED WITH THE AFFAIRS OF THE DONOR CORRECT R ECOURSE WOULD HAVE BEEN TO TAKE OR PROPOSED ACTION IN THE HANDS OF THE DONOR INSTEAD OF TAXING THE APPELLANT. THE A.O. HAS MADE THE ADDITION ALSO ON THE GROUND THAT THERE IS NO RELATIONSHIP BE TWEEN THE DONOR AND THE DONEE. IT IS SUBMITTED THAT THERE IS NO SUCH REQUIREMENT OF LAW THAT GIFT CAN ONLY BE MADE BY RELATION. SECTION 56(2)(V) ITSELF PROVIDES TWO MONETARY LIMITS FOR GIFTS BY RE LATION AND BY STRANGER WHICH SHOWS THAT THE LEGISLATION DOES NOT PROHIBIT GIFTS TO STRANGERS UP TO CERTAIN LIMIT. IN THIS CONNECTION REFERENCE IS INVITED TO THE FOLLOWING CASE LAWS:- (I) DELHI HIGH COURT IN CIT VS. MRS. SUNITA VACHANE (1990) 184 ITR 125 HAS ITSELF OBSERVED: IT SEEMS UNUSUAL FOR THE STRANGER TO MAK E GIFTS TO UNKNOWN PERSONS. YET THE TRIBUNAL HAVING FOUND SUFFICIENT EVIDENCE REGARDING GENUINENESS OF GIFT. NO QUESTION OF 6 LAW AROSE FROM THE ORDER OF THE TRIBUNAL. FURTHER THE DELHI BENCH OBSERVED THAT THERE IS NO BAR FOR THE STRANGER TO MAKE GIFT TO THE INDIAN CITIZEN. (II) IN MURLIDHAR LOHARMAL VS. CIT (2006) 153 TAXMA N 451 (GUJ) THE COURT DID NOT APPROVE THE TRIBUNALS ACTION IN ENQUIRING MOTIVATION FOR G IFT AND TO EXAMINE THE QUESTION AS TO WHY THE DONOR SHOULD MAKE GIFT. (III) IN ACIT VS. MANOJ KUMAR SCKTRI (2005) 142 TAX MAN 15 (AMRITSAR) (MAZ): OCCASION AND RELATIONSHIP WITH DONOR ARE IRRELEVANT. (IV) IN MRS. MAYAWATI VS. DCIT (2008) 19 SOT 460 (D ELHI) THE TRIBUNAL OBSERVED THAT THE AO HAD ALSO HIGHLIGHTED THE FACT THAT THERE WAS NO RELATIONSHIP BETWEEN THE DONOR AND DONEE AND THEREFORE THE GENUINENESS OF THE TRANSAC TION OF THE GIFTS WERE NOT PROVED. HERE IT MAY BE POINTED OUT THAT A GIFT MAY BE MADE TO A STRANGER. SECTION 123 OF THE TRANSFER OF PROPERTY ACT DOES NOT REQUIRE THAT GIFT S SHOULD BE MADE TO A RELATION ONLY. THUS THE AO HAD TAKEN AN INCORRECT VIEW OF LAW. 11. THUS IT WAS CONTENDED THAT THE GIFT RECEIVED B Y THE ASSESSEE WAS GENUINE AND NO ADDITION CAN BE MADE ON THE GROUND OF NON-RELATIONSHIP. THE PERUSAL OF THE RECORDS WOULD REVEAL THAT SHRI. D. K. AGARWAL IS A TRUSTEE OF TRUST AND AS A TRUSTEE OF THE TRUST WAS AUTHORIZED BY THE OTHER MEMBERS OF THE TRUST TO DEAL WITH THE FUNDS OF THE TRUST. THE GIFT HAS BEEN MADE FROM THE TRUST FUNDS. SIMILAR OBJECTION STOOD ALREADY ADJUDICATED BY THE ITAT AGRA BENCH IN THE CASE OF SHRI. MUKESH KUMAR AGARWAL IN ITA NO.110/AGRA/2005 WHEREI N VIDE ORDER DATED 27/07/2005 THE HONBLE BENCH OBSERVED AS UNDER:- BEFORE PARTING I WOULD MERELY LIKE TO ADD THAT TH E CASE OF THE DEPARTMENT HAS NOT BEEN THAT THERE CAN BE NO GIFT BY A TRUST OR TH AT THE DONOR HAS PARTED WITH THE TRUST FUNDS IN FAVOUR OF THE ASSESSEE ALTHOUGH AT C LOSING ARGUMENTS WERE ADVANCED BY THE LEARNED D.R. IN THIS NATURE. IN THE FACTS AS THEY STAND PRESUMING FOR A MOMENT THAT THE DONOR HAS GIFTED AN AMOUNT FROM A T RUST FROM WHICH THE DONOR WAS NOT ENTITLED TO GIFT THEN THAT IS AN ISSUE WHIC H IS BETWEEN THE TRUST AND THE DONOR AND THE ASSESSEE FOR THE SAID TRANSGRESSION IF ANY CANNOT BE A FAULTED WITH. 12. RELIANCE WAS PLACED ON THE DECISION OF SHRI MUK ESH KUMAR AGARWAL IN ITA NO.312/AGR/2006 IN WHICH ALSO VIDE ORDER DATED 16.1 0.2009 UNDER SIMILAR CIRCUMSTANCES THE 7 GIFT WAS HELD TO BE GENUINE. COPY OF THE DECISION WAS PLACED ON RECORD. IT WAS CONTENDED THAT THE ASSESSEE HAS DULY DISCHARGED THE PRIMARY ONUS T O PROVE THE GENUINENESS OF GIFT IDENTITY OF THE DONOR AND HIS CREDITWORTHINESS. RELIANCE WAS P LACED IN THIS REGARD ON THE FOLLOWING CASE LAWS :- (A) MRS. RANJANA KATIYAL VS. ACIT (2008) 113 TTJ (D ELHI) 479 (B) MONNET ISPAT AND ENERGY LTD. VS. DCIT (2008) 17 1 TAXMAN 27 (DELHI) (MAZ.) (C) KAMAL MOTORS VS. CIT (2003) 131 TAXMAN 155 (D) CIT VS. ORISSA CORP. (P) LTD (1986) 159 ITR 78 (S.C.) (E) CIT VS. KAMAL JEET SINGH (2005) 147 TAXMAN 18 ( ALL) (F) SANSAR AUTOMOBILE VS. ITO (2005) 96 TTJ (JODH) 368). 13. IN VIEW OF THESE CASE LAWS IT WAS CONTENDED TH AT THE ASSESSEE HAS DULY PROVED THE IDENTITY OF THE DONOR WHOSE PAN IS ON RECORD. THE TRUSTEE A PPEARED BEFORE THE A.O. AND CONFIRMED THE TRANSACTION IN HIS STATEMENT. THE CREDITWORTHINESS IS PROVED FROM THE COPIES OF THE BALANCE SHEETS ANNEXED WITH THE GIFT PAPERS. THE GIFTS WER E MADE BY ACCOUNT PAYEEE D.D. FROM REGULAR BANK ACCOUNT OF THE DONOR. THE A.O. MADE THE ADDIT ION ONLY ON THE GROUND THAT THE DONOR AND THE DONEE WHO ARE STRANGERS AND DO NOT KNOW THE FAM ILY MEMBERS OF EACH OTHER. THIS CANNOT BE VALID GROUND FOR NOT ACCEPTING THE GENUINENESS OF G IFT WHEN THE THREE REQUIRED INGREDIENTS UNDER SECTION 68 ARE SATISFIED BY THE ASSESSEE. THE ASSE SSEE IS NOT REQUIRED TO PROVE THE SOURCE OF THE SOURCES. THE OBLIGATION OF THE DONOR CANNOT BE EXT ENDED TO THIS UNREASONABLE EXTENT. IF THE A.O. WAS NOT SATISFIED HE SHOULD HAVE MADE THE ADDITION IN THE HANDS OF THE DONOR. RELIANCE WAS PLACED IN THIS REGARD ON THE FOLLOWING CASE LAWS:- ITO WARD-2 MATHURA VS. SMT. SUKHO DEVI IN ITA NO. 1991/DEL./1994 KULDEEP GOGIA VS. ITO IN ITA NO. 297/AGRA/2004 ITO VS. N. SUNITHA REPORTED IN (2001) 70 TTJ (BANG. ) 27 SUPREME TYRES VS. ITO (2004) 1 SOT 406 (ASR). BHAGWANDAS SHARDA VS. ACIT (2004) 82 TTJ (HYD) 982. S. K. JAIN VS. ITO (2004) 2 SOT 579 (AGRA). 8 14. IT WAS FURTHER SUBMITTED THAT THE HONBLE ITAT AGRA BENCH IN ITA NOS. 171 173 174/AGR./2008 VIDE ORDER DATED 25.03.2008 (PAPER BO OK PAGES 97 TO 106) AND IN ITA NO.175 VIDE ORDER DATED 20.06.2008 (PAPER BOOK PAGES 107 T O 109) & ITA NO.484/AGR./2007 VIDE ORDER DATED 19.05. 2008 (PAPER BOOK PAGES 110 TO 116) & I TA NO.110/AGRA/2005 VIDE ORDER DATED 27.07.05 (PAPER BOOK PAGES 120 TO141) HAD THE OCCAS ION TO DEAL WITH IDENTICAL CONTROVERSY AND WHEREIN THE HONBLE BENCH VIDE ORDER DATED 23.05.20 08 UPHELD THE ORDER PASSED BY THE CIT(A) DELETING THE ADDITIONS AND REVERSE THE ORDER PASSED BY THE CIT(A) UPHOLDING THE REASSESSMENT PROCEEDINGS. THE ISSUE IS THUS COVERED IN FAVOUR O F THE ASSESSEE AND AGAINST THE REVENUE AND MAY KINDLY BE HELD SO. COPIES OF THE ORDERS ARE ON RECORD. 15. LD. D.R. ON THE OTHER HAND RELIED ON THE ORDE RS OF THE AUTHORITIES BELOW. 16. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO GONE THROUGH THE ORDER OF THE TAX AUTH ORITIES BELOW AS WELL AS THE CASE LAW RELIED ON BEFORE US. THE ASSESSEE HAS RECEIVED GIFT OF RS .7 00 000/- (VIDE TWO D.DS. OF RS.4 00 000/- & RS.3 00 000/- RESPECTIVELY) FROM SHRI D.K. AGARWAL THE TRUSTEE OF MEERA DEVI PVT. FAMILY TRUST. THE ASSESSEE SUBMITTED CONFIRMATION OF THE GIFT GIFT DEED BALANCE SHEET COPY OF THE CAPITAL ACCOUNT OF THE TRUST PAN OF THE TRUST COP Y OF THE TRUST DEED. SHRI D.K. AGARWAL TRUSTEE WAS SUMMONED AND HIS STATEMENT WAS RECORDED IN WHIC H HE CONFIRMED THE TRANSACTION OF GIFT. THE A.O. HAS NOT ACCEPTED THE GENUINENESS OF THE GI FT AS THE DONEE IS A STRANGER AND THE DONOR AND DONEE DO NOT KNOW THE FAMILY MEMBERS EACH OTHER AND ALSO THAT THERE WAS NO OCCASION TO GIVE THE GIFT. THE ASSESSEE RELIED ON THE CASE LAW AS HAS BEEN LAID DOWN HEREIN ABOVE. THE OBSERVATIONS IN THESE CASE LAW ARE REPRODUCED HER EIN BELOW:- 9 (I) DELHI HIGH COURT IN CIT VS. MRS. SUNITA VACHANE (1990) 184 ITR 125 HAS ITSELF OBSERVED: IT SEEMS UNUSUAL FOR THE STRANGER TO MAK E GIFTS TO UNKNOWN PERSONS. YET THE TRIBUNAL HAVING FOUND SUFFICIENT EVIDENCE REGARDING GENUINENESS OF GIFT. NO QUESTION OF LAW AROSE FROM THE ORDER OF THE TRIBUNAL. FURTHER THE DELHI BENCH OBSERVED THAT THERE IS NO BAR FOR THE STRANGER TO MAKE GIFT TO THE INDIAN CITIZEN. (II) IN MURLIDHAR LOHARMAL VS. CIT (2006) 153 TAXMA N 451 (GUJ) THE COURT DID NOT APPROVE THE TRIBUNALS ACTION IN ENQUIRING MOTIVATION FOR G IFT AND TO EXAMINE THE QUESTION AS TO WHY THE DONOR SHOULD MAKE GIFT. (III) IN ACIT VS. MANOJ KUMAR SCKTRI (2005) 142 TAX MAN 15 (AMRITSAR) (MAZ): OCCASION AND RELATIONSHIP WITH DONOR ARE IRRELEVANT. (IV) IN MRS. MAYAWATI VS. DCIT (2008) 19 SOT 460 (D ELHI) THE TRIBUNAL OBSERVED THAT THE AO HAD ALSO HIGHLIGHTED THE FACT THAT THERE WAS NO RELATIONSHIP BETWEEN THE DONOR AND DONEE AND THEREFORE THE GENUINENESS OF THE TRANSAC TION OF THE GIFTS WERE NOT PROVED. HERE IT MAY BE POINTED OUT THAT A GIFT MAY BE MADE TO A STRANGER. SECTION 123 OF THE TRANSFER OF PROPERTY ACT DOES NOT REQUIRE THAT GIFT S SHOULD BE MADE TO A RELATION ONLY. THUS THE AO HAD TAKEN AN INCORRECT VIEW OF LAW. 17. WE HAVE ALSO GONE THROUGH THE DECISION OF ITAT AGRA BENCH IN THE CASE OF MUKESH KUMAR AGARWAL IN ITA NO.110/AGR/2005 WHEREIN VIDE O RDER DATED 27.07.2005 THE HONBLE BENCH OBSERVED AS UNDER :- BEFORE PARTING I WOULD MERELY LIKE TO ADD THAT TH E CASE OF THE DEPARTMENT HAS NOT BEEN THAT THERE CAN BE NO GIFT BY A TRUST OR TH AT THE DONOR HAS PARTED WITH THE TRUST FUNDS IN FAVOUR OF THE ASSESSEE ALTHOUGH AT C LOSING ARGUMENTS WERE ADVANCED BY THE LEARNED D.R. IN THIS NATURE. IN THE FACTS AS THEY STAND PRESUMING FOR A MOMENT THAT THE DONOR HAS GIFTED AN AMOUNT FROM A T RUST FROM WHICH THE DONOR WAS NOT ENTITLED TO GIFT THEN THAT IS AN ISSUE WHIC H IS BETWEEN THE TRUST AND THE DONOR AND THE ASSESSEE FOR THE SAID TRANSGRESSION IF ANY CANNOT BE A FAULTED WITH. 18. WE HAVE ALSO GONE THROUGH THE DECISION IN THE C ASE OF MUKESH KUMAR AGARWAL IN ITA NO.312/AGR/2006 ON WHICH THE LD. A.R. HAS VEHEMENT LY RELIED IN WHICH VIDE ORDER DATED 16.10.2009 IN RESPECT OF SIMILAR GIFT GIVEN BY TRUS T IN WHICH SHRI D.K. AGARWAL WAS THE TRUSTEE THIS TRIBUNAL HAS HELD AS UNDER :- 10 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E FACTS OF THE CASE. THE ASSESSEE HAS SUBMITTED THE CONFIRMATION OF THE GIFT GIFT DEED BALANCE SHEET OF THE TRUST BANK ACCOUNT OF THE TRUST AND INCOME TAX PARTICULARS OF THE TRUST. SHRI D K AGARWAL THE DONOR WAS SUMMONED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE STATEMENT WAS RECORDED AND HE H AS CONFIRMED OF HAVING GIVEN THE GIFT. THE SOURCE OF THE SAID GIFTS HAVE BEEN EXPLAINED TO BE AN ACCOUNT PAYEE CHEQUE GIVEN FROM M/S. GIRRAJ JI TRUST. IN T HE REMAND REPORT IT HAS BEEN STATED BY THE AO THAT THERE IS A DEPOSIT OF RS.5.20 LACS IN THE BANK ACCOUNT OF M/S. GIRRAJ JI TRUST ON 16.04.01 BEFORE THE SAID GIFT OF RS.4.00 LACS WAS MADE. IT WAS ARGUED THAT THE SAID DEPOSIT OF RS.5.20 LACS IS A T RANSFER ENTRY AND NOT A DEPOSIT AND THE LD. CIT(A) HAS CONSIDERED THE SAME AS CASH DEPOSIT WHICH HAS VITIATED THE DECISION MAKING PROCESS OF THE LD. CIT(A) WAS ARGU ED BY THE LD. A.R. THE ASSESSEE IS REQUIRED TO PROVE THE IDENTITY CREDITW ORTHINESS AND GENUINENESS OF THE TRANSACTIONS. AS REGARDS THE IDENTITY THERE IS NO DISPUTE SINCE THE DONOR SHRI D K AGARWAL HAS APPEARED IN PERSON IN RESPONSE TO SUMMO N BY THE AO AND HAS CONFIRMED THE TRANSACTIONS IN THE STATEMENT RECORDE D. THE SOURCES OF THE SAID AMOUNT ARE THE AVAILABILITY OF FUNDS IN THE TRUST W HICH HAVE BEEN TRANSFERRED IN THE TRUST AT RS.5.20 LACS BEFORE THE DATE OF THE GI FT. IT HAS BEEN STATED THAT THE TRUST IS REGULARLY ASSESSED TO TAX AND INCOME TAX PARTICU LARS OF THE TRUST ARE ON RECORD. THEREFORE THE CREDITWORTHINESS OF THE GIFT CANNOT B E IN DOUBT. AS REGARDS THE GENUINENESS OF THE TRANSACTIONS AS OBSERVED HEREINB EFORE THE SAID GIFT HAVING BEEN CONFIRMED BY THE DONOR AND THE SOURCES HAVING BEEN EXPLAINED BUT THE DONOR COULD NOT STATE DURING THE COURSE OF THE STATEMENT THE FAMILY RELATIONSHIP WITH THE ASSESSEE OR THE OCCASION OF GIVING GIFT. IN THIS R EGARD THE RELIANCE HAS BEEN PLACED BY SHRI ANURAG SINHA ADVOCATE THE LD. COUN SEL FOR THE ASSESSEE ON THE DECISION OF HONBLE DELI HIGH COURT IN THE CASE OF CIT VS. MRS. SUNITA VACHANE SUPRA HONBLE GUJARAT HIGH COURT IN THE CASE OF MU RLIDHAR LOHARMAL VS. CIT SUPRA ITAT MMRITSAR BENCH DECISION IN THE CASE OF ACIT VS. MANOJ KUMAR SUPRA AND ITAT DELHI BENCH IN THE CASE OF MRS. MAYA WATI VS. DCIT SUPRA WHEREIN ALL THE CASES OCCASION AND RELATIONSHIP OF THE GIFTS ARE NOT RELEVANT IF OTHERWISE THE TRIBUNAL FINDS SUFFICIENT EVIDENCE RE GARDING GENUINENESS OF THE GIFT. IN THE PRESENT CASE WE ARE OF THE VIEW THAT THERE ARE SUFFICIENT EVIDENCES OF GENUINENESS OF THE GIFT AND THEREFORE IMPUGNED GIF T CANNOT BE SAID TO BE NON- GENUINE. THEREFORE IN SUCH CIRCUMSTANCES AND FACT S OF HE CASE AND THE AUTHORITIES RELIED UPON HEREINABOVE THE AO IS NOT JUSTIFIED IN TREATING THE SAID GIFT AS BOGUS AND THE SAME CANNOT BE TREATED AS INCOME O F THE ASSESSEE. THEREFORE THE ORDER OF THE LD. CIT(A) IS REVERSED ON THIS ISSUE. THUS THE APPEAL OF THE ASSESSES IS ALLOWED . 19. WE HAVE ALSO GONE THROUGH THE FOLLOWING CASES R EGARDING THE DISCHARGE OF THE BURDEN ON THE PART OF THE ASSESSEE AS RELIED BY THE LD. A.R. OBSERVATIONS MADE IN THESE CASES ARE GIVEN AS UNDER :- 11 (A) MRS. RANJANA KATIYAL VS. ACIT (2008) 113 TTJ (D ELHI) 479. THE ASSESSEE HAD FILED AFFIDAVIT FROM THE DONOR THEIR PAN COPIES OF RETU RN OF INCOME AND BANK ACCOUNT. ON THESE EVIDENCES THE TRIBUNAL HELD THAT THE ASSESSE E HAD DISCHARGED THE INITIAL BURDEN AND THEREFORE THE AO SHOULD HAVE MADE FURTHER ENQUIRY T O PROVE THAT THE CONDITION OF SECTION 68 WERE NOT SATISFIED. (B) IN MONNET ISPAT AND ENERGY LTD. VS. DCIT (2008) 171 TAXMAN 27 (DELHI) (MAZ.) THE TRIBUNAL ACCEPTED THE GENUINENESS OF CREDITS ON THE BASIS OF AFFIDAVIT CONFIRMATORY LETTER AND THE BANK ACCOUNT OF THE CREDITORS. (C) IN KAMAL MOTORS VS. CIT (2003) 131 TAXMAN 155 THE RAJASTHAN HIGH COURT OBSERVED THAT THE ONUS IS ON THE ASSESSEE TO SHOW THAT THE C REDITOR IS A MAN OF MEANS AND IDENTIFIABLE. WHEN A CREDITOR IS AN INCOME TAX ASSE SSEE IT CAN NOT BE SAID THAT HE CANNOT BE A MAN OF MEANS. THE CREDITWORTHINESS IS THUS EST ABLISHED. (D) CIT VS. ORISSA CORP. (P) LTD (1986) 159 ITR 78 (S.C.). LETTERS OF CONFIRMATION PARTICULARS OF CREDITORS AND INCOME TAX NUMBERS WER E FURNISHED. ADDITION NOT JUSTIFIED. (E) CIT VS. KAMAL JEET SINGH (2005) 147 TAXMAN 18 ( ALL). THE ASSESSEE WAS HELD TO HAVE DISCHARGED THE ONUS BY PLACING CONFIRMATORY LETTERS ; THEIR AFFIDAVITS THEIR FULL ADDRESS AND GIR NO. (F) SANSAR AUTOMOBILE VS. ITO (2005) 96 TTJ (JODH) 368). A DEPOSIT THROUGH ACCOUNT PAYEE CHEQUE IS A VERY GOOD PIECE OF EVIDENCE ESTABLISHIN G THE GENUINENESS OF THE TRANSACTION PROVIDED IDENTITY OF THE CREDITOR IS ESTABLISHED. W HEN THE IDENTITY OF THE CREDITOR IS VERY MUCH PROVED OR IS OBVIOUS AND IS NOT DOUBTED BY THE AO THE PAYMENT RECEIVED THROUGH ACCOUNT PAYEE CHEQUE BECOMES SACROSANCT. (G) THE HONBLE ITAT AGRA BENCH AGRA IN THE CASE OF ITO WARD-2 MATHURA VS. SMT. SUKHO DEVI IN ITA NO.1991/DEL./1994 (PAPER BOOK PAG ES 14 TO17) VIDE ORDER DATED 31/12/2003 HELD AS UNDER :- WE HAVE HEARD THE PARTIES AND PERUSED THE RECORDS OF THE CASE. WHEN A CASH CREDIT ENTRY APPEARS IN THE ASSESSEES BOOKS O F ACCOUNT IN AN ACCOUNTING YEAR THE ASSESSEE HAS OBLIGATION TO EXPL AIN THE TRANSACTION. IT WOULD APPEAR THAT IN THE INSTANT CASE IDENTITY OF B OTH THE DONORS IS NOT IN DISPUTE. BOTH THE DONORS ARE ASSESSED TO TAX AND TH E GIFT TAX RETURN FILED BY THEM HAS ALSO BEEN ACCEPTED BY THE DEPARTMENT. THE FACT THAT THERE HAS BEEN CASH DEPOSIT IN THEIR BANK ACCOUNTS PRIOR TO I SSUE OF THE CHEQUES TO THE ASSESSEE MAY BE A CAUSE FOR ENQUIRY IN THEIR HA NDS. IN CASE THE A.O. WAS NOT SATISFIED WITH THE CASH DEPOSITS MADE BY TH ESE TWO PERSONS IN THEIR BANK THE PROPER COURSE WOULD HAVE TO MAKE ASSESSME NT IN THE CASE OF THESE DONORS BY TREATING CASH DEPOSITS IN THEIR BAN K ACCOUNT AS UNEXPLAINED INVESTMENTS OF THESE DONORS UNDER SECTI ON 69 OF THE I.T. ACT. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT THE 12 ASSESSEE HAS DISCHARGED INITIAL ONUS OF PROVING THE IDENTITY OF THE CREDITORS THEIR TRANSACTION AND THE REVENUE HAS NO T BROUGHT ANY MATERIAL TO REBUT THE SAME. WE THEREFORE FIND NO INFIRMITY IN THE ORDER PASSED BY THE CIT(A). HENCE THE SAME IS UPHELD. (H) FURTHER IN THE CASE OF KULDEEP GOGIA VS. ITO I N ITA NO.297/AGRA/2004 (PAPER BOOK PAGES 18 TO 21) FOR A.Y. 2001-2002 THE HONBLE ITA T VIDE ORDER DATED 31/01/2005 OBSERVED AS UNDER:- IN THE INSTANT CASE THE ASSESSEE HAS PRODUCED THE COPY OF GIFT DEED AFFIDAVIT OF THE DONOR DETAILS OF ITS ASSESSING OF FICER SHOWING THAT THE DONOR IS AN EXISTING ASSESSEE. THEREFORE IN THE CI RCUMSTANCES WHEN SHE HAS CONFIRMED THE GIFT OF RS.1 00 000/- ADVANCED TO THE APPELLANT. COPY OF BANK ACCOUNT WAS ALSO FILED BEFORE THE ASSESSING OF FICER. COPY OF GIFT DEED AND AFFIDAVIT CONFIRMING THE ADVANCING OF GIFT WAS ALSO FILED. THEREFORE IN THESE CIRCUMSTANCES AND HAVING REGARD TO THE DECISI ON OF ITAT AGRA BENCH AGRA WE ARE OF THE VIEW THAT THERE IS NO SC OPE FOR ADDITION OF RS.1 00 000/- IN THE HANDS OF THE APPELLANT. HENCE THIS GROUND OF APPEAL IS ALLOWED . (I) HONBLE ITAT BANGALORE BENCH IN THE CASE OF IT O VS. N. SUNITHA REPORTED IN (2001) 70 TTJ (BANG.) 27 APPROVED THE ACTION OF THE LEARNED C IT(A) WHO DELETED THE ADDITION BY HOLDING THAT ASSESSEE RECEIVED GIFTS BY CHEQUES AN D THE DEPARTMENT HAS NOT ADDUCED ANY MATERIAL TO SUGGEST THAT THE MONEY THAT WERE DE POSITED IN THE BANK ACCOUNTS OF THE DONOR FLOWED FROM THE ASSESSEE. THE BENCH THEREFOR E CONCLUDED THAT GIFT COULD NOT BE TREATED AS UNEXPLAINED IN THE HANDS OF THE ASSESSEE . ADDITION THEREFORE RIGHTLY DELETED BY THE CIT(A). (J) SUPREME TYRES VS. ITO (2004) 1 SOT 406 (ASR). WHERE THE ASSESSEE HAD PRODUCED THE CREDITOR FOR EXAMINATION AND HIS STATEMENT WAS RECO RDED THE ASSESSEE WAS NOT REQUIRED TO PROVE THE SOURCE OF THE SOURCE. (K) BHAGWANDAS SHARDA VS. ACIT (2004) 82 TTJ (HYD) 982. THE LOAN TRANSACTION WAS THROUGH BANK BY ACCOUNT PAYEE CHEQUE. THE ASSESSEE WAS HELD TO HAVE DISCHARGED THE ONUS. IT IS NOT NECESSARY FOR THE ASSESSEE TO PROVE THE SOURCE OF THE SOURCE. (L) S. K. JAIN VS. ITO (2004) 2 SOT 579 (AGRA). AS KING FOR SOURCE OF DEPOSITS IN BANK ACCOUNT OF THE CREDITORS WOULD AMOUNT TO ASKING SOU RCE OF THE SOURCE. 20. IN VIEW OF THE AFORESAID CASE LAWS AND THE PROV ISIONS OF SECTION 68 SECTION 68 LAYS DOWN THE RULE OF EVIDENCE THAT WHEN ANY SUM IS FOUND CRE DITED IN THE BOOKS OF THE ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO E XPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CREDIT FOUND IN THE BOOKS OF THE ASSESSEE OR THE EX PLANATION OFFERED BY THE ASSESSEE IN THE OPINION 13 OF THE A.O. IS NOT SATISFACTORY THE SAME SO CREDIT ED MAY BE CHARGED TO INCOME TAX AS THE INCOME IF THE ASSESSEE OF THAT PREVIOUS YEAR. BEFORE CHARG ING THE CREDIT AS THE INCOME OF THE ASSESSEE THE AO HAS TO FORM AN OPINION. THIS OPIN ION IS SUBJECTIVE BUT IT HAS TO BE JUDICIOUS AND BASED ON MATERIAL ON RECORD. A N OPINION IS AN INFERENCE OF FACTS FROM OBSERVED FACTS. IT IS NOT AN IMPRESSION . IT IS A CONVICTION BASED ON APPRAISAL OF EVIDENCE ON RECORD. IN V.L.S. FINANCE LTD. V CIT (2000) 246 ITR 707 THE HONBLE DELHI HIGH COURT OBSERVED AS UNDER: OPINION MEANS SOMETHING MORE THAN MORE RETAILING OF GOSSIP OR HEARSAY; IT MEANS JUDGMENT OR BELIEF THAT IS A BE LIEF OR A CONVICTION RESULTING FROM WHAT ONE THINKS ON A PARTICULAR QUES TION. IT MEANS: JUDGMENT OR BELIEF BASED ON GROUNDS SHORT OF PROOF. IF A MAN IS TO FORM AN OPINION AND HIS OPINION IS TO GOVERN HE MUST FORM IT HIMSELF ON SUCH REASONS AND GROUNDS AS SEEM GOOD TO HIM. THUS BEFORE THE AO FORMS AN OPINION HE MUST CONSI DER THE MATERIAL BEFORE HIM. HE HAS BEFORE HIM THE MATERIAL SUBMITTED BY TH E ASSESSEE WHILE GIVING AN EXPLANATION THEN HE MUST COLLECT HIS OWN MATERIAL AS AN ENQUIRY OFFICER WEIGH THE TWO MATERIALS AND AS A QUASI-JUDICIAL AUTHORITY FORM AN OPINION AS TO WHETHER EXPLANATION FURNISHED BY THE ASSESSEE IS SATISFACTO RY OR NOT. IF THE AO DOES NOT APPLY HIS MIND IN EXAMINING THE DOCUMENTS FURNISHED BY THE ASSESSEE AND DOES NOT FIND ANY SUBSTANTIVE ERROR IN THEM NOR HE COLLE CTS ANY MATERIAL BY EXERCISING POWERS UNDER INCOME-TAX ACT THEN THE CLAIM OF THE ASSESSEE CANNOT BE STRAIGHTWAY REJECTED. IF HE DOES IT WOULD BE A VIO LATION OF PRINCIPLES OF NATURAL JUSTICE AND PROVISIONS OF SECTION 68. THE EXPRESSION THE ASSESSEE OFFERS NO EXPLANATION MEANS WHERE THE ASSESSEE OFFERS NO PROPER REASONABLE AND ACCEPTABLE EXPLANA TION AS REGARDS THE SUM FOUND CREDITED IN THE BOOKS OF ACCOUNT MAINTAINED B Y THE ASSESSEE. THE OPINION OF THE AO FOR NOT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEE AS NOT SATISFACTORY MUST BE BASED ON PROPER APPRECIATION O F THE MATERIAL AND OTHER SURROUNDING CIRCUMSTANCES AVAILABLE ON RECORD. THE OPINION OF THE AO IS TO BE BASED ON APPRECIATION OF THE MATERIAL ON RECORD. 14 21. THE WORD MAY USED IN SECTION 68 PROVIDES DISC RETION TO THE AO. IN GENERAL THE WORD MAY IS AN AUXILIARY VERB CLARIFY ING THE MEANING OF ANOTHER VERB OF EXPRESSING AN ABILITY CONTINGENCY POSSIBI LITY OR PROBABILITY. WHEN USED IN A STATUTE IN ITS ORDINARY SENSE THE WORD IS PERM ISSIVE AND NOT MANDATORY. BUT WHERE CERTAIN CONDITIONS ARE PROVIDED IN THE STATUT E AND ON THE FULFILLMENT THEREOF A DUTY IS CAST ON THE AUTHORITY CONCERNED T O TAKE AN ACTION THEN ON FULFILLMENT OF THOSE CONDITIONS THE WORD MAY TAKE THE CHARACTER OF SHALL AND THEN IT BECOMES MANDATORY. IN SECTION 68 WE FIND THAT THERE ARE NO SUCH CONDITIONS ON THE FULFILLMENT OF WHICH THE AO IS DU TY BOUND TO MAKE THE ADDITION. THE WORD MAY DENOTES THE DISCRETION OF THE AO THAT HE CAN MAKE AN ADDITION OR CAN NOT MAKE AN ADDITION. THE HON'BLE S UPREME COURT IN THE CASE OF CIT V SMT. P K NOORJAHAN 237 ITR 570 (SC) WHILE DEALING WITH THE WORD MAY IN SECTION 69 OBSERVED AS UNDER: 'IN THE CORRESPONDING CLAUSE OF THE BILL WHICH WAS INTRODUCED IN PARLIAMENT WHILE INSERTING SECTION 69 IN THE INCOM E-TAX ACT 1961 THE WORD 'SHALL' HAD BEEN USED BUT DURING THE COURSE OF CONSIDERATION OF THE BILL AND ON THE RECOMMENDATION OF THE SELECT COMMIT TEE THE SAID WORD WAS SUBSTITUTED BY THE WORD 'MAY'. THIS CLEARLY IND ICATES THAT THE INTENTION OF PARLIAMENT IN ENACTING SECTION 69 WAS TO CONFER A DISCRETION ON THE INCOME-TAX OFFICER IN THE MATTER OF TREATING THE SOURCE OF INVESTMENT WHICH HAS NOT BEEN SATISFACTORILY EXPLAI NED BY THE ASSESSEE AS THE INCOME OF THE ASSESSEE AND THE INCOME-TAX OFFIC ER IS NOT OBLIGED TO TREAT SUCH SOURCE OF INVESTMENT AS INCOME IN EVERY CASE WHERE THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE NOT SATISFACTORY. THE QUESTION WHETHER THE SOURCE OF THE INVESTMENT SHOUL D BE TREATED AS INCOME OR NOT UNDER SECTION 69 HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF EACH CASE. IN OTHER WORDS A DISCRETION HAS BEEN CO NFERRED ON THE INCOME- TAX OFFICER UNDER SECTION 69 OF THE ACT TO TREAT TH E SOURCE OF INVESTMENT AS THE INCOME OF THE ASSESSEE IF THE EXPLANATION OFFER ED BY THE ASSESSEE IS NOT FOUND SATISFACTORY AND THE SAID DISCRETION HAS TO B E EXERCISED KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE.' 22. THE EVIDENCE FILED BY THE ASSESSEE CLEARLY PROV ES THAT THE ASSESSEE HAS DULY DISCHARGED HIS ONUS SO FAR IT RELATES TO THE IDENTITY CREDITW ORTHINESS AND GENUINENESS OF THE TRANSACTION IS CONCERNED. THE ASSESSEE IS NOT REQUIRED TO PROVE S OURCE OF THE SOURCES. THERE IS NO EVIDENCE ON RECORD WHICH MAY PROVE THAT THE ASSESSEE HAS DEPOSI TED THE CASH IN THE BANK ACCOUNT OF THE 15 DONOR. APPARENT IS REAL. THE ONUS IS ON THE PARTY WHO ALLEGES THAT APPARENT IS NOT REAL. IN ANY CASE THE CASE OF THE ASSESSEE IS DULY COVERED BY T HE DECISION OF THIS BENCH IN THE CASE OF SHRI MUKESH KUMAR AGARWAL IN ITA NO.312/AGR/2006 IN WHIC H VIDE ORDER DATED 16.10.2009 SIMILAR GIFTS GIVEN BY SHRI D.K. AGARWAL BEING TRUSTEE OF THE TRUST WERE ACCEPTED TO BE GENUINE IN THE HANDS OF THE DONEES. THE DECISION OF THE CO-ORDINA TE BENCH IS BINDING ON US. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH WE DELETE THE ADDITION MADE BY THE A.O. UNDER SECTION 68 IN THE CASE OF EACH OF THE ASSESSEE. 23. IN THE RESULT APPEALS FILED BY THE RESPECTIVE ASSESSEES ARE ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 25.05.2010) . SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 25 TH MAY 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY