INDU JAIN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This appeal, by the assessee, under Section 260A of the IT Act, 1961 (for short, 'the Act') is directed against order, dt. 27th Feb., 2006, passed by the Income -tax Appellate Tribunal, Chandigarh Bench 'A' (for short, 'the Tribunal') in ITA No. 977/Chd/2004, pertaining to the asst. yr. 2001 -02.

(2.) BRIEFLY stated, the background facts, giving rise to the present appeal are as follows : During the course of assessment proceedings, for the relevant assessment year, the AO noticed that the assessee had received gifts of Rs. 9.5 lakhs from her husband and Rs. 11 lakhs from one Shri Ashwani Kumar Goel, a non -resident. The AO accepted the gift, stated to have been received from the husband. As regards the gift of Rs. 11 lakhs, it was stated by the assessee that the said Shri Ashwani Kumar Goel, a resident of Dubai, is her 'Rakhi Bandh Bhai' and he had made the gift to her by means of a cheque dt. 22nd April, 2000 issued from a Non -resident External Account (for short, 'NRE account'). Upon scrutiny of bank statement, summoned under Section 133(6) of the Act, the AO discovered that on 1st Jan., 2000, the opening balance in the said NRE account was Rs. 28,654.41; by credit entry of interest, the balance increased to Rs. 29,105.41; there was a credit entry of Rs. 10,98,800 on 20th April, 2000; on 22nd April, 2000, a cheque in the sum of Rs. 11 lakhs was issued from the account in favour of the assessee and in seven months, only one transaction had taken place in the said account. The statement of the assessee was recorded by the AO. Inter alia, observing that the donor not being related to the assessee, it did not stand to any logic that he would gift an amount of Rs. 11 lakhs to her; the credentials and financial status of the donor remained unproved in the absence of his examination and the nature of transactions in the NRE account showed that it was only an accommodation entry, the AO held that the gift was not genuine. Since the said amount was utilised for purchase of the house, the AO treated the investment of the said amount as unexplained and added it in her total income as income from undisclosed sources.

(3.) NOT being satisfied with the decision of the CIT(A), the Revenue carried the -matter in further appeal to the Tribunal. By the impugned order, the Tribunal has allowed the appeal and remanded the case back to the AO for fresh adjudication in regard to the capacity of the donor. Hence, the present appeal.