GURBACHAN SINGH JAGGI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is assessee's appeal filed under Section 260A of the IT Act, 1961 (for brevity, 'the Act'), challenging order dt. 19th Jan., 2007, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Arnritsar (for brevity, 'the Tribunal') in ITA No. 147/Asr/1997, in respect of asst. yr. 1993 -94 (A -1), upholding order of the AC), dt. 29th March, 1996 (A -2) that the gift received by the daughter of the appellant is a taxable cash credit and addition of Rs. 1,90,000 was fully justified. Accordingly, the order passed by the CIT(A), dt. 11th Dec., 1996 (A -3). has been set aside. The assessee appellant has claimed that following substantial questions of law would arise for our determination:

(2.) BRIEF facts of the case are that the assessee appellant is a dealer in real estate being proprietor of M/s G.S. Traders. A search at his business and residential premises was carried on 17th Dec., 1993 and accordingly notices under Sections 142(1) and 143(2) of the Act were issued calling upon the assessee appellant to furnish his reply. The (AC) after enquiry from the assessee completed the assessment vide order dt. 29th March, 1996. Besides other discrepancies, the AO also found that the assessee's daughter Miss Dimpy Jaggi received a gift of Rs. 1,90,000 from Shri Natha Singh son of Shri Harnam Singh, residing at Hong Kong, with whom she has no relation. Statement of Shri Natha Singh was recorded and he specifically denied having made any gift to Miss Dimpy Jaggi. Accordingly, the AO made an addition of Rs. 1,90,000 on account of bogus gift in the income of the assessee respondent. It is appropriate to mention that certain other additions were also made in the income of the assessee appellant on different counts, however, the same are not subject -matter of challenge in the instant appeal. The AO assessed the net taxable income as Rs. 33,79,532 instead of Rs. 1,16,460 mentioned in the return which was initially filed and processed under Section 143(1)(a) of the Act.

(3.) HOWEVER , on further appeal to the Tribunal by the Revenue, the view taken by the CIT(A) on the issue of gift was reversed by holding as under: