IN HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No.32 of 2000 Date of Decision: 17.11.2014 Commissioner of Inocme Tax (Central), Ludhiana .....Appellant Versus Smt. Nirmal Kohli ....Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE B.S. WALIA Present: Mr. Rajesh Katoch, Advocate, for appellant. Mr. Salil Kapoor, Advocate, with Mr. Vikas Jain, Advocate, for respondent. **** RAJIVE BHALLA, J (ORAL) Revenue is before us challenging order dated 29.07.1999 passed by Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as Tribunal ) whereby assessee has been granted benefit of Rs.81,941/- on account of past savings, while affirming addition of Rs.1,50,000/- on account of unexplained gifts. question of law framed by Revenue reads as follows:- Whether, on facts and in circumstances of case, ITAT was right in law in restricting Addition totalling Rs.2,31,941/- made VINAY 2015.01.09 17:56 I attest to accuracy and integrity of this document Punjab & Haryana High Court, Chandigarh ITA No.32 of 2000 -2- on account of non-genuine Gifts only to Rs.1,50,000/- by considering peak of Bank Account where such Gifts were credited and after allowing benefit of Past Savings? Counsel for revenue submits that as assessee was assessed for block period 1987-88 there was no reason to consider peak of bank account and grant of benefit of past saving. impugned order, being illegal and arbitrary, may be set aside. Counsel for respondent submits that apart from fact that question so framed is neither substantial nor question of law, quantum is too small. It is also contended that as discretion exercised by Tribunal is neither arbitrary nor perverse and is based upon clear and cogent reason, appeal may be dismissed. We have heard counsel for parties and perused impugned order. relevant extract from order reads as under:- 2.4 We have taken due consideration to submissions made before us by both sides. first observation to be decided whether gifts are genuine or not. material before us does not give us confidence to treat these gifts as genuine one. It is true that gifts have been deposited in bank account. But sofar Smt.Lata Khurana's VINAY 2015.01.09 17:56 I attest to accuracy and integrity of this document Punjab & Haryana High Court, Chandigarh ITA No.32 of 2000 -3- statement is concerned that clearly shows that gift is not genuine gift. Ld. Counsel of appellant has taken legal stand that gifts were received outside taxable territory and as such same could not be treated as income. This argument of Ld. Counsel is not accepted because we are looking into genuineness of credit which is received modus-operandi draft or cash being credited in bank account as gift. For acceptance of gifts identification, genuineness and credit worthiness are important ingredients and all three ingredients are to be used simultaneously. However, we in agreement with Ld. Counsel that since all gifts are credited in Bank Account and Bank Account is having peak to extent of Rs.2,09,240/- and addition can be made only to extent of peak amount i.e. Rs.2,09,240/-. second arguments given by Ld. Counsel relates to benefit of assessed income whereby only explained investment is to tune of Rs.1,10,000/-. argument of Ld. Counsel is partly correct but he has not given benefit to domestic withdrawals. domestic withdrawals even though have been shown by other family members but reasonable estimate is required and to our mind same for Block Period will be to tune of Rs.40,000/-. We, therefore, give benefit for past savings out of assessed income to tune of Rs.2,31,941/- - Rs.1,50,000/- = Rs.81,941/-. addition of Rs.1,50,000/- is accordingly confirmed. perusal of aforesaid extract reveals that assessee has been granted benefit of Rs.81,941/- while confirming addition of Rs.1,50,000/- by referring to VINAY 2015.01.09 17:56 I attest to accuracy and integrity of this document Punjab & Haryana High Court, Chandigarh ITA No.32 of 2000 -4- peak of bank account and granting benefit of past savings. Tribunal has assigned clear and cogent reasons for considering peak value of bank accounts and granting benefit of past savings. Even otherwise, tax effect is only Rs.49,164/-. In view of what is recorded hereinabove, we find no error of jurisdiction and while answering question of law against revenue, dismiss appeal. [ RAJIVE BHALLA ] JUDGE [ B.S. WALIA ] JUDGE 17.11.2014 Vinay VINAY 2015.01.09 17:56 I attest to accuracy and integrity of this document Punjab & Haryana High Court, Chandigarh Commissioner of Inocme-tax (Central), Ludhiana v. Smt. Nirmal Kohli