Court No. - 35 Case :- INCOME TAX APPEAL No. - 237 of 2011 Appellant :- Sunil Kumar Rastogi Respondent :- Commissioner Of Income Tax, Meerut And Anr. Counsel for Appellant :- Rakesh Ranjan Agarwal,Suyash Agarwal Counsel for Respondent :- C.S.C.,A.N.Mahajan,Gaurav Mahajan,S.S.C. I.T. Hon'ble Bharati Sapru,J. Hon'ble Saumitra Dayal Singh,J. Heard Shri Suyash Agrawal, learned counsel for appellant and Shri Gaurav Mahajan, learned counsel for department. This appeal has been filed by assessee under Section 260A of Income Tax Act (hereinafter referred to as 'Act') against order of Income Tax Appellate Tribunal dated 10.11.2006 for assessment year 2001-02. This appeal has been admitted on 17.03.2010 on questions of law (A) and (E), which are quoted as below: '(A) Whether on facts and circumstances of case, Income Tax Appellate Tribunal was confirmed action of CIT invoking jurisdiction under Section 263 of Income Tax Act on facts and circumstances of case? (E) Whether Income Tax Appellate Tribunal rightly not considered that interest under Section 234 A, 234B and 234 C of Income Tax Act was payable by appellant in proceedings under Section 263 of Income Tax Act?" In short, during previous year relevant to assessment year 2001-02, assessee had received two gifts of Rs.75,000/- each. It appears, assessing authority doubted correctness of claim of gifts during course of assessment proceedings. donors Anil Kumar and Indu Bhushan confirmed fact of having advanced gift of Rs.75,000/- each. They also claimed to have established that gifts were given through cheque payments and same were reflected in their books of account. Also it was explained that donors acquired money through sale of immovable properties. Assessing Officer did not make any further inquiry and accepted factum of gifts. Thereafter, Commissioner of Income Tax initiated proceedings under Section 263 of Act. In his opinion Assessing Officer should have made further inquiries so as to examine source from where donors acquired money from which gifts were made to assessee. In this regard Commissioner noted that donors had stated before Assessing Officer that they had come into possession of money through execution of sale deeds of their immovable properties. According to Commissioner, Assessing Officer should have called for copies of sale deeds etc. before accepting gifts. Thereafter, relying upon certain judgments on scope of proceedings under Section 263 of Act, Commissioner directed addition of Rs.1 lac to be made. Against order passed under Section 263 of Act, assessee filed appeal before Tribunal which has been dismissed, giving rise to present appeal. Learned counsel for petitioner submits that admittedly it is case where Assessing Officer had accepted gifts after conducting proper inquiry into matter. In that inquiry donors had been examined. They had confirmed fact of giving gifts to assessee and said gifts were also shown to have been given through banking channel. Further, amounts were found to have been recorded in books of account of donors. Therefore, assessing officer did not make any mistake in accepting gifts. Learned counsel for petitioner further submits that reasoning of CIT cannot be sustained as he has provided for addition to be made in exercise of power under Section 263 of Act solely on reasoning, according to him further inquiries should have been conducted by Assessing Officer. In this regard reliance has been placed on judgment of this Court in case of Commissioner of Income Tax Vs. Krishna Capbox (P.) Ltd reported in [2015] 372 ITR 310 (Allahabad). In para 9 of judgment, it was held as below:- " Tribunal further considered question whether discussion of queries and reply received from assessee, in assessment order, is necessary or not. Relying on two judgments of Delhi High Court in CIT v. Vikas Polymers [2012 341 ITR 537/[2010] 194 Taxman 57 and CIT v. Vodafone Essar South Ltd. [2012] 28 taxmann.com 273/[2013] 212 Taxman 184 (Delhi), it held that once inquiry was made, mere non-discussion or non- mention thereof in assessment order cannot lead to assumption that Assessing Officer did not apply his mind or that he has not made inquiry on subject and this would not justify interference by Commissioner by issuing notice under Section 263 of Act." Opposing appeal, Shri Gaurav Mahajan, learned counsel for department submits that burden to establish that gifts were genuine was on assessee and that burden was not discharged by assessee. Therefore, in his submission CIT was right in directing for addition to be made. Having considered argument so advanced, we find that clearly inquiry had been conducted by Assessing Officer on material aspect of transaction. identity of donors, as also genuineness of transaction and creditworthiness of donors had been questioned by Assessing Officer. As to identity of donors and genuineness of transaction there is no dispute and CIT has also not doubted correctness of approach for finding reached by Assessing Officer. only doubt that has been created is as to creditworthiness of donors. In this regard we find that Assessing Officer had questioned donors as to source of money from which gifts had been made to assessee. donors on their part explained that money had come to them upon sale of certain properties. Thus, inquiry had been made by Assessing Officer and conclusion drawn by him is consistent with information provided by donors. It cannot also be lost sight of that amount of donation is only Rs.75,000/- for each gift. Thus, total disputed amount is only Rs.1,50,000/-. Looking into peculiar facts of case where certain inquiry appears to have been made pertinent to issue in hand and conclusion drawn by Assessing Officer was consistent that material that came on record as result of those inquires and total amount itself be small, we find that in view of judgment of this Court in case of Krishna Capbox(supra), reasoning of CIT that further inquiry should have been conducted by Assessing Officer cannot be sustained. order dated 10.11.2006 is set aside. question 'A' is answered in favour of assessee and against revenue. In that view of matter, question 'E' is rendered academic. appeal is accordingly allowed. Order Date :- 22.11.2017 pks Sunil Kumar Rastogi v. Commissioner of Income-tax, Meerut and Anr