Alleged gift from foreign citizen on his death based on undated nomination paper held bogus

Alleged gift from foreign citizen on his death held colouring device as it was based upon undated nomination paper not supported with any evidence

ABCAUS Case Law Citation:
ABCAUS 2570 (2018) (10) ITAT

Important Case Laws Cited/relied upon by the parties:

The Assessing Officer (AO) noticed that the assessee had made substantial investment in mutual fund and shares. On query, the assessee filed copy of bank account through which the investments were made. AO noticed that the assessee had received an amount from a person after his death, from United Kingdom (UK). The assessee claimed him his childhood friend like brother and treated the same as nontaxable income under the head “Income from other sources”.

The AO disbelieved the explanations of the assessee and proceeded to conclude that the assessee had used a colouring device to avoid payment of income-tax and failed to prove any personal intimacy with the payer and treated the same as income without any consideration and thereby added the same to the total income of the assessee.

CIT (A) partly allowed the appeal. Feeling aggrieved, the assessee approached the Tribunal.

The assessee contended that he had received the amount in question as a nominee after the death of his childhood friend, therefore the same was not liable to be taxed; that AO as well as CIT (A) wrongly treated the amount as income without consideration u/s 56(2)(vii)(a) which pertains to immovable property only whereas the assessee’s case was covered u/s 56(2)(vi).

The Tribunal opined that the nomination is shrouded by suspicious circumstances. It was observed that the nomination letter was undated, initially purported to be written in favour of two persons including assessee by recording their driving licence number but subsequently the name of assessee had been entered without his driving licence number or passport number etc. Even word “both” had been struck off and over-written with word “all”.

The Tribunal further opined that the alleged nomination was a vague and ambiguous document and did not inspire any confidence to believe it for the following reasons:

  • It did not disclose as to when it was executed.
  • Furthermore, the said person was a retired civil servant and he would have executed a Will in favour of the assessee bequeathing his movable assets in favour of the assessee, if he so desired.
  • Assessee had also not brought on record even in iota of evidence in the form of some photographs while attending the family functions etc. to prove his affinity or closeness with the doner.
  • The assessee had never ever visited him in UK.
  • The entire case was based on an undated nomination letter otherwise required to be executed in prescribed proforma.
  • Assessee had not produced any correspondence by way of text messages or letters between them to prove his childhood friendship

The Tribunal opined that in all probability and apparently the nomination paper was a colouring device to extract the undue benefit in collusion with the UK based Council.

The Tribunal dismissed the appeal

Download Full Judgment Click Here >>

----------- Similar Posts: -----------

Leave a Reply