Law:

Section:

I. Section 45 of the Income-tax Act, 1961 - Capital gains - Chargeable as - Assessment years 1999-2000 and 2000-01 - Where by impugned transaction no assets were owned by assessee and nothing was transferred, claim of capital loss could not be allowed [In favour of revenue] The assessee claimed to have entered into an agreement with a party and made advance of a sum for purchase of a land. Subsequently said agreement was cancelled and advance given by assessee was forfeited. This was claimed as 'short-term capital loss'. The Tribunal rejected the claim of the assessee observing that in the entire transaction of forfeiture of advances, no assets were owned by the assessee and nothing was transferred. Held that there was no infirmity in the impugned order of the Tribunal. Analogy used by the Tribunal and other adjudicating authorities could not be said to be conjectural in nature inasmuch as there was complete absence of original documents leading to establish genuineness of the transaction claimed to have been entered into by the assessee and the land owners. II. Section 68 of the Income-tax Act, 1961 - Cash credit - Assessment years 1999-2000 and 2000-01 - Where there was no relationship between donor and assessee nor was there any occasion for giving gifts in question to assessee and other surrounding circumstances created doubt regarding genuineness of gifts, same was rightly treated as unexplained cash credit [In favour of revenue] The assessee claimed to have received amount in question as gift from an NRI. The Assessing Officer having found that there was no relationship between donor and assessee nor there was any occasion to gift the huge amount to the assessee, treated the amount as unexplained cash credit. Held that illegal activities of firm of assessee, suspicious circumstances emerging from the material, non-availability of the donor personally, confirmation of his details not personally but by his father and huge amount of gift being sent to different persons including the assessee without any occasion and also without any relationship and connection of family of donor with the activities of the assessee, non-availability of details of activities…

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