Case Law Details
RELEVANT PARAGRAPH
7. Parties are heard arid their rival submissions considered. The following facts are not in dispute: a) the identity of the donor is not in doubt; b) gift is by a declaration deed; c) donor has given an affidavit affirming the making of the gift; d) there is a confirmation through post of gift per Demand Draft; e) affirmation of the assessee in examination on oath recorded by A.0 f) affirmation of the donor in examination on oath recorded; g) direct reply of the donor to the A.O confirming the gift; h) donor is stated to be a friend of assessee’s father; i) donor was doing some finance business; and j) source of the gift is the receipt through a cheque of Rs.2,46,000 received by die donor from the Balaji Trading Corporation, Delhi, and a cash amount of Rs.3500. 8. All these facts establish the fact that a gilt was received by the assessee and the sources thereof are satisfactorily explainable and proved putting its genuineness beyond doubt. 9. The adverse facts as pointed out by the Id. Accountant Member i) that the assessee or his family had never made any gift of any amount to anybody; ii) that the gift was not on any occasion or function; iii) that the donor visited his house one or two times though, never beyond the drawing room; iv) that the donor is the person of low financial status having monthly income of less than Rs.5,000/- and has shown withdrawals from his capital account less than Rs.3000/- per month; v) that the donor has no house no telephone number, no fixed deposit and not any other immoveable assets; or that the original deposit by the donor of Rs. 1,25,000 with Balaji Trading Corp. was not proved are not so material to hold the gift not a genuine one or sources thereof unsatisfactory so long as the immediate source of the gift is admittedly established to be from a third party, the donor had appeared in person before the AO and confirmed he making of the gift and the reasons which persuaded him to make the gift, he being the friend of the assessee’s father who helped him in past 10. Section 68 provides for charging the sum credited in the assessee’s books of account as income of the assessee if the assessee offers no explanation about the nature and sources of the sum so credited or if the explanation offered by the assessee thereof is not satisfactory. On the facts and circumstances as narrated above, in my opinion, are such as satisfactorily explains the nature and sources of the credit by way of gift. In view of the above the gift in my opinion cannot be said to be credit the sources of which are not explained satisfactorily. It is genuine gift and the assessee has proved its sources satisfactory. 11. In my opinion therefore the impugned gift, in the given facts and circumstances of the case is a genuine gift and consequently no addition thereof can be made to the income of the assessee as income from other sources under section 68 of the Act.
