Higher authority upholds decision that assessing officer's bank inquiries legitimately cast doubt on genuineness of alleged unrelated gift

HC upheld the Tribunal's factual findings that the Assessing Officer's inquiries, including bank verification, legitimately cast doubt on the genuineness of the alleged gift from an unrelated third party. The court found no merit in the claim that the assessee was denied a proper opportunity to prove the gift, and concluded the Tribunal's conclusions warranted no interference. The challenge to the assessment was therefore dismissed.

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Issues: Whether the sum of Rs. 3 lakhs received and claimed as a gift was proved to be a genuine gift and whether the assessee discharged the onus under sections 68 and 69 of the Income-tax Act, 1961 thereby precluding the addition of the amount as income from undisclosed sources.

Analysis: The matter involves examination of the documentary and testimonial foundation for the claimed gift, including identification and capacity of the donor, bank transaction trail, affidavit and gift deed attestation, conformity of signatures, and statements attributed to the donor denying the transaction. The legal framework requires that where a taxpayer claims receipt as a gift, the onus is on the taxpayer to establish the identity and capacity of the donor and the genuineness of the transaction; unexplained or contradictory material, adverse enquiries by the tax authority, discrepancies in notarisation and signature comparison, and denial by the purported donor materially affect the satisfaction of that onus. Procedural opportunities to produce evidence and responses to inquiries are relevant to whether the assessee had a fair chance to substantiate the claim.

Conclusion: The factual findings that the gift was not satisfactorily proved are upheld and the addition of Rs. 3 lakhs as income from undisclosed sources is sustained; the assessee failed to discharge the onus under sections 68 and 69 and the appellate challenge does not raise a substantial question of law in favour of the assessee.

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