Gift genuineness under section 68 requires proof of donor capacity and surrounding circumstances, not just identity and bank transfer.

In gift-related additions under section 68, donor identity and banking-channel transfers are relevant but not sufficient. The assessee must also prove the donor's financial capacity and the genuine nature of the gift on a holistic assessment of surrounding circumstances. Here, the donors' limited resources, lack of relationship or occasion, failure to produce them for examination, and the improbability of substantial gifts on the facts undermined genuineness under the test of human probabilities. The additions were therefore justified because the assessee did not discharge the burden of proving creditworthiness and genuineness.

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Issues: Whether the assessee had proved the identity, creditworthiness and genuineness of the gifts received so as to justify deletion of the additions made under section 68.

Analysis: The donor's identity and the movement of money through banking channels were held to be relevant but not sufficient by themselves. The decisive test was whether the assessee had discharged the burden of proving that the donors had the financial capacity to make the gifts and that the transactions were genuine on a wholesome appreciation of surrounding circumstances. The Court examined the income and asset position of the two donors whose additions had been deleted, the absence of any relationship or occasion for making large gifts, the failure to produce the donors for examination, and the improbability of substantial gifts being made by persons with limited resources and funds largely locked up elsewhere. Applying the test of human probabilities, the Court held that the surrounding circumstances undermined the genuineness of the gifts.

Conclusion: The assessee did not establish the genuineness and creditworthiness of the two gifts in question, and the deletion of the additions was unjustified.

Final Conclusion: The additions sustained by the Assessing Officer in respect of the disputed gifts were restored, and the revenue's appeal succeeded.

Ratio Decidendi: In a gift transaction, mere proof of donor identity and banking movement is insufficient; the assessee must also prove the donor's capacity and the real genuineness of the gift in light of surrounding circumstances and human probabilities.

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