Genuine gift receipts supported by documentary evidence and donor confirmation cannot be added on mere suspicion.

Credible evidence of the donors' identity, financial capacity and the genuineness of gift transactions, supported by affidavits, gift-tax records, bank drafts and income-tax particulars, was sufficient to discharge the assessee's initial onus. Some donors were examined and confirmed the gifts, and the gifts were routed through banking channels and reflected in returns. As the revenue produced no material to rebut this evidence, mere suspicion or an unanswered verification exercise could not sustain the addition. The gift receipts were therefore treated as satisfactorily explained and the addition was deleted.

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Issues: Whether the addition made on account of alleged bogus gifts was sustainable when the assessee had produced affidavits, gift-tax returns, bank drafts, income-tax particulars, and the donors were either examined or their details were sent for verification.

Analysis: The assessee produced documentary evidence relating to the gifts, including affidavits, declarations, gift-tax challans, and income-tax records, and some donors were examined on oath and confirmed the transactions. The assessee established the identity of the donors and their capacity, while the gifts were made through banking channels and were reflected in the donors' returns. The revenue did not bring any material to rebut this evidence, and mere non-receipt of verification reports or suspicion could not displace the evidence already produced. The essential ingredients of a valid gift were found to be satisfied, and the assessee had discharged the initial onus.

Conclusion: The addition was rightly deleted and the gift receipts were held to be satisfactorily explained, in favour of the assessee.

Ratio Decidendi: Where the assessee produces credible evidence establishing the identity and capacity of the donors and the genuineness of the gift transactions, the revenue cannot make an addition merely on suspicion or on the basis of an unverified or unanswered departmental inquiry.

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