Revocable transfer treated as temporary receipt, so tax addition under section 56(2)(v) was deleted.

A transfer described as a "gift" was treated as revocable at the donor's instance, and the recipient later repaid the amount after revocation notices. Read as a whole, the document showed no absolute transfer of ownership, so the receipt was characterised as a temporary arrangement rather than a completed gift or unexplained income. On that basis, taxation under section 56(2)(v) was not sustainable and the addition was deleted.

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Issues: Whether the sum of Rs. 5 lakhs received by the assessee could be taxed under section 56(2)(v) of the Income-tax Act, 1961 when the transfer document showed the amount as revocable at the donor's instance and the amount was later repaid on revocation.

Analysis: The transfer document was read as a whole and showed that, despite the nomenclature of "gift," the money was intended to remain subject to revocation by the donor. The subsequent revocation notices and the actual repayment of the amount supported the conclusion that the assessee never obtained absolute ownership of the money. The transaction was therefore not to be judged merely by its label. The source of the receipt was also not in dispute, and the facts showed a temporary transfer rather than a completed gift or unexplained receipt.

Conclusion: The addition under section 56(2)(v) was unsustainable and was deleted; the assessee succeeded on the issue.

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