Section 68 gifts from brothers accepted where identity, capacity and genuineness were proved through passports and bank records.

Where gifts from close relatives were supported by passports, confirmations, NRE bank accounts and bank certificates, the assessee discharged the burden under section 68 by proving donor identity, capacity and genuineness of the transactions. The donors' relationship was corroborated, the account balances were sufficient, and the Revenue produced no tangible material to show that the credits represented the assessee's income. A demand for donor returns or foreign bank statements would have required proof of the source of source, which was not required on these facts. The addition as unexplained cash credits was therefore not sustainable and was deleted.

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Issues: Whether the addition made under section 68 of the Income-tax Act, 1961, on account of gifts received from the assessee's brothers was sustainable where the assessee had produced passports, confirmations, NRE bank accounts and bank certificates.

Analysis: The assessee was required to establish the identity of the donors, their capacity to make the gifts and the genuineness of the transactions. The record showed that the donors' identities were proved through their passports, the relationship of brothers and sister was corroborated by the passports and confirmations, and the gifts were routed through NRE accounts supported by bank certificates. The balances in the donor accounts were sufficient to cover the gifts, and the Revenue had no tangible material to show that the credits represented the assessee's income or that the gifts were not genuine. The demand for the donors' returns and foreign bank statements amounted to insisting upon proof of the source of source, which was not required on the facts.

Conclusion: The assessee had discharged the burden under section 68 and the gifts could not be treated as unexplained cash credits; the addition was not sustainable and stood deleted.

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