Genuine cash gifts from close relatives cannot be taxed as undisclosed income when supporting evidence is credible.

Cash gifts from close relatives were not treated as unexplained income where confirmatory letters were produced and the donors' relationship and financial capacity were not doubted. The absence of dates on the letters was insufficient to reject them, and the fact that the donors lived abroad and were not personally examined was not fatal on these facts. Once the gifts were accepted as genuine, the addition for undisclosed income could not stand, and the levy of interest under sections 139B and 217(1A) became consequential and did not survive.

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Issues: Whether the cash gifts received from close relatives could be treated as unexplained income from undisclosed sources, and whether interest under sections 139B and 217(1A) survived once the gifts were accepted as genuine.

Analysis: The assessee produced confirmatory letters from the alleged donors, who were close relatives staying abroad. The absence of dates on the letters was held insufficient to discard them, particularly when the donors' relationship with the assessee and their financial capacity were not doubted. In such circumstances, the fact that the donors were abroad and not personally examined was not treated as fatal. Once the gifts were accepted as genuine, the addition made on account of undisclosed income could not stand, and the levy of interest became merely consequential.

Conclusion: The gifts were held to be genuine and the addition was deleted. The levy of interest under sections 139B and 217(1A) did not survive.

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