Tribunal confirms undisclosed income addition, citing lack of evidence in donor relationship.

The Tribunal upheld the addition of Rs. 7,84,500 as undisclosed income, confirming the Assessing Officer's decision. The Tribunal found discrepancies in the assessee's statements and emphasized the lack of evidence establishing a genuine relationship with the donor. Without proof of the donor's identity, financial capacity, or the circumstances of the gift, the Tribunal deemed the addition justified and dismissed the appeal.

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Issues:
Confirmation of addition made of an amount of Rs. 7,84,500 with respect to NRE gift.

Analysis:
The Assessing Officer (AO) observed discrepancies in the assessee's statement regarding a gift received from a donor residing in the USA, which was invested in FDRs in Canara Bank. The AO questioned the authenticity of the gift due to lack of original declaration, gift deed, or confirmation from the donor. The AO added the entire amount as undisclosed income, leading to the appeal.

The CIT(A) rejected the appeal, emphasizing the lack of connection between the donor and the donee. The CIT(A) applied the doctrine of preponderance of probability, concluding that it was unlikely for the assessee to receive such a gift from an unknown person without legitimate reasons. The addition made by the AO was confirmed by the CIT(A).

In the further appeal, the assessee argued for the deletion of the addition, citing a Tribunal decision and asserting that the gift came through a banking channel from a school-time friend. The Departmental Representative supported the lower authorities' orders, emphasizing the lack of proof regarding the genuineness of the gift and the donor's identity.

The Tribunal upheld the CIT(A)'s decision, noting the discrepancies in the assessee's statements and the absence of evidence establishing a close relationship with the donor. The Tribunal emphasized the necessity to verify the circumstances under which the gift was made to ascertain its genuineness. Without proof of the donor's identity, financial capacity, or the circumstances of the gift, the Tribunal found the AO's action justified and dismissed the appeal, confirming the addition as undisclosed income.

Therefore, the Tribunal dismissed the appeal, upholding the addition of Rs. 7,84,500 as undisclosed income due to the lack of evidence supporting the genuineness of the gift and the identity of the donor.

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