GIFT FROM OUTSIDE INDIA

[manoj gupta]

An assessee has received gift of US $ 25000 from his father in law residing in Canada. His bank statement produced to the ITO during scrutiny assessment clearly shows that the money has been received from abroad in foreign currency. Still the ITO is not satisfied. He wants confirmation from Father in law about this gift and also the statement of account of father in law from which the money has been transferred. What are the powers of ITO in this regard. can he insist the production of confirmation of a person who is non resident in India and his bank statement.

[Surender Gupta]

If AO wish to ascertain the genuineness of the transaction, he can so under the provisions of the Income Tax Act, 1961. It is the duty of assessee to prove the genuineness of a transaction.

AI Summary

Burden of Proof: Revenue may verify genuineness of foreign gifts, and the onus to prove authenticity lies with the assessee.
The assessing officer may investigate the genuineness of receipts under the Income Tax Act, 1961, and the onus lies on the assessee to prove that a foreign-currency gift from a non-resident relative is bona fide by producing relevant documentary evidence and corroborative material.