GIFT FROM OUTSIDE INDIA

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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.

AI Summary

Income Tax Officer's Authority to Verify Gift Transactions from Non-Residents Under Income Tax Act, 1961 Clarified An individual received a gift of $25,000 from his father-in-law in Canada, which was documented in his bank statement during a tax assessment. However, the Income Tax Officer (ITO) was not satisfied and requested confirmation from the father-in-law and his bank statement. The query seeks to understand the ITO's authority to demand such documentation from a non-resident. The response clarifies that under the Income Tax Act, 1961, the Assessing Officer (AO) can verify the transaction's authenticity, and it is the assessee's responsibility to prove the transaction's genuineness.