2008 (9) TMI 409

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....leting the addition made on account of gifts taxed under s. 68 of the Act as the genuineness of the transaction and the creditworthiness of the donors were not proved. 4. The facts that led to this appeal are that the assessee derives salary income from Apollo Tyres Ltd. and had offered the same to tax. He had also declared loss from M/s U.S. Oberoi & Co. which was doing the business of sale and purchase of shares and securities. In the course of assessment proceedings it was noticed that the assessee had shown gifts having been received to an extent of Rs. 16,41,080. The same has been shown in the capital account of the assessee. It was noticed that the assessee has received the gifts as follows: -----------------------------------------....

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....assessee has also produced the photograph of the assessee with the family of one of the donors. The assessing authority had found various defects in the affidavit produced insofar as some of the affidavits were undated and there were no witnesses to the affidavits. As a consequence to the defects in the affidavits produced the assessing authority held that the gifts as received by the assessee from the NRI to the extent of Rs. 16,41,080 bogus and consequently, the same were assessed as income from undisclosed sources by invoking the provisions of s. 68 of the Act. Aggrieved, the assessee filed first appeal to the CIT(A) who after calling for remand report from the AO in regard to the submissions made by the assessee held that the AO had not....

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....id donor filed inUSA. He further drew attention to p. 73 of the paper book which was a copy of the letter from Shri Veer Bahadur Sahni confirming the gift to the assessee; at p. 76 was a copy of the return of the said donor filed inUK. At p. 81 was a letter from Mr. O.P. Gupta. He further drew attention to pp. 35 and 36 of the paper book which were letters addressed to the AO giving the names, complete addresses, amount of gifts and the name of the bank through which the transaction had taken place. He further drew attention to p. 91 which was a copy of the photograph of the assessee with a family of Dr. I.A. Duadi. He further drew attention to pp. 92 and 93 of the paper book which was copy of the remand report of the assessing authority wh....

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....he has found fault with the IT returns which have been produced, belonging to the donors. Obviously, what should be noticed here is that unless a person is known, normally, nobody would part with copies of their IT returns or copies of the passports. The fact that the assessee has been able to produce the copies of the IT returns of all the donors which have been filed in UK/USA as also the copies of their passports would show that there is a close friendship/relationship between the assessee and the donors. The Revenue has also not disputed the facts of the photograph of the assessee with the family of Dr. Duadi. The AO has only been finding fault with the affidavit as produced and none of the other evidences has been faulted with. Further....