2003 (4) TMI 263

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....ilesh B. Jain who is an NRI resident in United States as detailed below: Donees US Dollars (Rupees equivalent) Chaganlal Sogmalji 6,850 2,14,199 Smt. Hansa Chaganlal W/o Sri Chaganlal 6,850 2,14,199 Pramod Kumar Chaganlal S/o Sri Chaganlal 6,790 2,11,792 Vasant Kumar Changanlal S/o Sri Chaganlal 6,790 2,11,792 2. During the assessment proceedings it was submitted by the assessee that the donor Shri Shailesh Jain was related to the donees being the son of Smt. Hansa's sister. He is a computer engineer living and working in U.S. for the past ten years. At the time of offering gift he was drawing salary of US $ 75,000 per annum. Sri Jain expressed his desire to give gifts and accordingly the assessees requested him to remit the....

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....and draft of J&K Bank Ltd., Pune branch, dt. 20th Sept., 1995. The sources of Rs. two lakhs and 15 per cent commission was admitted to be out of his unexplained cash balances. In view of this incident the AO, held that the family members of the assessee were in the habit of introducing their unexplained income into their capital account in the guise of bogus gifts. Accordingly, he disallowed the claim of gifts and added the same to the total income in his identical orders, dt. 27th March, 1997. 4. On appeal, the learned CIT(A) deleted the addition considering the facts that the donor Sri Jain was in fact related to the assessees and he had financial capacity to make the gift as he was earning gross remuneration of US $ 75,000 per annum as ....

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.... financial capacity to gift is also established. Thus the appellant has established by necessary evidence that the gift received from abroad is genuine." 5. Against such order the Department has filed the appeal under consideration. 6. During the course of hearing the learned Departmental Representative submitted that the AO, had treated the gift as bogus under valid reasons and, therefore, the CIT(A) was not justified to delete the same. On the other hand, the learned authorised representative of the assessee reiterated the arguments advanced before the lower authorities and relied on the order of the CIT(A). It was submitted that in the confirmation letter filed, Shri Jain had given his full name, his father's name, his residential addr....