AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (12) TMI 371
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "Whether a gift made by a stranger is valid in law when the capacity to give the gift is not disputed and even if the gift is treated as invalid could the amount be taken as income in the hands of the assessee?" For the assessment year 1990-91, foreign gifts had been received by the assessee from the donors (mentioned against each) from United Kingdom. The details are as under:- (i) Shri Puran Chand Sharma Rs.50,000/- (ii) Shri Vijay Kumar Rs.50,000/- (iii) Shri Kiran Kumar s/o Shri Vijay Kumar Rs.50,000/- Claim of the assessee that even though the donors were not related to the assessee by blood yet they were family friends and had capacity to pay, was not accepted by the Assessing Officer on the ground that there was no specific o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed. It is in these circumstances that the present appeal has been filed by the assessee. Stand of the appellant-assessee is that when there is no dispute regarding capacity of the donors qua payment made by way of gifts to the assessee and the assessee has also confirmed acceptance of such gifts, addition of such amount of gifts to income of the assessee, reversing order of Commissioner of Income Tax (Appeals) while upholding order of Assessing Officer by the Income Tax Appellate Tribunal is neither justified nor legal. Per contra, claim of the revenue is that there was neither any occasion nor there was any relationship of blood or otherwise justifying such gifts by donors to the assessee. It is vehemently claimed that capacity of donors....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assssee's contention that he received the above amounts as foreign gifts and that too from the distant family friends is absolutely not found to be reliable as true and correct. .... To me, it appears that the assessee has arranged the said transactions from the above alleged donors in the garb of gifts by suitably making to them the payments against the said foreign remittances, outside his books of account and as such, it appears to be a case of compensatory payments made for acquiring the alleged foreign remittances by way of gifts, by the assessee out of his income earned from undisclosed sources, for which circumstantial evidence exists. The assessee's case is also hit by the case of Lall Chand Kalra vs. CIT reported as (1987)22 CT....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in he stated that these foreign gifts by the donors does not appear to be genuine because the donors were neither related to the assessee nor there was any specific occasion for the donors for making such huge amount of gifts to the assessee. In our opinion, in the present circumstances, when the foreign donors, are not closely related to the assessee there was no specific occasion with the donors for making gifts to the assessee and his family members and so we do not find any justifiable reasons with the donor for making such huge amount of gifts of Rs.1,50,000/- to the assessee and more so when in addition to these very donor, have made foreign gifts of Rs.2,50,000/- to the brother, mother and sister-in-law of the assessee. We are furthe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcumstances, NRI gift from a stranger was held to be bogus relying upon earlier judgment of this Court in Lal Chand Kalra v. CIT (22 CTR 135) and judgment of Delhi High Court in Sajan Dass and Sons v. CIT (2003) 264 ITR 435. We are of the view that the Assessing Officer and the CIT (A) were justified in holding that the gift in question was bogus and the Tribunal committed patent error in accepting the gift as genuine. Admittedly, the donor had no relationship with the assessee. He had no occasion to give the gift. He was not produced. His financial capacity was not established. His bank statement was not produced. The Tribunal failed to appreciate these facts. It, thus, committed patent error of law in holding that the assessee discharged....