2014 (5) TMI 968

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....ity, 'the Tribunal') in ITA No.655/Chandi/2001 in respect of assessment year 1995-96. 2. The following question of law would emanate from the order of the Tribunal for determination by this Court:- "Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in holding the foreign gifts of Rs. 2.60 lakhs received by the assessee as genuine, though the financial capability of the donors, their identity, relations with the assessee and occasion to gift have not been proved at any stage, either at the assessment stage or at the appellate stage?" 3. Shortly put, the facts of the case are that for the assessment year 1995-96, the assessee filed the return. His income from certain sources were doubted by....

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....e instant appeal. 6. We have heard the learned counsel for the appellant - revenue as well as for the respondent and have perused the paper-book carefully. 7. The Assessing Officer while ordering addition took note of the fact that the donors were not related to the donee and there was no occasion for them to make the gift. The Assessing Officer observed that the financial capacity of the donors was not established and there existed no plausible reasons to part with the hard earned money. Consequently, it held that the gift was not genuine. It has come on record that both of them were having no blood relations. It was a NRI gift from a person other than a relation and it could not be said to be genuine or valid nor out of love and aff....

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....ad 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 onus on him to prove the genuineness of the gift. Its order is, thus, perverse. In identical situation, this Court held that NRI gift could not be accepted as genuine unless the assessee was able to prove natural love and affection and financial capacity of the donor. Observations of this Court in Jaspal Singh are:- "It is well settled that mere identification of donor and showing the movement of gift amount through banking channel is not enough to prove genuineness of the gift. T....