2015 (2) TMI 504

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.... received from Arjun C. Waney was in the nature of gift in the hands of Shri Ramesh Suri and hence not taxable?" The undisputed facts are that one Mr. Arjun C Waney settled in United States, gifted an aggregate of $3 lakhs vide a letter dated 10.1.1984 to one Sh. Ashwani Suri. A letter and the other correspondence - which was placed on the record of the Income Tax Authority, directed the beneficiary Mr. Ashwani Suri to distribute the sum received in different proportions. The relevant extract of the letter reads as follows :           "As discussed I intend to make further gift of US $ 300,000 in favour of your various family members and M/s Divya International Pvt. Ltd. your family concern, wit....

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....m Sh. Ramesh Suri Ramesh to shri Waney regarding gift of $16000 iv) Letter dated 10.2.84 from Sh. Waney to Sh. Ashwani Suri regarding gift of $ 300000. v) Copy of advice of Bank of America, N. Delhi dated 28.9.84 to Sh. Ashwani Suri dercredit (sic) to his a/c." 3. The AO rejected the contentions of various assessees including the present assessee, and brought to tax a sum of Rs. 1,84,860/- being the equivalent of US Dollar 16,000 received, pursuant to Mr. Waney's directions to Mr. Ashwani Suri. The CIT(Appeals) upon being approached, considered the conspectus of circumstances and reversed the AO's decision holding as follows :            "The copies of correspondence on which the applian....

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....of genuineness. The learned counsel submitted that under Section 68, it is not only the identity of the person making the donation or giving the money which is to be looked into, but also the creditworthiness and the genuineness of the transaction. Counsel submitted that there was no explanation as to why Mr. Waney wished to make a donation. Although his relationship with Mr. Ashwani Suri was known, being his brother-in-law, the amounts to be disbursed in particular, to the assessee, were unknown. Equally, submitted counsel for the revenue, the creditworthiness of the donor was not made known and, in these circumstances, the assessee had to discharge the onus of discharging whether transaction was genuine. The revenue relied upon the decisi....

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....ly enables the AO to bring to tax amounts which are suspect, in a transaction of the present kind, where the identity and the relationship of the donor are known, the AO in our opinion ought not to have concluded that the transaction - by which the assessee received the amount of Rs. 1,84,860/- was ingenuine. 8. As far as the reliance placed on P. Mohanakala & Ors (supra) is concerned, this Court noticed that the findings of the AO and the CIT(Appeals) went against the assessee in that case; more importantly the donor had no relationship save a business connection with one of the donees. Furthermore, the statement of the parties i.e. the donees themselves, was inconsistent and secondly, the donor had operated through no less than three dif....