TaxTMI 
TaxTMI 
2010 (6) TMI 872
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....14,276/- made by the Assessing Officer on account of unexplained gift of RBI Resurgent Bond. Ground nos. 2 to 8 are in the nature of arguments, hence, will be dealt while disposing of ground no.1 and no specific decision shall be given thereon. 4. The facts, in brief, are that the assessee received two gifts from one Shri Harish Wadhwa, an N.R.I. in the form of Resurgent India Bond worth US $ 50,000 each. The assessee claimed to have received the gifts of these two bonds on 16.6.2003, which were originally purchased by Shri Wadhwa on 31st October, 1998. The assessee also got these bonds encashed prematurely in the year under consideration. The AO, however, made detailed enquiries taking due from modus operandi of buying such Resurgent In....
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.... India Bonds Certificates duly transferred in the name of the assessee, covering letter of State Bank of India received by the assessee after transfer of these bonds in the name of the appellant. In the last document, which was issued by State Bank of India, the mode of transfer of these Resurgent India Bonds is categorically stated as "gift". I have also gone through a recent decision of Hon'ble Allahabad High Court in the case of Kanchansingh vs. CIT, (2009) 221 CTR (All) 456 which has been relied upon by the appellant. This decision is directly on the issue of gift of resurgent India Bonds. IN that case also four Resurgent India Bonds of 10000 US Dollars each were gifted by one NRI Shri Kishore Chhaganlal Kapadia to a Resident Indian....
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....s the year under consideration is concerned, the source and nature of deposit are fully established and the query with regard to the investment made in purchasing the bonds could be made only in the financial year 1998-99 relevant to the assessment year 1999-2000 and not in the year under consideration. (vii) After the amendment in s. 5(iiie) of the GT Act by the Finance (No. 2) Act of 1991, gift could be made to the person other than relatives also. The omission of the word 'relative' in the section shows that the amendment was made to promote the gift by NRI to the persons other than relatives to encourage inflow of foreign money in India through gifts. (viii). Sri. K.C. Kapadia, by confirmatory letter dt. 8th Fe....
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....s been taken away. The omission of the word 'relative' in the Section 5(iie) of the G. T. Act shows that the amendment was made to promote the gift by NRI to the person other than relatives to encourage in flow of foreign money in India through gift. Thus, it was not necessary that NRI could make gift of bonds to the relatives only. There is no evidence to support the AO's view that equivalent amount had passed on assessee to Shri Harish Wadhwa. Having considered the facts and the circumstances of the case and following the direct decision available on the issue I the case of Kanchan Singh vs. CIT (2009) 221 CTR (All) 456, it is held that the AO was not justified in treating the maturity amount of Rs. 65,14,276/- of the two Resurgent India ....