2012 (7) TMI 247 - AT - Income Tax

Addition u/s 68 - gift received from NRI friend - revenue contending assessee has not proved any evidence regarding creditworthiness and no occasion has also been mentioned for making gift - Held that - It is clear that the identity of the donor has been proved by filing identification card from Florida authorities and the notarised declaration. The donor has mentioned that he is engaged in service. The amount of US 3600 is not such a big amount that a serving person in USA cannot give it as a gift. Therefore, the creditworthiness of the donor has been proved. Since donor and donee have close relationship and, thus, it cannot be said that it is a gift to a total stranger so that it defies human probabilities of conduct. The gift has been made through banking channel, thus, its genuineness has also been proved. Hence, all the three ingredients of section 68/69 have been proved on a prima facie basis. Consequently it is held that the gift is genuine - Decided in favor of assessee.

Summary

Issues:
Challenge to notice u/s 148, addition of Rs.1,68,120 to total income, interest u/s 234A and 234B.

Analysis:
1. Challenge to Notice u/s 148: The appellant raised 7 grounds in the appeal, focusing on the addition of Rs.1,68,120 to the total income. The Ld. Counsel argued specifically on this issue, contesting the validity of the notice under section 148.

2. Addition of Amount to Total Income: The appellant received a gift of US$ 3600 (Rs.1,68,120) and provided supporting documents like driving license, foreign remittance certificate, and donor declaration. The Assessing Officer (AO) and CIT(A) questioned the genuineness, identity, and creditworthiness of the donor. The appellant argued that the gift was out of love and affection, supported by banking transactions and donor confirmation.

3. Interest u/s 234A and 234B: The interest charges under these sections were also contested in the appeal but were not elaborated upon in the judgment as the focus was primarily on the addition to total income.

4. Identity and Creditworthiness of Donor: The appellant presented evidence including donor identification, foreign remittance certificate, and notarized declaration. The appellant cited precedents where similar gifts were deemed genuine based on donor verification and income tax returns, emphasizing the relationship between the donor and donee.

5. Legal Precedents: The appellant and the Senior DR referenced various legal cases to support their arguments regarding the certification of documents, establishing the genuineness of gifts from non-resident donors, and the onus of proving identity and creditworthiness lying with the assessee.

6. Decision and Ruling: The Tribunal found that the appellant successfully proved the identity, creditworthiness, and genuineness of the gift through documentary evidence and donor declaration. The Tribunal compared the case to previous judgments where similar gifts were accepted as genuine, ultimately allowing the appeal and ruling in favor of the appellant.

This detailed analysis covers the issues raised in the appeal, the arguments presented by both parties, the legal precedents cited, and the final decision reached by the Tribunal in favor of the appellant.