AIT-2007-239-ITAT

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C DELHI) BEFORE SHRI D.R. SINGH AND SHRI RAJENDRA SINGH ITA NO. 3495(Del)04 Assessment year : 2001-02

Asstt. Commissioner of Income Tax,

Circle 31(1), New Delhi. Appellant Appellant by Respondent by : :

Vs.

Shri Rajeev Tandon,

Defence Colony, New Delhi. Respondent

Shri P.K. Prusty, Sr. DR Shri P.J. Khanna, CA

AIT Head Note: cash credits of Rs. 3,66,242/- introduced by the assessee in his books by way of gifts -question requires to be determined by us is whether the amount received by the assessee was genuinely received as gift. In this regard we may mention that undisputedly the donors had no occasion for making gifts of such huge amounts to the assessee. Further, the donors were not related to the assessee. The another question which remained unanswered in the entire case, either by the assessee or by the donors is, as to why the donors parted with such huge amounts by gifting the same to the assessee merely out of love and affection depicted through letters when neither there was any occasion nor they were related to the assessee nor there was any reciprocity between them regarding exchange of such gifts. Now, the simple question which arises in mind is whether it is humanly probable that a person may give away his hard earned money, earned in foreign country, as a gift to an Indian acquaintance merely out of love and affection when that Indian is not related to him and that NRI donor has no occasion or giving the amount in gift. If we put this question to any human being having a normal human behaviour the obvious answer would be no. Therefore, applying the test of human probabilities, as laid down by the Apex Court in the cases (Supra), the AO was fully justified in coming to a conclusion that these were bogus gifts made by the donors to the assessee, which was assessees own unexplained money routed through the donors simply to increase the capital of the assessee to enable the assessee to purchase the house for a sum of Rs. 47.5 lakhs. The AO was further justified in treating the gifts as not genuine and adding the same to the income of the assessee u/s 68 of Income Tax Act, 1961 as income from other sources. (Para 25) O R D E R

PER D.R. SINGH, J.M.

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The revenue has filed this appeal against the order of CIT(A) passed in appeal No. 407/03-04 dated 20.5.2004 on the following ground:On the facts and circumstances of the case, the ld. CIT(A) erred in not upholding the finding of the AO that cash credits of Rs. 3,66,242/- introduced by the assessee in his books by way of gifts remained unexplained and were, therefore, liable to be taxed as his deemed income u/s 68 of the I.T. Act. 2.Briefly stated the facts relating to the disposal of this ground of appeal are that the assessee, Shri Rajeev Tandon is a partner in a firm selling sarees and during the year under consideration he received two gifts amounting to Rs. 34,66,242/- from two NRIs Shri P.B. Bhardwaj Rs. 30,04,300/- ($ 65,000) and Shri Surender Khoka Rs. 4,61,942/- ($ 10,000). The AO noticed that these persons who made the gifts to the assessee were not related to the assessee. So he asked the assessee to file evidence regarding the credit worthiness of these persons.. The assessee filed two gift letters written by the donors of the gift, copy of telegraphic transfer credit advisers indicating the receipt of these payments by the assessee, a certificate from M/s. P.S. J, Alexander & Co., the CA of the donor Shri P.B. Bhardwaj, mentioning that Shri P.B. Bhardwaj was a man of substantial wealth, a copy of the bank statement from which the gift amount was claimed to have been paid in support of the credit-worthiness of Shri Surender Khoka. After considering these documents and submissions of the assessee the AO held these gifts to be bogus as according to the AO this was assessees own unexplained money routed through these persons to increase the capital of the assessee to purchase a house which was purchased for a sum of Rs. 47.5 lakhs on the reasoning that these donors were not related to the assessee; that these gifts were not received on any occasion but were received by the assessee because he needed the money to purchase a house and these donors wanted to help the assessee; that the credit worthiness of Surender Khoka, donor, whose bank statement was filed only to show that he had a maximum balance of 23,036$ out of which he gifted 10,000 $ to the assessee; that 10,000 $ were withdrawn by the donor Shri Surender Khoka on 12.2.2001 for making the gift and the same amount of 10,000 $ was deposited in his account on 22.2.2001; that in the case of donor Shri P.B. Bhardwaj, except a letter from the company of the Chartered Accountant, which mentioned that Shri Bhardwaj was well placed, no other evidence regarding the credit worthiness of Shri P.B. Bhardwaj was filed by the assessee before him. 3.Aggrieved with the order of the AO the assessee filed an appeal before the CIT(A) and contended before him that in order to establish the identity of the donors, their status and capacity to make such remittances has filed on behalf of the donor Shri P.B.Bhardwaj gift letters, certificate of forward/inward remittances from HSBC, Telegraphic transfer credit advice from HSBC, certificate of Tax Consultant regarding credit worthiness, certificate of gift, copy of pass-port and in case of donor Sri Surender Khoka the assessee filed gift declaration duly notarized, transfer of fund request and copy of foreign bank statement showing withdrawal in addition to gift letter, certificate of foreign inward remittances, telegraphic transfer credit advice. He further contended before the CIT(A) that in the absence of any contradictory or adverse material on record the Department was not justified to make the impugned addition merely on the basis of surmises and conjectures.

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4.The learned Cit(A) after considering these submissions of the assessee, examining the documents filed on record by the assessee, the decisions of Gauhati High Court reported in 264 ITR 254, Apex Court reported in 237 ITR 570, Mumbai Tribunal in the case reported in 72 ITD 156, Apex Court 57 ITR 570, Mumbai Tribunal in the case reported in 72 ITD 156, Apex Court 57 ITR 532 (All), 87 ITD 200, ITAT Chandigarh Bench 71 ITD 324, 184 ITR 121 (Del) deleted the impugned addition by making the following observations in his order:In this case the appellant has filed details of the bank account of Shri Surendra Khoka. They have also filed during the course of appeal the bank account of Shri P.B. Bhardwaj from which he has made the gift. Even though in my opinion the certificate from the auditors whose address and practice number was also given and they had given a certificate to the extent that Shri P.B. Bhardwaj was a man of substantial wealth in London. Copy of the certificate of the Tax Consultant and Business Advisor is an accepted piece of evidence. The details of bank accounts from which the cheques were received have also been filed. The appellant has also filed a bank account of Shri P.B. Bhardwaj which shows that he has made a gift of $ 65,000 and from his bank account it can be seen that interest on fixed deposits every six months i.e. on 22.1.2001 was $ 27,400. Then he again received interest from fixed deposits on 22.2.2001 amounting to $ 22,259. If he has received interest to this extent he was a man of substantial wealth as certified by his auditors. Since he has given a certificate that he has made the gift and the gift has been made out of his bank account and the copies of bank account are also available, the gift cannot be treated as a bogus gift. Similarly, in the case of the other donor his bank account has also been given. His bank account shows that he had enough money to make the gift and the AOs observation that looking into his bank account after making a gift of $ 10,000 he had only $ 13000 left in his account and he had only maximum balance of $ 23,036 in his account out of which he has given a gift of $ 10,000 to the appellant does not have any force because the gentleman might be having accounts in other bank which have not been disclosed before the present AO. In both the cases the donee i.e. the appellant has established that he has received a gift from persons of NRE origin who are well known to him, their bank certificates have also been filed which show that money has been withdrawn from their accounts and credited into the account of the appellant. They have certified that they have made the gifts to the appellant. Once all these details are before the AO, he cannot reject the gifts on the ground that the donors were not related to the donee. The appellant has relied upon various case laws including the Delhi High Court in the case of CIT v. Mrs. Sunita Vachani, 184 ITR 121 which is very relevant on the issue of foreign gifts, where the Honble Delhi High Court has held that unless there is something more tangible or suspicion, it will be very difficult to regard the moneys received in India from abroad as foreign gifts as income of the assessee and considering all the other case laws quoted by the appellant, the AOs action in treating the gift as bogus is not correct since full details of the gifts have been made available with the AO. The AOs action in treating the gift as bogus is incorrect and the gifts are held to be genuine gifts and the appellants plea stands accepted.

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5.Before us the learned DR for the revenue firstly placed reliance in the case reported in ITO v. Skyjet Aviation Pvt. Ltd., 243 ITR 1(AT). Thereafter he submitted that in case the entire circumstances of the assessees case are taken into consideration in which these gifts of exorbitant amount were made by the strangers/Donors to the assessee in the light of principles of human probabilities as laid down by the Apex Court in the case of Sumiti Dayal vs. CIT, 214 ITR 801 and CIT vs. Durga Prasad More, 82 ITR 540 it would be apparent that these gifts given by the donors cannot be treated as genuine gifts. He further contended that merely on the basis of documents filed by the assessee such as certificates of Chartered Accountant and uncertified bank account filed by the assessee does not prove the credit-worthiness of the donor because the assessee has neither filed the authenticated assessment orders, balance-sheet duly certified or notarized by the authorities as prescribed in that foreign country. The learned DR for the revenue further contended that on proper analysis of the bank accounts of the donors by the Assessing Officer he is able to establish that the donors are not such men of means who could genuinely afford to part with such huge amounts for making gifts to the assessee who is not related to those donors. Lastly, the learned DR for the revenue contended that in the existing facts and circumstances of the case the AO was fully justified in making the impugned addition by treating these gifts as non-genuine and so the order of CIT(A) in this regard is required to be set aside and order of AO is required to be restored. 6.On the other hand, the learned AR for the assessee reiterating the submissions made before the tax authorities below further placed reliance before us on the documents filed before the AO and CIT(A) as well as on the decisions in the case reported in CIT v. R.S. Sibal, 269 ITR 429(Del), Nemi Chand Kothari v. CIT, 264 ITR 254(Gau). The learned AR for the assessee further submitted that since the assessee has successfully established the identity of the donors, their credit worthiness and genuineness of the gifts received from the donors, the AO was not justified in making the impugned addition merely because the donors were not related to the assessee and the CIT (A) has rightly deleted the impugned additions and hence the order of CIT (A) is required to be upheld and the appeal filed by the revenue is required to be dismissed. 7.We have considered the rival submissions, perused the record and carefully gone through the orders of the tax authorities below as well as the relevant case laws cited before us. 8.First we shall examine the case law relied upon by the learned AR for the assessee in support of genuineness of these gift transactions:-In the case of CIT vs. R.S. Sibal, (2004) 187 CTR (Del) 291 : (2004) 269 ITR 429 (Del) : (2004) 135 Taxman 492, their lordships held as under: There is no quarrel with the proposition that a mere identification of the donor and movement of the gift amount through banking channels is not sufficient to prove the genuineness of the gift and since the claim of the amount having been received as a gift is made by the assessee, onus lies on him not only to establish the identity of the donor but his capacity to make such a gift. However, in the instant case, though the

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assessee had admittedly produced the bank statements, the A.O. did not raise any query with regard to the capacity of the donors to make the gift. The only ground on which the genuineness of the gifts had been doubted was the alleged failure on the part of the assessee to establish his relationship with the donors. Admittedly, there is no blood relationship between the assessee and donors. No such case was even pleaded by the assessee. The donors had stated in their declarations that they had gifted the amounts to the assessee on account of their love and affections for him. Both the lower appellate authorities have recorded a categorical finding that by producing the documents the assessee has discharged the onus which lay on him with regard to the genuineness of the gifts. The inference drawn by the appellant authorities, on appreciation of evidence is factual, giving rise to no question of law much less a substantial question of law. Accordingly, the appeal is not entertained. - In the case of Jawahar Lal Oswal vs. Assistant Commissioner of Income Tax, ITAT, Chandigarh Bench, (2001) 71 TTJ (Chd) 240 : (1999) 71 ITD 324 (Chd), the Tribunal concluded that- Both the non-resident donors having confirmed the gifts and established their financial status, the gifted amount received by assessee on behalf of his major daughters by way of drafts and deposited in their respective bank accounts could not be treated as unaccounted money and addition could not be made under section 68A.

In the case of Nemi Chand Kothari vs. Commissioner of Income Tax & Anr., (2003) 185 CTR (Gau) 635 : (2003) 264 ITR 254 (Gau) : (2004) 136 Taxman 213, their lordships made the following relevant observations in their order:Though under s. 68, an AO is free to show, with the help of the inquiry conducted by him into the transactions, which have taken place between the creditor and the subcreditor, that the transaction between the two were not genuine and that the subcreditor had no creditworthiness, it will not necessarily mean that the loan advanced by the sub-creditor to the creditor was income of the assessee from undisclosed source unless there is evidence, direct or circumstantial, to show that the amount, which has been advanced by the sub-creditor to the creditor, had actually been received by the sub-creditor from the assessee. Tolaram Daga vs. CIT (1966) 59 ITR 632 (Assam) relied on.

- In the case of Commissioner of Income Tax vs. Mrs. Sunita Vachani, (1990) 84 CTR (Del) 18 : (1990) 184 ITR 121 (Del) : (1990) 52 Taxman 326, their lordships held as under: 4.In our opinion, the Tribunal had, on merits, come to the conclusion that the gifts were genuine. This is a pure question of fact. The Tribunal has examined the evidence which was available on the record and has arrived at the aforesaid finding. Even though it may be surprising as to how large sums of money are received by a family in India by way of gifts from strangers from abroad, unless there is something more tangible than suspicion, it will be difficult to regard the moneys received in India from abroad as representing the income of the assessee in India. On the facts as existing on the record, we are unable to come to the conclusion that any question of law arises. The petition is dismissed. No order as to costs.

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9.Now, we shall deal with case law relied upon by the learned DR for the revenue on the basis of which he contended that the gifts received by the assessee were not genuine and so the impugned amounts have rightly been treated as income of the assessee by the Assessing Officer. In the case of Commissioner of Income Tax, West Bengal II vs. Durga Prasad More, [1971] 82 ITR 540 (SC), their Lordships laying down the significance of human probabilities held as under: that though an apparent statement must be considered real until it was shown that there were reasons to believe that the apparent was not the real, in a case where a party relied on self-serving recitals in documents, it was for that party to establish the truth of those recitals : the taxing authorities were entitled to look into the surrounding circumstances to find out the reality of such recitals. Their Lordships of the Apex Court in the case of Sumati Dayal vs. CIT reported in 214 ITR 801 observed as under: Dismissing the appeal, that the Settlement Commission after considering the surrounding circumstances and applying the test of human probabilities had rightly concluded that the appellants claim about the amount being her winnings from the races was not genuine. Their Lordships of the jurisdictional High Court of Delhi in the case of Sajjan Dass & Sons v. CIT reported in 264 ITR 435 while considering a case in which gifts were received by the assessee through banking channels laid importance on the capacity of the donor for making the gift and his identity as well as importance of relationship between the donor and donee in determination of genuineness of gift held as under:That a mere identification of the donor and showing the movement of the gift amount through banking channels was not sufficient to prove the genuineness of the gift. Since the claim of the gift was made by the assessee, the onus lay on him not only to establish the identity of the person making the gift but also his capacity to make a gift and the it had actually been received as a gift from the donor. Having regard to the enquiries conducted by the AO from the bank with which the assessee was admittedly confronted and bearing in mind the fact that admittedly the donor was not related to the assessee, the findings recorded by the Tribunal were pure findings of fact warranting no interference. The appeal was liable to be dismissed. Similarly, laying importance on the relationship of donor and donee for determining the genuineness of the gift their Lordships of Punjab & Haryana High Court in the case of Lal Chand Kalra v. CIT reported in [1981] 22 CTR 135 have held that where there was no occasion and the alleged donor was a stranger, the amount received in a gift represents concealed income of the assessee. In this case, the Honble High Court further held the amount of gift as assessees income from undisclosed sources

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as well as the gift representing assessees own money, which was introduced in the garb of a gift by the assessee.

In 69 ITD 23(Del) in the case of Sanjeev Batra v. ACIT, the Delhi Bench of ITAT held that the AO was fully justified in invoking section 68 of I.T. Act for bringing to tax the amount of Rs. 25 lakhs alleged to have been received by the assessee as gift through banking channels which had neither been proved to be genuine nor financial capacity of the donor had been established. In Income Tax Officer vs. Skyjet Aviation Pvt. Ltd., [2000] 243 ITR ITAT, in their majority view, the Tribunal held that the capacity of the creditor to advance the amounts was one of the main ingredients to prove a cash credit.

Further observed that the source of the source was sought to be furnished through the examination of C. C was a chartered accountant. His version was that he had borrowed from money lenders after executing hundis agreeing to pay interest at 12 per cent whereas he used to charge only 7 to 8 per cent from P which was quite unnatural and unbelievable against the natural course of human conduct and it was not conduct exhibited by a person who generally considered his own interest, being a professional man himself.

In Chain Sukh Rathi v. CIT & Anr., 185 CTR (Raj) 56, 270 ITR 268 (Raj) their Lordships in a case of block assessment while examining the case of gift made by father to his son held that it is true that Rs. 30,000/- has been paid by cheques by his father, but there is no occasion for the father to gift this amount to the son. This amount also rightly treated as undisclosed income of the assessee, which has been received in the name of gift from his father. Consequently the addition made by the AO and affirmed by the Tribunal is confirmed.

10.Their Lordships of jurisdictional High Court of Delhi in their decisions in the case of R.S. Sibal (Supra) and Sajjan Dass & Sons (Supra) have consistently held that a mere identification of the donor and showing the movement of the gift amount through banking channels was not sufficient to prove the genuineness of the gift but the assessee was also required to prove the capacity of the donor to make a gift and that it had actually been received as a gift from the donor. In both the decisions (Supra) their Lordships further observed that the inferences drawn by the authorities on appreciation of evidence were purely findings of fact. It means that only after appreciating the evidence produced on record by the assessee it can be held whether the assessee has been able to establish the identity of the donor and his capacity to make such a gift, as well as, the genuineness of the amount received as a gift from the donor. Now in order to determine the genuineness of the amount received by the assessee as gift from the donor the observations made by their Lordships in the case of Durga Prasad More (Supra) and Sumati Dayal (Supra), and by P& H High Court in the case of Lal Chand Kalra and by the IT Tribunal in the case of Sky Jet Aviation (P) Ltd. (Supra) are very significant and essential because their Lordships of the Apex Court in their decision (Supra) laid down that the tax authorities below were entitled to look into the surrounding circumstances to find out the genuineness of the transaction by

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applying the test of human probabilities. Similarly, their Lordships of P&H High Court in the case of Lal Chand Kalra (Supra laying emphasis on the occasion for making a gift went to the extent of observing that where there was no occasion and the alleged donor was a stranger, the amount received in gift represents concealed income of the assessee and the amount was held to be assessees own income from undisclosed sources as well as the gift representing assessees own money which was introduced in the garb of a gift by the assessee. Similar emphasis was laid by the Rajasthan High Court in the case of Chain Sukh Rathi (Supra) where in their Lordships treated the amount of gift received by a son from his father as undisclosed income of the assessee because the father could not establish the occasion on which the gift was made. In the light of the decisions (Supra), analysed as above, we find that the decision quoted by the assessee in his favour were delivered by the authorities on the facts of those cases but these principles, as discussed above, were never departed by their Lordships in those cases (Supra) too. 11.In the case of R.S. Sibal (Supra) decided by the Honble Delhi High Court relied upon by ld. AR for the assessee we find that the assessee had discharged the primary onus cast upon him with regard to the genuineness of the gift but the AO simply doubted the genuineness of the gift because the assessee failed to establish his relationship with the donor. 12.Similarly, in the case of Jawahar Lal Oswal (Supra) decided by ITAT Chandigarh Bench the Tribunal did not treat the amount received by the assessee as its unaccounted money because the donors confirmed the gifts and established their financial status and nothing beyond that was required to be taken into consideration by the Tribunal in that case. 13.The decision of Guwahati High Court in the case of Nemi Chand Kothari (Supra) relied upon by the ld. AR for the assessee is not on the issue under consideration before us and hence is of no help to the assessee. 14.Similarly the case of Sunita Vachani (Supra) decided by Honble Delhi High Court where in their Lordships upheld the genuineness of the gift because the gifts had been treated as ungenuine by the AO as huge amounts by way of gifts from strangers were received by the assessee from abroad but more than that the AO had not established anything more tangible than this suspicion. Hence this case cited by the ld. AR also does not apply fully to the facts of the instant case of the assessee as would be discussed here in under by us. 15.Thus, from the above decisions (Supra) for accepting the gift amounts received by the assessee to be genuine the ingredients required to be taken into consideration by us are that the assessee must establish the identity of the donor, his financial capacity to make such gift, as well as, the genuineness of the gift transaction. The genuineness of the gift transaction cannot be determined without looking into the aspect of human probabilities, relationship of donor and donee, occasion for making the gift and existence of reciprocity, if any. It means that while considering the genuineness of the gift transaction the abovementioned aspects are of no less significance. Further, in case the assessee fails to establish any one of these ingredients the gift amounts received by the assessee can be treated as assessees income from undisclosed income representing assessees own money, which was introduced in the garb of a gift by the assessee. Thus, keeping in mind all the principles laid

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down for considering the genuineness of a gift transaction we proceed to determine the genuineness of the gift transaction in the case of the assessee. 16.In the instant case the AO after examining the copies of bank statement of the donors furnished by the assessee held the gifts to be bogus because the donors did not have a financial capacity to make gifts of such huge amounts to the assessee, when the assessee was not related to them, and the AO treated the gift amount as assessees own money routed through these persons for increasing the capital of the assessee for purchasing a house, which was purchased by the assessee for a sum of Rs. 47.5 lakhs, and added the same to the income of the assessee u/s 68 of the Income Tax Act, 1961 as the income of the assessee from other sources. 17.On the other hand the CIT (A) without properly and carefully analyzing the bank statements held that the donor Shri P.B. Bhardwaj had been receiving interest on the fixed deposits amounting to 27,400/- and also received deposit on 22-2-2001 amounting to 22,259/- and further because the auditor had furnished a certificate that this donor was a man of substantial wealth in London and therefore was financially sound. Similarly, the other donor was also held to be financially sound on the basis of his bank account statement because even after gift of 10,000/- he was left with 13,000/- and further presuming that the donor must be having other bank accounts which were not disclosed before the AO. 18.We are of the opinion that unless the bank statement are supported by any other corroborative evidence to establish the financial capacity of the donors the bank statements do not prove the credit worthiness of the donors for showing that they were financially sound for making such gifts because the bank statements merely indicate the movement of funds and not the credit worthiness of the account holder. We cannot ignore that in case of NRE donors the AO is handicapped in verifying the creditworthiness of the donor in comparison to an Indian donor because in case of Indian donors after examining the donors and questioning them the AO can conveniently verify the creditworthiness but in case of foreign donors he cannot do so and has to simply depend upon the documents filed by the assessee. 19.We are further of the opinion that creditworthiness of a donor can be safely proved by the donor by producing a certified/notarized copy of the return accompanies by balance sheet indicating his capital base and the assets owned by him. Mere issuance of a cheque from a bank account cannot establish the creditworthiness of a donor. 20.We have even examined the alleged copy of the bank account statement of Shri P.B. Bhardwaj appearing at page 21 of paper book and find that the current account is in the joint names of Alok Bhardwaj, Usha Bhardwaj and Priya Bhusan Bhardwaj and only for the period 11-2001 to 22-2-2001, simply indicating the bank transaction of approximately less than 2 months. It is further important to mention here that the bank while issuing the statement has clearly mentioned that this statement was only with respect to the account of Alok Bhardwaj and Usha Bhardwaj and that US Current dollar account number was 011-05364-05. But the bank nowhere indicated that this bank statement pertained to the donor Shri P.B. Bhardwaj. Though we have already mentioned that the bank statements only indicate the movement of the amounts and do not prove the creditworthiness of the donor but this instant

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bank statement furnished by the assessee before the AO does not even pertain the donor Shri P.B. Bhardwaj and hence has no value. 21.We have also considered the certificate issued by the tax consultant of the donor in London placed at page 8 of paper book and find that in the certificate the tax consultants have simply mentioned that we confirm that Mr. P.B. Bhardwaj is well placed and a man of substantial wealth, but have not mentioned in the certificate about the assets owned by the donor, his monthly income, his monthly expenditure and the extent to which they considered him a man of substantial wealth. Such a certificate issued by a tax consultant, unaccompanied by any corroborative evidence, cannot be accepted for treating the donor to be financially so sound that he can give an amount of Rs.3004300/- as gift to an Indian assessee who is not even related to him. 22.Similarly, in the case of the other donor Shri Surinder Khoka we find that except the bank statement placed at page 18 of the paper book for the period 1-9-02 to 1-12-03 no other document has been filed on record to prove the creditworthiness. Even on going through the copy of the bank account of Shri Surinder Khoka we find that there are deposits and withdrawals of small amounts and the maximum balance in his account was 23,036/- out of which he made a gift of 10,000/- to the assessee who was not related to him and even the 10,000/- withdrawn on 12-2-2001 for making the gift were again deposited in the account on 22-2-2001, As we have already mentioned that this donee except filing the copy of the bank account has not filed any other document to prove his creditworthiness, though the bank account is not a proof of creditworthiness of the donor, but, even if assuming it could assist the assessee in showing the creditworthiness of the donor to any extent, even then on examining the bank statement we find that with no stretch of imagination this doner could be considered to be a man of means for advancing a sum of Rs.461942/- ( 10,000/-) out of bank balance of 23,036/- to the assessee who was not related to him. 23.The CIT (A) was not justified in presuming that this donor may be having other bank accounts also which were not disclosed before the AO by the assessee in the absence of any such evidence before him by holding this donor to be financially sound. 24.For the reasons stated above we have come to a conclusion that the assessee has failed in establishing the creditworthiness of the donors. 25.The next question requires to be determined by us is whether the amount received by the assessee was genuinely received as gift. In this regard we may mention that undisputedly the donors had no occasion for making gifts of such huge amounts to the assessee. Further, the donors were not related to the assessee. The another question which remained unanswered in the entire case, either by the assessee or by the donors is, as to why the donors parted with such huge amounts by gifting the same to the assessee merely out of love and affection depicted through letters when neither there was any occasion nor they were related to the assessee nor there was any reciprocity between them regarding exchange of such gifts. Now, the simple question which arises in mind is whether it is humanly probable that a person may give away his hard earned money, earned in foreign country, as a gift to an Indian acquaintance merely out of love and affection when that Indian is not related to him and that

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NRI donor has no occasion or giving the amount in gift. If we put this question to any human being having a normal human behaviour the obvious answer would be no. Therefore, applying the test of human probabilities, as laid down by the Apex Court in the cases (Supra), the AO was fully justified in coming to a conclusion that these were bogus gifts made by the donors to the assessee, which was assessees own unexplained money routed through the donors simply to increase the capital of the assessee to enable the assessee to purchase the house for a sum of Rs. 47.5 lakhs. The AO was further justified in treating the gifts as not genuine and adding the same to the income of the assessee u/s 68 of Income Tax Act, 1961 as income from other sources. Consequently, the order of CIT (A) in this regard is set aside and the order of the AO is restored. The ground of appeal taken by the revenue is allowed. 26.In the result the appeal filed by the revenue is allowed. Order announced in the open court on 8th September 2006.

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