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2007] 293 ITR 294 [2007] 162 TAXMAN 91 (DELHI) HIGH COURT OF DELHI Sandeep Kumar (HUF) * v. Commissioner of Income-tax, New Delhi MADAN B. LOKUR AND V.B. GUPTA, JJ. IT APPEAL NO. 380 OF 2007 APRIL 25, 2007 Section 68 of the Income-tax Act, 1961 - Cash credits - Block period 1-4-1986 to 29-8-1996 - Assessing Officer made addition of amount received by assessee as gifts from NRI donors invoking section 68 on ground that though assessee was able to establish identity of donor, yet he could not establish financial capacity of donor and genuineness of gifts - Whether since there was nothing on record to show as to what was creditworthiness of donor; what kind of relationship donors had with assessee; what were the sources of funds gifted to assessee; and whether they had capacity of giving large amount of gift to assessee, gifts received by assessee from NRI donor could not be held to be genuine - Held, yes FACTS Subsequent to a search conducted at the premises of the assessee from where a set of cheque books and pass books of NRI account of the donors of the gifts were recovered, the Assessing Officer noticed that the assessee had received a certain amount as gifts by cheques from two NRI donors. On asking the genuineness of those gifts, the assessee stated that since those gifts were received from NRI, the same were genuine. The source from where those gifts had been made by the donor, the details and particulars of bank account from where those gifts had been made and declaration from the donor in support of his financial status, the annual income and total wealth owned by him had been filed. Further, in support of those gifts, the assessee also filed two separate affidavits by the donor affirming the facts that he was a permanent resident of USA having source of income by virtue of being a professor; and that he had NRE Account No. 47 with OBC, Karol Bagh, New Delhi from where he had forwarded the gifted amount by cheques to the assessee-HUF. The Assessing Officer, however, made addition of amount received as gifts treating the same as income of the assessee from undisclosed source under section 68 by stating that though the assessee was able to establish the…

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