Law:

Section:

Section 68 of the Income-tax Act, 1961 - Cash credits - Assessee received a gift of Rs. 1 lakh from a non-resident Indian - He claimed that said amount was received by him from his close friend in hour of need and same was exempt under section 5 of Gift-tax Act - Assessing Officer held that gift received by assessee was compensatory in nature and was liable to be taxed under section 68 - On appeal, Commissioner (Appeals) upheld view taken by Assessing Officer - On second appeal, Tribunal affirmed findings of Assessing Officer and Commissioner (Appeals) holding that gift was not genuine - Whether findings recorded by Tribunal being based on record could not be said to be perverse and could not be interfered with under section 260A - Held, yes FACTS The assessee received a gift of Rs. 1 lakh from a non-resident. During the assessment proceedings, he explained to the Assessing Officer that he had received the said amount from his childhood friend in the hour of need and claimed the same as exempt under section 5 of the Gift-tax Act. The Assessing Officer held that the gift received by the assessee was compensatory in nature and was liable to be taxed under section 68. On appeal, the Commissioner (Appeals) upheld the view of the Assessing Officer. On appeal before the Tribunal, the assessee filed an affidavit of donor wherein he declared that he had gifted the amount in question to the assessee at the time of income-tax raid when he was in dire financial crisis. The Tribunal affirmed the findings of the Assessing Officer and the Commissioner (Appeals) concluding that the gift was not genuine. The Tribunal, inter alia, recorded the following reasons : (a) there was no occasion for the NRI-donor to have given a gift to the assessee; (b) the affidavit furnished from the donor did not bear any date and same was never furnished before the Assessing Officer; (c) a perusal of the NRE account in the name of the donor showed that the amount had been deposited in the said account immediately before making the gift to show the same to be through a banking channel; (d) there was no relationship between the assessee and the donor, except claim of close friendship; (e) the donor…

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