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2017 (3) TMI 1470 - ITAT CHANDIGARHAddition u/s. 68 - gifts received by the assessee - Held that:- The bank accounts from which the stated gifts have been given are NRE accounts. All deposits in the said accounts can be made only out of the earnings made outside the country. In any case, no cash deposits have been found in the said accounts. Further there are enough deposits in the said accounts to make the impugned gifts. When the availability of funds has been adequately proved, the capacity of the donors to make the gifts also stands proved. By asking the assessee to file copies of the Income Tax Returns and also their bank statements in their country of residence, the Revenue is indulging in the exercise of verifying the source of the source which is settled law, cannot be done in this case. The onus to explain the credit being on the assessee, reflects the general rule of law of evidence codified in section 106 of the Evidence Act, 1872, ,as per which the source of income is a matter with the exclusive knowledge of the assessee which he has to prove and demonstrate. It is for this reason only that the source of source, which is not within the knowledge of the assessee at all, is not required to be proved by the assessee. The addition we find has been made merely on the basis of suspicion, without any iota of evidence to even lead to the fact that the amount received as gifts were actually the assessees income only. This cannot be the basis of making an addition under a deeming provision, section 68 in the present case. We reject the contention of the learned D.R. that the assessee has failed to prove the capacity and genuineness of the transaction by not filing the copies of income tax returns as also copies of bank statements of the donors in their countries of residences. In view of the above, we hold that the assessee has adequately discharged its onus of proving identity of the donor, capacity of the donor as also the genuineness of the transaction being in the nature of gift received from brothers and, therefore, there is no reason to make any addition under section 68 on account of unexplained credit. The addition so made of ₹ 45,00,000/-, is therefore, deleted. - Decided in favour of assessee.
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