TMI Blog1998 (3) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 1,69,861 and received another amount of ₹ 23,000 from Smt. Krishna Parmar by way of transfer from NRE A/c No. 103 with Indian Bank, Phagwara, thereby total foreign gifts were ₹ 1,92,861. The assessee was examined by the Assessing Officer to verify the genuineness of the foreign gifts in which he stated that ₹ 1,50,200 was sent to him by his religious brother Piara Lal residing in Canada for the last 25 years. The other amount of ₹ 19,661 was given to him from Smt. Veena Birla, who was class fellow of his wife and sister-in-law of her sister. ₹ 23,000 were received from Smt. Krishna Parmar, a family friend. The Assessing Officer further noted that assessee s wife Smt. Mukta Sharma had also received foreign remittances of ₹ 14,044 from Smt. Veena Birla and ₹ 29,933 from Smt. Krishna Parmar family friend and these are two amounts which were credited in her account and later on transferred in the account of her husband. Smt. Mukta Sharma was also examined. The contention of the assessee and his wife was that their son was going to seek admission in Dayanand Medical College, Ludhiana for which he needs foreign gifts that is why both of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and under the Foreign Exchange Regulation Act no Indian rupee can go out of India without banking channel. Apart from it, it was specifically mentioned that the Assessing Officer deputed this inspector to find out the truth about the relation of donor viz. Piara Lal and said inspector confirmed the submissions of the assessee. Further Piara Lal in his letters addressed to the assessee confirmed giving of the amount and thus there was no basis for making the addition. After considering the submissions of the assessee, the learned CIT(A) deleted the amount after observing as under : 6. It seems that there is no disputed amount the receipt of money. The amounts have been received between August to November, 1988 presumably before his son appeared in CET test in 1989. Since the amount was required in 1989, it was deposited with Kiran Metal Works, Jalandhar on the understanding that it will be returned back at once when required. The correspondence with three persons and the deposition of the appellant and his wife showed their closeness with the donee. 7. The earlier discussion shows that the amounts received were not voluntary as the gifts were made on the req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeking admission in D.M.C., Ludhiana under category 2(e) in which foreign donation was must as apparent from copy of catalogue at pp. 42 and 43 of the paper-book and this was the occasion which prompted the assessee to seek foreign currency. It otherwise also proves the genuineness of the transaction. In the end, the learned counsel for the assessee pointed out that the Tribunal, Amritsar Bench vide its order dated 1st January, 1993 in ITA No. 671 (Asr.)/1992 in the case of ITO v. Smt. Shanti Devi, Jalandhar has followed the decision of the Delhi High Court in the case of Smt. Sunita Vachani (supra) and thus the same view should be followed in the present case and there was no basis for addition. 4. We have considered the rival submissions and perused the relevant material to which our attention was drawn during the course of hearing by the learned counsel for the assessee. First of all, we have to see whether there was an occasion for making gifts in favour of the assessee by his alleged friends and relatives as the learned counsel had vehemently argued that there had been an occasion for making the gifts by assessee s friends and relatives. The alleged occasion is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch application has been moved till today by the assessee s son and particularly in 1988 to 1990. We have also minutely perused the prospectus of DMC, Ludhiana, a copy of which is appearing at pp. 41 to 43 of the paper-book and particularly the relevant clause of category 2(e), which provides that any candidate, who is qualified from the foreign universities/Boards can seek admission on payment of 30,000 US Dollars. The assessee had placed wrong reliance on this clause. The assessee s son had not qualified from any foreign university/Board and thus he cannot be admitted even on payment of 30,000 US Dollars. So this theory fails. Secondly, the assessee for seeking US Dollars should have asked donors to send the amount of gift in US Dollars but as apparent from copy of bankdraft of ₹ 1,50,200 appearing at p. 26 issued on behalf of Piara Lal in favour of the assessee, we note that the amount of draft was to be paid in Indian rupee and not in Dollars. The same thing is in respect of others except one gifts. Smt. Veena Birla has sent gift of 1,000 US Dollars to the wife of the assessee and rest of the amount of gift by the other donors are to be paid in Indian rupee. So this limb o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of gift came out of his income. In the case in hand, the assessee failed to prove anything except a mere confirmation of donors on record, to show that all the donors have parted with the money from their incomes/savings. Further, their Lordships in that case were not discussing the question on merits and whatever they have observed was in respect of that case but facts of the present case cannot be equated with that case and no reliance can be placed for deciding the present case. However, the observations of the Hon ble Punjab Haryana High Court in the case of Lal Chand Kalra (supra) are relevant. One has to see as to whether the donors were men of means and whether gifts can be from strangers. In the case in hand the capacity of the persons who gave the gifts had not been proved as nothing came on record that the amount of gifts came from the savings/income of the donors. Secondly, the donors were not relatives nor can be treated as friends. No reason to give such gifts as occasion for which alleged gifts were sought by the assessee proved to be baseless and thus all the transactions of gifts were rightly treated as bogus. 7. The other plea was that some of the ..... 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