Gift received from NRI relative

By | August 14, 2015
(Last Updated On: August 14, 2015)

Foreign gift received from NRI relative

Question: How to prove that genuineness of gifts received from the NRI relalaive ?

Documents furnished by the Assessee with Assessing Officer are 

A copy of foreign bill transaction advice

copy of donor’s passport

Bank account statement of Donor

Gift confirmation in a gift deed giving all the particulars of the gift to the assessee by the Donor

Question : Whether the gifts received from NRI relative in the bank account  will be treated as unexplained u/s 68 and hence taxable ?

Answer No. Where entire details of gift transaction were fully explained through bank statement of assessee, remittance advice, bank statement of donor and foreign remittance advice issued by bank, addition made under section 68 was to be deleted

Question Can the Sister in law give the Gift ?

Answer Yes.

IN THE ITAT MUMBAI BENCH ‘I’

Smt. Ichudevi L. Choraria

v.

Income-tax Officer

D. KARUNAKAR RAO, ACCOUNTANT MEMBER
AND AMIT SHUKLA, JUDICIAL MEMBER

IT APPEAL NO. 3384 (MUM.) OF 2013
[ASSESSMENT YEAR 2009-10]

FEBRUARY  6, 2015

Section 68 of the Income-tax Act, 1961 – Cash credit (Gift)

Assessment year 2009-10

The gift was received on the occasion of marriage ceremony of the assessee’s grand daughter

Assessee received certain sum as a gift from her late husband’s sister, who was a non-resident Indian based in Hong Kong  Assessing Officer treated said gift as income from undisclosed sources under section 68 on ground that financial capacity of donor was not fully proved .

It was found that entire details of gift transaction were fully explained through bank statement of assessee, remittance advice, bank statement of donor and foreign remittance advice issued by bank in Hong Kong

 Further, from bank account of family concern of donor, it was evident that amount had been credited to bank account of donor and on same date itself, amount had been remitted to assessee’s bank account in India.

 since genuineness of transaction and creditworthiness of donor were proved, addition made under section 68 was to be deleted [Para 7] [In favour of assessee]

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