Credit worthiness

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 February 2010 Dear All,

i have received gift from my sister who is staying in UAE from where she had given me gift of Rs. 55000/- through cheque. my case was selected for scrutiny for that year. i was lucky as my sister visited india at that time. I told her to come in front and note the statement in front of the ito. further my sister submitted the affidavit and confirmation from the donor. I am in appeal with the cit (A) where she asks credit worthiness of my sister. can any one give me case law related to this as she is in UAE currently.

Please reply at your earliest

Thanking you in advance.

shrikant

shrikant (Expert)
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14 February 2010 Dear friend

Please elaborate the case further relating to credit worthiness and was the decision of your case. So that I can give you correct opinion. As per section 56 this receipt is totally exempted..

Querist : Anonymous

Querist : Anonymous (Querist)

14 February 2010 Dear Sir,
Actually the case is
Dear All,

Assessee has received gift from natural love and affection from XYZ of Rs. 40000/- on 14.07.2004 and Rs. 15000/- on 10.05.2004 by DD. XYZ had given the affidavit and confirmation on the stamp paper of Rs.100/- and Rs. 20/- respectively that she had given the assessee sum of Rs. 55000/- as a gift. the Case is lying with cit(a) where the cit(a) is asking for credit worthiness of the Donee.
Can any one tell some related case laws against this.

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shrikant

shrikant (Expert)
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14 February 2010 Dear friend

This means income tax departments wants to know from which source this money came for gift to you. This may be explained from her foreign bank account. Her foreign income tax return. Merely stamp paper evidence not conclusive for exemption and also mere relationship also not conclusive for exemption. Hence you prove in CIT (A) that this is the money she holds and transfer to you in love and affection. Then this Rs. 55,000 gets exempted.

There are number of case laws in this sum are give below. You can see details about case law in income tax website.
1)ITO vs Mukesh Bhanubhai Shah
2)CIT vs Mrs Sunita Vachani
3)Krishna Mohan Agrawal v ITO , Appeal No.: ITA No. 811/Luc/05