If you have received a gift from a relative or friend, you need to disclose the name and other details of the donor for the gift to be free from tax and not to be treated as Income.

Assessing Officer usually insists for full details of donor and even at times insist for his presence. The issue becomes a problem when the donor friend or relative is resident abroad. In such cases, if the gift has been received through a banking Channel, no further proof should be insisted by Assessing Officer. This is gist of a judgment in a similar case, where an Assessee had claimed that a sum of Rs.1,00,000 was received as gift from NRE Account maintained with bank by one of his relative.

Assessing Officer declined the claim of Assessee and proceedings for imposition of penalty under section 271(1)(c) were initiated as to Assessing Officer’s mind, full details of receipt were not declared.

On an appeal, the Tribunal had found that requirements of section 271(1)(c) were not satisfied because impugned amount claimed to be a gift had come through a banking channel and from an identifiable source, i.e., NRE Account and came to conclusion that once particulars of income had been duly declared, then it could not be concluded that Assessee had concealed particulars or had furnished inaccurate particulars of his income.

Upon an appeal by Revenue to High Court, Hon’ble Court ruled that that since no evidence with regard to concealment had been placed on record by revenue, Tribunal was justified in holding that Assessee had not concealed particulars or furnished inaccurate particulars of his income and, as such, no penalty under section 271(1)(c)  was to be levied.