JUDGMENT

B.SUDERSHAN REDDY,J.

Leave granted.

These appeals have been filed against the judgment of Madras High Court dated 29.3.2006 in TC (A) Nos. 74 to 76 and 78 to 82 of 2002 whereby the following questions have been answered by the High Court in favour of the assessees and against the revenue:

(a)Whether in the facts and circumstances, the Income Tax Appellate Tribunal was correct in law to accept the principle of preponderance of probabilities in holding that the claim of the appellant that the sum of Rs. 15,62,500/- received him by way of gifts through normal Banking Channels was not genuine an that it was liable to be assessed under Section 68 of the Income Tax Act, 1961?

(b)Whether in the light of the law established and based on the facts and in the circumstances of the case, the learned Income Tax Appellant Tribunal is legally justified in concluding that burden of proof cast on the appellant under Section 6B of the Income Tax Act, 1961 has not been discharged and the ingredients for invoking section 68 of the Income Tax Act are present?

(c)Whether in the facts and circumstances of the case, the conclusion of the Tribunal that the claim of gift is not genuine is reasonable and based on relevant material and not perverse?

These appeals relate to the assessment years 1995-96 and 1996-97. The dispute in all these appeals essentially relates to the addition made by the Assessing Officer in respect of several foreign gifts stated to have been received by the assesses from one common donor namely Sampath Kumar. The gifts received were from one Ariavan Thotan and Suprotoman. It is during the enquiry by the Revenue it is asserted that they were the aliases of Sampathkumar. These gifts were made to A. Srinivasan and his wife, Smt. S. Kalavathy, his son, S. Balaji Manikandan and to one of his brothers, Rajendran and Smt. Mohanakala. Each one of them is an assessee within the jurisdiction of the appellant. The foreign gifts are received by the assesses during the assessment years 1993-94 to 1996-97. The detail of the gifts received by each one of the assessees is as under:

Assessment years

Shri/Smt. 93-9494-9595-9696-97

A. Srinivasan 6,40,75814,46,93326,47,6478,64,500

S. Kalavathy1,47,79716,19,67921,82,8471550,00

S.Balaji Manikandan84,4235,68,01521,85,6048,64,500

A. Rajendran 15,62,500

R. Mohankala15,62,500

8,72,97836,34,627101,41,09832,79,000

In all the aggregate gifts received by the assessees is to the extent of Rs. 1,79,27,703/-. The Assessing Officer did not accept the explanation offered by the respective assessees that the amount of credit is a gift from NRI and proceeded to add it as the income of the assessees from undisclosed sources. The credit entries have been made during the period from 8.7.1992 to 19.10.1995. There is no dispute that the payments were made by instruments issued by a foreign bank and credited into the respective assessees account by negotiation through a bank in India. Most of the cheques sent from abroad were drawn on Citibank, N.A. Singapore.

The Assessing Officer dealt with the controversy as regards the cash credit entries received from the foreign donor. He noticed that the gifts have been sent in the name of Ariavan Thottan and received by A. Srinivasan and others who are all his family members. Each one of them is an individual assessee.

That all the assessees were summoned and their statements have been recorded by the Assessing Officer. Srinivasan who is the key person in his statement said that he knew Sampathkumar for the last 20 years and he had been helping Sampathkumar prior to 1985 by paying Rs. 100/- to 200/- every month as he had no source of income to get himself educated. There are material inconsistencies in the statements made by other assessees which we are not required to notice in detail. Sampathkumar in his own statement stated that he was in Indonesia up to the year 1992 and employed as an Engineer. Thereafter, he shifted to England and started consultancy p