Jawahar Lal Gupta and Ashutosh Mohunta JJ.

1. There are two gifts of $ 200,000 each by two donors who are not related to the assessee in favour of the assessees two daughters, through two banks drafts bearing consecutive numbers, issued by the Midland Bank, London, on March 22, 1994. Mr. O. S. Gill who is a British citizen and a resident of the U. K. made a gift of $ 200,000 to Ms. Ruchika Oswal. Similarly, Mr. B. P. Bhardwaj, another resident of the U. K. is alleged to have made a gift of $ 200,000 in favour of the assessees daughter, Ms. Monica Oswal. The assessee had received the two drafts on behalf of his daughters in England, to save gift-tax, the amounts were credited to the accounts of the two donees.

2. The Revenue alleges that the gifts are bogus. The amount of the gifts represents the concealed income of the assessee. The Tribunal has erred in accepting the claim of the respondent-assessee and deleting the addition. The assessee claims that these are valid gifts made by two friends. The Tribunal has recorded a finding of fact. The amount is not his concealed income. Thus, the appeals filed by the Revenue deserve to be dismissed. These are the contending claims of the parties in the three income-tax appeals filed under Section 260A of the Income-tax Act, 1961.

3. Counsel for the parties have referred to the facts in I. T. A. No. 49 of 1999. These may be briefly noticed.

4. The respondent-Mr. Jawahar Lal Oswal is the managing director of Oswal Woollen Mills Limited, Ludhiana. He filed his income-tax return for the assessment year 1994-95. He declared a total income of Rs. 7,74,210. This included income from salary, dividend, interest and capital gain. Vide order dated February 28, 1997, the Assessing Officer made various additions to the income declared by the assessee. He found that the assessee had "simply introduced his own concealed income under the garb of the alleged gifts in the name of the daughters so that the funds of the family may remain within the family itself without paying any tax thereon." Thus, an addition of Rs. 1,24,24,864 was made in the income of the respondent on account of the two gifts of $ 200,000 each made by M/s. O. S. Gill and B. P. Bhardwaj in favour of his two daughters, Ms. Ruchika and Ms. Monica, respectively. His taxable income was fixed at Rs. 1,32,15,070. The assessment for the amount of gift was also made "on protective basis in the hands of his daughters . . ."

5. The assessee filed an appeal. Vide order dated December 19, 1997, the Commissioner of Income-tax (Appeals) (Central), accepted the assessees claim in respect of the gift made by Mr. O. S. Gill in favour of Ms. Ruchika Oswal. However, the addition on account of the gift made by Mr. B. P. Bhardwaj to Ms. Monica was confirmed.

6. The Revenue as well as the respondent-assessee challenged the order of the appellate authority before the Income-tax Appellate Tribunal. Vide order dated January 29, 1999, the Tribunal accepted the appeal filed by the assessee and rejected the claim of the Revenue. Aggrieved by the order, the Revenue has filed the three appeals. It prays that the following substantial question of law arises in these appeals and may be answered in the affirmative :

"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in deciding the deletion of the two foreign gifts of two lakhs US dollars each received by the assessee on behalf of his daughters as on substantive basis and simultaneously deleting the addition made on protective basis in the hands of his daughters, Monica Oswal and Ruchika Oswal, because the financial capability of the donors has not been proved at any stage, either at the assessment stage or at the appellate stage ?"

7. Mr. R. P. Sawhney, learned counsel for the Revenue contended that the gifts as claimed by the assessee are bogus. The donors did not have the financial capability to make the gifts. The amount of the gifts is in fact