JUDGMENT judgment of court was delivered by Sanjiv Khanna J.-C. M. No. 59 of 2003 This is application for stay. Learned senior counsel appearing for appellant-assessee states that he is not pressing stay application. same is, accordingly, dismissed as not pressed. I. T. A. No. 137 of 2003 This appeal under section 260A of Income-tax Act, 1961 ("the Act", for short), by appellant-assessee, Pawan Kumar Aggarwal, impugns findings recorded by Income-tax Appellate Tribunal ("the Tribunal", for short) in their order dated September 17, 2002, relating to genuineness of gift of Rs. 1 lakh received by assessee's minor daughter, Aushi Aggarwal. appeal pertains to assessment year 1993-94 and was admitted for hearing, vide order dated April 13, 2004, on following substantial question of law: "Whether order of Income-tax Appellate Tribunal in reversing order of Commissioner of Income-tax (sic Commissioner of Income-tax (Appeals)) is not perverse?" As is apparent from question itself, finding of Tribunal is factual and issue is whether aforesaid finding is perverse. appellant is individual and father of minor, Aushi Aggarwal, whose income was to be clubbed in terms of section 64(1A) of Act. It is accepted and admitted position that Aushi Aggarwal had invested Rs. 1 lakh and Rs. 5,000 in Prayag Polymers (P.) Ltd. on August 18, 1992. Assessing Officer called upon assessee to explain source of said deposit made by minor, Aushi Aggarwal. appellant-assessee, to explain same, filed and relied upon declaration of gift purportedly executed by one Bhupinder Kumar, resident of Germany, who was maintaining non-resident external account in Citibank N. A., New Delhi. said declaration records that gift of Rs. 1 lakh has been made out of natural love and affection. assessee also filed copy of bank account statement of Bhupinder Kumar, cheque prepared by Bhupinder Kumar for issue of banker's cheque in favour of Aushi Aggarwal. said bank had issued certificate dated August 10, 1992, certifying that Aushi Aggarwal had been paid amount of Rs. 1 lakh by debit to non- resident external account of Bhupinder Kumar. Assessing Officer, however, did not accept said explanation for various reasons set out in assessment order and treated purported gift of Rs. 1 lakh as assessee's own income from undisclosed sources. Commissioner of Income-tax (Appeals), however, deleted said addition observing that aforesaid documents showed that gift was made by Bhupinder Kumar and it was not necessary that donor or donee should have blood relationship. He referred to section 5(1)(ii)(b) of Gift-tax Act, 1958, to effect that relationship was not condition for making gift by non-resident Indian. Accordingly, addition made by Assessing Officer was deleted. Revenue preferred appeal before Tribunal and has succeeded by impugned order dated September 17, 2002. said order records that during course of arguments, authorised representative of assessee had admitted categorically that there was no relationship between assessee- Aushi Aggarwal and Bhupinder Kumar. Therefore, Tribunal felt that assessee in this case had created evidence to cloak his own undisclosed funds as gift. Commissioner of Income-tax (Appeals) had also expressed doubts but had accepted gift in view of documents filed by assessee. Tribunal on said aspect observed that Commissioner of Income-tax (Appeals) had ignored ground reality that gifts were exchanged between known circles and were not made or received from strangers. It was recorded that as per assessee.s own statement donor and donee were strangers to each other. We are not impressed with contention raised by appellant-assessee that gift should be accepted as genuine because under section 5(1)(ii)(b) of Gift-tax Act, 1958, it is not necessary or condition that there should be relationship between donor and donee in case of gift by non-resident Indian. Gift-tax Act, 1958, is separate enactment. said Act, however, is not applicable to gifts with effect from October 1, 1998. Section 5 of said Act relates to exemption in respect of certain gifts. provision relied upon by learned counsel for assessee reads as under: 5. Exemption in respect of certain gifts.-(1) Gift-tax shall not be charged under this Act in respect of gifts made by any person- (i) of immovable property situate outside territories to which this Act extends; (ii) of movable property situate outside said territories unless person... (b) not being individual, is resident in said territories, during previous year in which gift is made;" Our attention is also drawn to clause (iic), Explanation thereto and clause (iid) to section 5(1) of Gift-tax Act, 1958, which for sake of convenience, are being reproduced below: "(iic) being citizen of India, or person of Indian origin, who is not resident in India, to any relative of such person in India, of convertible foreign exchange remitted from country outside India in accordance with provisions of Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder. Explanation.-For purposes of this clause and clause (iid),- (a) person shall be deemed to be of Indian origin if he or either of his parents or any of his grand-parents was born in undivided India; (b)'convertible foreign exchange' means foreign exchange which is for time being treated by Reserve Bank of India as convertible foreign exchange for purposes of Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder; (c)'relative' has meaning assigned to it in clause (41) of section 2 of Income-tax Act; (d)'resident in India' shall have meaning assigned to it in Income-tax Act; (iid) being citizen of India or person of Indian origin, who is not resident in India, to any relative of such person in India of property in form of any foreign exchange asset as defined in clause (b) of section 115C of Income- tax Act;" What was highlighted by senior counsel is that in clause (iic) and (iid), word "relative", which is defined in Explanation clause (c) has been used, whereas, in section 5(1)(iid), Legislature conspicuously has not used word "relative" It is difficult to accept said contention. Section 5 deals in exemption and stipulation that when gift-tax would not be charged. said provision is of no relevance and application when we examine question whether assessee has been able to prove and establish genuineness of transaction, i.e., gift, and establish source of entry made in books of account. Admittedly, in present case minor daughter of appellant had made investment of Rs. 1 lakh and when assessee was called upon to explain source of deposit/income of his daughter, assessee had submitted that Aushi Aggarwal had received gift from non-resident by name of Bhupinder Kumar. Tribunal in impugned order has not specifically referred to section 68 of Act but when we notice and read order of Assessing Officer, he has specifically recorded that addition of Rs. 1 lakh was being made as assessee had not been able to prove and establish source of income/deposit of minor, Aushi Aggarwal, and, accordingly, said amount should be treated as income from undisclosed source. On said aspect, Assessing Officer has referred to scrutiny of bank account in name of Aushi Aggarwal in Canara Bank, which was opened on August 14, 1992, with deposit of Rs. 5,100 and, thereafter, cheque of Rs. 1 lakh was deposited on August 18, 1992. On same date itself, two cheques were issued in favour of Prayag Polymers (P.) Ltd. During course of assessment proceedings, assessee was asked to prove and establish donor's capacity to make gift, relationship between assessee and Bhupinder Kumar and also to produce copy of assessment order made by tax authorities of country in which Bhupinder Kumar was residing. These details were required to establish and show genuineness of transaction relating to gift. Assessing Officer has recorded that this information was not furnished. Assessing Officer has further recorded that apparently there was no blood relationship between donor and assessee-donee and donor had not been produced for examination. capacity of donor was also not proved and established. Accordingly, Assessing Officer held that medium of gift was conduit for funnelling his own undisclosed money. Commissioner of Income-tax (Appeals) has only relied upon section 5(1)(ii)(b) of Gift-tax Act, 1958, to hold that addition could not be sustained. He, however, accepted that relationship between donor and donee had not been established. As far as production of assessment order in respect of donor was concerned, it was observed that Bhupinder Kumar was not liable to be taxed in India and, therefore, production of assessment order was not relevant. He also observed that onus of proof was discharged by assessee by disclosing identity, capacity, source and confirmation from donor. Possibly, some of information/confirmation may not have been possible for appellant-assessee to procure but close relationship, not necessarily blood relationship, between parties could have been asserted and fortified. Genuineness of transaction has to be examined by not only taking into consideration paper/documents, which were executed but surrounding circumstances are also relevant. These aspects are of significance and importance, when genuineness of transaction is in issue. gift is voluntary act, by person who out of love and affection transfers of money, movable or immovable asset to another person. Element of personal and close relationship between two is motivating factor as donor parts with and transfers what belongs to him to someone, whom he/she loves and cares. This mandates and requires close association between donor and donee, except where gifts are made for charity and philanthropic purposes. In present case, appellant merely relies upon form of declaration by Bhupinder Kumar that gift was made out of love and affection. However, it was accepted and admitted before Tribunal that donor and doneeassessee were not known to each other. Thus, statement in declaration of gift regarding love and affection was apparently mere formal proclamation. It was wrong and incorrect assertion. assessee does not plead past relationship and why and for what reason said Bhupinder Kumar felt urge and desire out of love and affection to make gift to Aushi Aggarwal, minor daughter of appellant-assessee. assessee could have explained and shown that said Bhupinder Kumar was known to him but his contention was that he was not required to show and establish relationship. Mere fact that amount paid had emanated from bank account of Bhupinder Kumar would not suffice in facts of present case. It is not necessary for Revenue to show and prove how assessee in this case through conduit had transferred and brought into books of account, undisclosed income under section 68 of Act. In fact, this section casts burden on assessee to show genuineness of transaction by establishing identity of person from whom payment was received, source of payment, which necessarily need not be confined only to details of bank account from which payment was made but also corroborating and surrounding circumstances. This has always been legal position, even prior to insertion of section 68 of Act. It was well-accepted principle that income/cash credits which are not satisfactorily explained might be assessed as income. Even long prior to introduction of section 68 in statute book, courts have held that where any amount was found credited in books of assessee in previous year and assessee offered no explanation about nature and source thereof or explanation offered was in opinion of Assessing Officer not satisfactory, sums so credited could be charged to be taxed as income of assessee for relevant previous year. Section 68 was inserted in Act only to provide statutory recognition to principle which had been clearly adumbrated in judicial decisions. whole history of introduction of sections 68 to 69D of Act and judicial decisions bearing thereupon clearly establish proposition that these sections are only clarificatory and that even otherwise addition can be made towards income from undisclosed sources (See CIT v. Orissa Corporation (P.) Ltd. [1986] 159 ITR 78 (SC), Yadu Hari Dalmia v. CIT [1980] 126 ITR 48 (Delhi), J. S. Parkar v. V. B. Palekar [1974] 94 ITR 616 (Bom), Nanak Chandra Laxman Das v. CIT [1983] 140 ITR 151 (All)). Likewise, creditworthiness of donor would depend upon income and earning of donor and whether and did he have necessary funds. Rarely one finds poor man giving gifts to rich and powerful, out of natural love and affection. In present appeal, we are considering whether order passed by Tribunal is perverse. test of perversity is whether reasonable person conversant with legal provisions would have reached to conclusion or finding under challenge. If reasoning and finding of Tribunal is plausible, we would not interfere. This test is not satisfied in present case. Keeping in view aforesaid position, we do not find that order passed by Tribunal is perverse. Accordingly, question of law is answered in favour of respondent-Revenue and against appellantassessee. appeal is disposed of. No costs. *** Pawan Kumar Aggarwal v. Income-tax Officer