Queries on a tax evasion petition.

Dear experts,

This query pertains to tax evasion.

A person claims to have spent huge amount of *unaccounted* money (in tune of over 30 lakhs) in marriage of his daughter. A tax evasion petition was filed against this person and a notice under Income Tax Act was issued. Upon asked to reveal his sources of such huge amount of money, he submits as follows: -

1. That he received 400 gms of gold from his deceased father in law in year 1976.
2. That he received 200 gms of gold from his own parents in year 1976 during his marraige.
3. That he received 40 gms of gold from his deceased sister in year 2005.
4. That he received another 40 gms of gold from his sister in law
5. That an amount of over 8 lakhs was contributed by his neighbors and extended family

All of the above submissions have been made verbally and absolutely NO supporting evidence has been produced that such transactions ever happened. Two affidavits signed by his deceased father in law (he was alive then) as well as his sister in law were submitted that they gifted those articles but there is no proof (bills, photographs etc.) The above submissions were made to the Income Tax Officer and surprisingly, he has given a clean chit to the person and closed the Tax Evasion Petition. From my knowledge, there are numerous such cases where the person making false submissions were penalized heavily by Income Tax Department.

My queries are: -

1. What are the tax implications of aforementioned transactions?
2. Can a person simply claim that he received a huge amount of money by his family, friends and neightbors without any supporting evidence?
3. Do you think the Income Tax Officer has decided the Tax Evasion Petition wisely and without any prejudice?
4. Can you please quote relevant sections from the Income Tax Act to contend the decision of Income Tax Officer?

HELP.... please!

Kind Regards,
CC