2011 (9) TMI 1144 - AT - Income Tax

Summary

Issues Involved:

1. Deletion of addition on account of inadequate household withdrawal.
2. Deletion of addition on account of gift received.

Summary:

Issue 1: Deletion of addition on account of inadequate household withdrawal

The Revenue challenged the deletion of an addition of Rs. 1,08,000 made by the AO u/s 69C of the IT Act, 1961, on account of inadequate household withdrawals. The AO had estimated household expenses at Rs. 3,00,000 based on the assessee's social status and standard of living, while the assessee had shown withdrawals of Rs. 1,92,000 and additional expenses of Rs. 3,37,857 for electricity and education. The CIT(A) deleted the addition, stating that the AO had not provided any material evidence to justify the higher estimate. The Tribunal upheld the CIT(A)'s decision, noting that the AO failed to bring sufficient material on record and did not discuss the past history of the case or cite any comparable cases.

Issue 2: Deletion of addition on account of gift received

The Revenue also contested the deletion of an addition of Rs. 10,00,000 made by the AO, who treated the cash gifts received by the assessee from his brother-in-law as non-genuine. The AO's reasons included the failure to produce the donor, the donor's limited financial capacity, and the lack of a valid occasion for the gift. The CIT(A) deleted the addition, noting that the assessee had provided sufficient evidence, including an affidavit from the donor, confirmation letters, and bank statements showing the source of the funds. The Tribunal upheld the CIT(A)'s decision, emphasizing that the assessee had proved the identity, capacity, and genuineness of the transaction, and the AO had not provided material evidence to the contrary.

Cross-Objection:

The assessee's cross-objection was dismissed as not pressed.

Conclusion:

The appeal by the Revenue and the cross-objection by the assessee were both dismissed.