2012 (8) TMI 496 - HC - Income Tax

Undisclosed income - Search and seizure - addition u/s 68 made of difference in value of property purchased at Rs 71.35 lacs and seized document in the handwriting of the father of the assessee showing the property valued at Rs.80.00 lacs - Held that - Document found during the search has been explained satisfactorily viz. that it is the resale value of the property and the figures were recorded only for the purpose of distribution of the property within the family. Gifts - addition - assessee furnished copies of the pass books, income tax details and PAN of the donors - Held that - Respondent has sufficiently discharged the onus casts upon her to establish the source of gifts and credit worthiness of the donors. Genuineness of gift held by appellate authorities. Both the findings being pure findings of fact are not alleged to be perverse. Consequently no substantial question of law arises - Decided against Revenue

Summary

Issues:
1. Addition of Rs.8.65 lacs made by the Assessing Officer for purchase of Candy House property.
2. Addition of Rs.22,75,000/- as gifts received from various donors.

Issue 1 - Addition of Rs.8.65 lacs for Candy House property:
The appeal by the revenue under Section 260A of the Income Tax Act challenged the deletion of Rs.8.65 lacs addition made by the Assessing Officer for the purchase of Candy House property. The Tribunal and Commissioner of Income Tax (Appeals) held that no cash beyond the documented consideration of Rs.71.35 lacs was paid by the respondent-assessee for the property. The seized paper showing Rs.80.00 lacs value was explained as a rough measure for property division in the family. The appellant failed to provide additional evidence to support the claim of excess payment. The High Court dismissed the appeal, stating that no substantial question of law arose.

Issue 2 - Addition of Rs.22,75,000/- as gifts received:
The Assessing Officer treated Rs.22.75 lacs received as gifts by the respondent from cousins as undisclosed income, alleging lack of genuineness. However, the Commissioner of Income Tax (Appeals) found the gifts genuine, supported by evidence of financial assistance provided by the respondent's father to the cousins during tough times. The gifts were made through account payee cheques from a refund, with detailed documentation provided. The Tribunal upheld the Commissioner's decision. The High Court noted that the respondent adequately proved the source and credibility of the gifts, and as the findings were based on evidence, no substantial question of law arose. The appeal was dismissed.

In conclusion, the High Court upheld the decisions of the Tribunal and Commissioner of Income Tax (Appeals) in both issues, dismissing the appeal by the revenue.