2013 (10) TMI 711 - AT - Income Tax

Additions u/s 68 - genuineness of gift - Held that - assessee has submitted all the necessary documents which were required. As is evident from the Hon ble Apex Court decision in C.I.T. vs. Orissa Corporation Pvt. Ltd. 1986 (3) TMI 3 - SUPREME Court non-turning up of the donor on Assessing Officer s summons, cannot be fatal to make the gift bogus. Accordingly, in the background of the aforesaid discussions and precedent, we set aside the orders of the authorities below on this issue and hold that the assessee has properly explained the gift of Rs. 2,00,000/- and addition made in this regard is deleted - Decided in favour of assessee.

Summary

Issues involved:
1. Validity of assessment order passed under sections 147/143(3) without serving mandatory notice u/s 148.
2. Addition of Rs. 2,00,000/- as income from unexplained source u/s 68 of the I.T. Act, 1961.
3. Justification of charging interest u/s. 234A, 234B, and 234C of the I.T. Act, 1961.

Issue 1 - Validity of assessment order under sections 147/143(3) without serving notice u/s 148:
The appeal challenged the Ld. CIT(A)'s confirmation of the action by Ld. AO in passing the assessment order u/s. 147/143(3) without serving the mandatory notice u/s 148, valid approval, recording reasons for income escape, and complying with prescribed conditions. The appellant argued non-compliance with statutory requirements. However, the Tribunal did not address this issue specifically due to allowing the appeal on another ground.

Issue 2 - Addition of Rs. 2,00,000/- as income from unexplained source:
The case involved the receipt of Rs. 2,00,000/- as a gift, challenged by the appellant. The AO initiated proceedings based on information alleging a bogus entry from Shri Vipin Kumar. The appellant provided documents such as affidavit, gift deed, PAN card, and bank statement of the donor to establish the gift's veracity. The Tribunal noted that all necessary particulars to prove the donor's identity, creditworthiness, and genuineness were submitted. Citing a precedent, the Tribunal ruled in favor of the appellant, stating that the AO failed to establish the gift as a bogus entry, thus deleting the addition.

Issue 3 - Charging of interest u/s. 234A, 234B, and 234C:
The appellant contested the charging of interest under these sections by Ld. CIT(A). However, the Tribunal did not address this issue separately as the main issue regarding the addition of income from an unexplained source was decided in favor of the appellant, leading to the appeal being allowed.

In conclusion, the Tribunal allowed the appeal, overturning the addition of Rs. 2,00,000/- as income from an unexplained source due to the appellant successfully proving the genuineness of the gift. The Tribunal did not delve into the validity of the assessment order under sections 147/143(3) or the charging of interest under sections 234A, 234B, and 234C, as the decision on the primary issue rendered these aspects moot.