2015 (7) TMI 403 - AT - Income Tax

Addition u/s 68 - CIT(A) deleted the addition - Held that - The assessee received the first gift of ₹ 2 lacs from Sh. Parveen Kumar. In the course of her statement recorded by the Assessing Officer, it was stated that Sh. Parveen Kumar is a close friend of her husband who gifted this amount on the occasion of her marriage anniversary. As regards the Inspector s report that Sh. Parveen Kumar was not traceable at the given address, we find that the assessee furnished not only the copy of ration card but also of the PAN card and other evidence divulging the correct address of Sh. Parveen Kumar which was given to the Assessing Officer. There cannot be any reason to accept the view point of the Assessing Officer that PAN and ration card can also be fraudulently obtained.learned CIT(A) was right in accepting the assessee s contention about the genuineness of the gift received by the assessee from Sh. Parveen Kumar. As regards the gifts received from NRI donors, namely, Sh. Manmeet Pal Singh and Sh. Harminder Singh, we find that the assessee categorically stated before the Assessing Officer during the course of her statement that both these persons are real brothers and their father Sh. Ajit Singh is very close friend of her father-in-law, Sh. Gurucharan Singh. Both these persons were stated to be family friends. Not only that, the assessee also gave personal particulars of these donors by explaining the nature of business carried out by them and also the names of their children. The assessee also submitted that the gifts were made by these two persons on the occasion of birthday of her daughters. A copy of the bank NRI account of Sh. Harminder Singh for six months period from 01.04.2002 to 30.09.2002 disclosed total deposits credited to his account at ₹ 51.61 lac, out of which a sum of ₹ 7 lacs was gifted to the assessee. During the same six months period, there were credits in the bank NRI account of Sh. Manmeet Pal Singh to the tune of ₹ 31.60 lac, out of which a sum of ₹ 8 lacs was gifted to the assessee. Thus no hesitation in holding that the assessee discharged her burden in not only proving the identity of the donors, but also their capacity and genuineness of the gift transactions. - Decided against revenue.

Summary

Issues:
Deletion of addition under Section 68 of the Income-tax Act, 1961 relating to gifts received by the assessee from various donors.

Analysis:
The appeal involved the deletion of an addition of Rs. 17.00 lac made by the Assessing Officer under Section 68 of the Income-tax Act, 1961. The assessee received gifts totaling Rs. 17 lacs from three different donors. The first two donors were Non-Resident Indians, and the third donor was an Indian resident. The Assessing Officer raised concerns regarding the genuineness of these gifts and called for evidence to substantiate the same.

The assessee provided various documents to support the gifts received, including gift deeds, affidavits, bank certificates, and other relevant paperwork. However, the Assessing Officer questioned the identity of the Indian donor, Sh. Parveen Kumar, as he could not be produced for verification. Despite the submission of multiple documents by the assessee, the Assessing Officer refused to accept the genuineness of the gifts, citing the possibility of fraudulent acquisition of documents like PAN and ration cards.

Regarding the gifts from the Non-Resident Indian donors, the Assessing Officer conducted inquiries with the Citi Bank and found discrepancies in the timing of deposits in their accounts compared to the gifts given to the assessee. The Assessing Officer also noted that the assessee had not made any gifts to these donors and had not visited them in Singapore. Consequently, the Assessing Officer added Rs. 15 lacs under Section 68 of the Act due to the lack of blood relation between the donors and the assessee.

Upon appeal, the CIT(A) reviewed the evidence and concluded that the gifts were genuine. The CIT(A) accepted the explanations provided by the assessee regarding the donors' identities, relationships, and the nature of the gifts. The CIT(A) found that the assessee had sufficiently proven the genuineness of the gifts received from both the Indian and Non-Resident Indian donors.

The Appellate Tribunal upheld the CIT(A)'s decision and approved the deletion of the addition of Rs. 17 lacs made by the Assessing Officer under Section 68 of the Act. The Tribunal found that the assessee had successfully discharged the burden of proving the identity, capacity, and genuineness of the gift transactions. Consequently, the appeal was dismissed, and the decision was pronounced on 18.3.2015.