2015 (9) TMI 377 - AT - Income Tax

Income from unexplained source - gift received from the members of the assessee s family - Held that - The assessee had submitted cash flow statements, bank statements and affidavits from his wife and daughter in law for having received ₹ 23 lakhs. When the assessee had made such submissions, it is the duty of the Revenue to examine the veracity of the claim of the assessee by examining the source of the donee either by summoning them or by verifying the documents furnished by the assessee/donee. We do not find any such attempt made by the Revenue in the case before us. Moreover, though the reasons stated by the Ld. Assessing Officer and the Ld. CIT (A) appears to have some merits, a detail finding on the submissions of the assessee with respect to the gift received from donors is lacking. Therefore in the interest of justice we remit the matter back to the file of the Ld. Assessing Officer for denovo consideration. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
- Justification of adding gift received from family members to income as "income from unexplained source."

Analysis:
1. The appeal was filed by the Assessee against the order of the Commissioner of Income Tax (A) confirming the addition of a gift received from family members to the Assessee's income as "income from unexplained source."
2. The Assessee, engaged in the transport business, initially admitted an income of &8377; 29,54,278/- but later the Assessing Officer added &8377; 23 lakhs as income from unexplained sources based on discrepancies in disclosed income.
3. The Assessing Officer rejected the details provided by the Assessee, citing reasons like undated gift deeds, delayed cash flow statements, and suspicious transactions like obtaining a loan after admitting undisclosed income.
4. The Commissioner of Income Tax (A) agreed with the Assessing Officer, considering the lack of verifiable evidence for the gifts and the timing of transactions, concluding that the gifts were an afterthought.
5. During the appeal, the Appellate Tribunal observed that while the Assessing Officer's and Commissioner's reasons had some merit, a detailed examination of the gift claims was lacking, and the Revenue had not verified the donors or documents provided by the Assessee.
6. The Tribunal remitted the matter back to the Assessing Officer for a fresh consideration, directing the Assessee to cooperate with the Revenue and submit any additional documents to support the gift claims for a fair assessment.
7. The appeal of the Assessee was allowed for statistical purposes, emphasizing the need for a thorough examination of the gift claims to ensure a just decision.

This detailed analysis highlights the procedural discrepancies in assessing the gift received by the Assessee from family members and the need for a comprehensive review of the evidence to determine the legitimacy of adding the gift amount to the Assessee's income under the category of "income from unexplained source."