2009 (11) TMI 40 - HC - Income Tax

Unexplained gift The assessee claimed to have received a gift of Rs.5 lac from his maternal uncle Ramesh Arora but the said amount was added to his income by the Assessing Officer, as undisclosed income - CIT(A) and ITAT deleted the addition of Rs.5,00,000/- on account of unexplained gift held that - In view of concurrent finding of fact recorded by the CIT(A) and the Tribunal that the gift was genuine, no substantial question of law arises - This fact was not disputed that the maternal uncle i.e. Shri Ramesh Arora is the proprietor of M/s Rachna Exports and the cheque was issued by him. It is not a condition precedent that only the cheques/draft/ amount issued from personal bank account is only allowable for making any gift. The ingredients of making gift are duly satisfied in the present appeal. decided in favor of assessee.

Summary

Issues:
Appeal under Section 260A of the Income Tax Act, 1961 against the deletion of addition of Rs.5,00,000 made on account of unexplained gift.

Analysis:
The appeal was filed by the revenue against the order of the Income Tax Appellate Tribunal regarding the addition of Rs.5,00,000 as undisclosed income due to an unexplained gift received by the assessee. The assessee claimed that the gift was received from his maternal uncle, and the CIT(A) accepted the genuineness of the gift, a decision which was upheld by the Tribunal. The Tribunal found that the gift met the necessary criteria for being genuine, as the donor's identity and capacity were not in doubt, and the donor, who was the maternal uncle of the assessee and a proprietor of a business, was capable of making such a gift. The Tribunal cited previous decisions from the High Court to support their conclusion, emphasizing that no evidence was presented to suggest that the amount in question belonged to the assessee. Additionally, the Tribunal examined the accounts of the donor's business, where a specific entry related to the gift was identified.

The High Court, in its judgment, noted the concurrent findings of fact by the CIT(A) and the Tribunal that the gift was indeed genuine. Consequently, the Court concluded that no substantial question of law arose from the case and dismissed the appeal filed by the revenue. The judgment was delivered by Hon'ble Mr. Justice Adarsh Kumar Goel and Hon'ble Mr. Justice Gurdev Singh on November 6, 2009.