2019 (1) TMI 1413 - HC - Income Tax

Addition of gift u/s 68 - AO did not accept the assessee s version of having received a gift and added the same as his income - Held that - The perusal of the order of the CIT(A) would show that after taken into account the evidence on record, the Commissioner found that the source of gift, genuineness as well as creditworthiness of the donor were duly established. The entire issue is thus based on facts. The Revenue does not seem to have raised any objection before the Commissioner regarding placing reliance on additional evidence. In any case, the documents produced by the assessee were from the department itself or in the nature of bank statements. If the Assessing Officer who was admittedly participating in the appeal proceedings wanted to rebut such evidence, he could have insisted for such an opportunity being granted.

Summary

Issues:
1. Admission of additional evidence without giving opportunity of rebuttal to the department.
2. Disallowance of foreign traveling expenses.

Issue 1: Admission of additional evidence without giving opportunity of rebuttal to the department

The first issue in this case pertains to a gift of &8377; 3.18 Crores received by the assessee from his brother during the relevant assessment year. The Assessing Officer added this amount as income, as he did not accept the assessee's claim of receiving a gift. However, before the Commissioner (Appeals), the assessee produced additional evidence that established the creditworthiness of the brother to provide such a substantial gift. The Commissioner (Appeals) thoroughly examined the evidence and concluded that the brother had the means to give the gift, and the gift's source, genuineness, and creditworthiness were all established. Consequently, the Commissioner deleted the addition. The Revenue contended before the Tribunal that the additional evidence was admitted without allowing the department an opportunity to rebut it. The Tribunal upheld the Commissioner's decision, providing separate reasons. The High Court, after considering the arguments, found no error in the Tribunal's decision. It noted that the Assessing Officer could have requested an opportunity to rebut the evidence if needed, as the documents provided were either from the department or in the form of bank statements.

Issue 2: Disallowance of foreign traveling expenses

The second issue concerns the disallowance of foreign traveling expenses. The Tribunal had restricted the disallowance to &8377; 1,00,000 despite the assessee only submitting evidence of &8377; 3,89,304 out of total expenses of &8377; 11,78,881. The Revenue questioned the Tribunal's decision on this matter. However, the High Court determined that this issue was purely fact-based, and no legal question arose from it. Therefore, the High Court dismissed the Income Tax Appeal.