2014 (6) TMI 842 - AT - Income Tax

Confirmation of addition Receipt of gifts from son Held that - The documents are prima facie sufficient to hold the genuineness of the transactions and also the source of the credit entries made in the assessee s book - The creditworthiness and the capacity of the donor also cannot be doubted also for the reason that he is the managing director of the British company through which he has remitted the sum and has also confirmed the same before the AO in person - his Balance Sheet filed in India shows investment of more than Rs. 10.25 crores as on 31st March 2008 - once all these documents and evidences have been furnished, the primary onus of the assessee stands discharged and the onus shifts upon the AO to prove that the assessee s explanation as well as the evidences are not tenable on the basis of any material collected by way of enquiry. Simply because such a transaction of gift has not been mentioned in the income tax return of income of the donor filed in India, it cannot lead to any inference that he did not had the capacity - being a resident of U.K., he is required to disclose the source in the return of income filed in the U.K - factum of gift transaction is between son and father, there was no reason to hold that such a gift is not genuine thus, the order of the CIT(A) is set aside Decided in favour of Assessee.

Summary

Issues involved:
Challenge to addition of gift amount in assessment under Income Tax Act, 1961 for assessment year 2008-09.

Detailed Analysis:

1. Facts in brief:
The assessee, an individual with income mainly from interest, received a gift of Rs. 21,16,265 from his son, a resident of London. The Assessing Officer added this amount to the assessee's income, questioning the reason for the gift and linking it to house repair expenditures.

2. Primary onus of establishing the gift:
The assessee provided various documents to establish the gift, including gift deeds, confirmations from companies, bank statements, and the donor's income tax return. The Assessing Officer rejected the explanation, leading to the appeal.

3. Capacity of the donor and genuineness of the gift:
The Commissioner (Appeals) questioned the capacity of the donor, citing discrepancies in income tax returns and legal precedents. The burden of proof for the genuineness of the gift was placed on the donee.

4. Appellate Tribunal's analysis:
The Tribunal considered the evidence presented by the assessee, including gift deeds, company certificates, and bank statements, as sufficient to establish the genuineness of the gift and the donor's capacity. The Tribunal emphasized the need to prove the source of credit entries in the books of the assessee.

5. Conclusion and Judgment:
The Tribunal ruled in favor of the assessee, stating that the documents provided by the assessee sufficiently proved the genuineness of the gift transaction. The Tribunal highlighted the donor's position as a managing director of a British company and the substantial investments shown in his Balance Sheet as supporting evidence. The addition of the gift amount to the assessee's income was deleted, and the appeal was allowed.

This detailed analysis covers the issues involved in the legal judgment comprehensively, highlighting the key arguments, evidence presented, and the final decision of the Appellate Tribunal.