SUJIT AGARWAL,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(2), HYDERABAD

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ITA 1620/HYD/2018Status: DisposedITAT Hyderabad07 April 2021AY 2013-143 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the gifts received from the sister were not unbelievable given her financial position and that the sister had confirmed the gifts. Therefore, the additions made under Section 68 were inappropriate.

What were the facts?

The assessee received gifts from his sister, which the Assessing Officer (AO) treated as cash credit under Section 68 of the Income Tax Act. The AO made additions of Rs. 2,30,000 for AY 2010-11 and Rs. 6,00,000 for AY 2013-14, considering the source of the gift to be undisclosed income.

What were the issues?

Whether gifts received from a sister can be treated as undisclosed income under Section 68 of the IT Act without sufficient evidence to disprove the genuineness of the gift.

Which sections of the Income-tax Act were involved?

Section 68,Section 132,Section 153A,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad

Before: Shri A. Mohan Alankamony & Shri S.S. Godara

Hearing: 09/02/2021Pronounced: 07/04/2021

These two appeals are filed by the assessee, aggrieved by the order of the learned CIT (A)-12, Hyderabad, in Appeal Nos.10401 & 10402/2017-18 for the A.Ys 2010-11 & 2013-14 respectively, both dated 30.05.2018.

2.

In both the appeals, the assessee has raised identical grounds viz., the learned CIT (A) has erred in confirming the additions made by the learned AO for Rs.2,30,000 for the A.Y 2010-11 and Rs.6,00,000 for the A.Y 2013-14 treating the gift received from the assessee’s sister as cash credit u/s 68 of the I.T. Act.

3.

Brief facts of the case are that the assessee is an individual and Managing Director of M/s. Sawaria Pipes (P) Ltd. A search u/s 132 of the Act was conducted in the case of the assessee and his group and subsequently notice u/s 153A of the Act was issued. Thereafter, the assessment was completed u/s 143(3) r.w.s. 153A of the Act on 24.11.2017 for the A.Ys 2010-11 and 2013-14 wherein the learned AO made addition of Rs.2,30,000 and Rs.6,00,000 respectively invoking the provisions of section 68 of the Act by treating the gift received from the assessee’s sister as his undisclosed income, which was further upheld by the learned CIT (A).

4.

the learned Revenue Authorities arrived at this conclusion because sufficient evidence was not produced before the Revenue to establish the source of Smt. Sarika Agarwal.

5.

At the outset, we do not see much merit in the order of the learned Revenue Authorities. Considering the status and financial position of Smt. Sarika Agarwal, the meagre amount of Rs.2,30,000 and Rs.6,00,000 gifted by her to her brother, is not a dis-believable proposition. The gift made by Smt. Sarika Agarwal to her brother was also confirmed by her. Hence the additions made in the hands of the assessee invoking the provisions of section 68 of the Act is not appropriate. Therefore, in the interest of justice, we hereby direct the learned AO to delete the additions made for Rs.2,30,000 and Rs.6,00,000 in the hands of the assessee u/s 68 of the Act for the A.Ys 2010-11 and 2013-14 respectively.

6.

In the result, both the appeals of the assessee are allowed. Page 2 of 3 Order pronounced in the Open Court on 7th April, 2021.

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