MRS.IIA LALIT PATODIA,MUMBAI vs. DY CIT CC-1(1), MUMBAI

The material facts are that pursuant to search action on Balaji Group on 28/01/2015, the premises of the assessee were also covered under the search. In response to notice u/s 153A, the assessee offered returned income of Rs.5.08 Lacs which was the same as offered u/s 139(1). The assessee was saddled with various additions which are adjudicated as under: - 3. Gifts 3.1 The assessee received gifts of Rs.0.97 Lacs from her mother-in- law Smt. Santaben Vashrambhai Patodiya which was supported by gift deed and land holdings. However, bank statement was not filed. Further, donor had reflected income of Rs.1.78 Lacs only. The donor had gifted amount of Rs.4.94 Lacs to various other family members during the year. Therefore, rejecting assessee’s explanation, these gifts were added to assessee’s income as unexplained cash credit u/s 68. The Ld.CIT(A), after appreciating additional evidences, confirmed the addition by observing that the donor advanced gifts to various other members and there was no concrete income in her return of income. The donor was 3 Mrs. Ila Lalit Patodia Assessment Years: 2014-15 & 2015-16 stated to have contributed an amount of Rs.10.47 Lacs towards household expenses which was highly improbable. No agricultural income was offered by her in return of income. Aggrieved, the assessee is in further appeal before us. 3.2 We find that similar issue has been decided by us in assessee’s favor in as follows: - 3.5 Upon perusal of documents on record, we find that the mother of the assessee has declared income of Rs.1.78 Lacs during the year as miscellaneous income. However, upon perusal of her Balance Sheet as on 31/03/2014, as placed on record, it could be seen that she has capital balance of Rs.1287.32 Lacs which has been invested in various forms. This capital balance is arrived at after reducing Gifts of Rs.4.94 Lacs and withdrawals of Rs.10.47 Lacs. The source of gift, in our opinion, could not solely be the current year’s income particularly in view of the fact that the mother of the assessee was on old lady and living in a joint family. There is no adverse material to prove the gifts. Therefore, the conclusion drawn by Ld. CIT(A) could not be sustained and we are inclined to delete the addition of Rs.1 Lacs.

4. Unsecured Loans 4.1 The assessee received unsecured loan of Rs.0.45 Lacs from Jiviben G. Vora which was added to her income in the absence of return of income and bank statement of the lender. The Ld. CIT(A) confirmed the same by observing that the lender was not an Income Tax assessee and had not filed any return of income. No material was placed in support of the submissions that the lender earned agricultural income. Aggrieved, the assessee is in further appeal before us. 4.2 Upon perusal of documents, we find that the assessee has placed on record confirmation of the lender. The lender has been allotted PAN. The loan is supported by the affidavit of the lender. This affidavit also 4 Mrs. Ila Lalit Patodia Assessment Years: 2014-15 & 2015-16 contains the details of agricultural land holding of the lender. It has also been confirmed that Income Tax Return was not filed since the income was below exemption limit. We find that the unsecured loan is duly substantiated and in the absence of any adverse material, the addition is not sustainable in law. By deleting the same, we allow this ground of appeal.