RAJINDER SINGH ,SHIMLA vs. INCOME TAX OFFICER, SHIMLA, SHIMLA
Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
PER RAJ PAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 22.01.2024 passed for assessment year 2016-17. 2. The solitary grievance of the assessee is that ld. CIT(A) has erred in confirming the addition of Rs.2,21,43,304/- A.Y.2016-17 2
which was added by the AO by treating it as a deemed gift under Section 56 of the Income Tax Act, 1961. 3. The brief facts of the case are that assessee has filed his return of income on 21.09.2016 declaring total income of Rs.12,20,350/-. The case of the assessee was selected for a limited scrutiny and a notice under Section 143(2) was issued and served upon the assessee. The ld. AO has passed a scrutiny assessment under Section 143(3) on 15.10.2018. He accepted the returned income of the assessee. The ld.
Commissioner thereafter took cognizance under Section 263
of the Income Tax Act. He was of the opinion that the AO has not investigated the issue of foreign remittance amounting to Rs.2,21,43,304/- which was alleged to be received by the assessee from his son as a gift. The ld. CIT passed a 263 order on 12.03.2021 and set aside the assessment order directing the AO to frame denovo assessment.
4. The ld. AO has passed a fresh assessment order under Section 143(3) read with Section 263 of the Act on 30.03.2022 and made addition of Rs.2,21,43,304/-.
A.Y.2016-17
3
The appeal to the CIT(A) did not bring any relief to the assessee. 6. With the assistance of ld. Representative, we have gone through the record carefully. It emerges out from record that assessee's son Shri Gagandeep Singh is resident of Australia. He was Director in two companies, M/s G.G. Sales and Marketing Pty Ltd. According to the assessee, it was a gift from his son which is not taxable under Section 56(ii)vii) of the Act, being taken from blood relative. The ld. AO has erred in disbelieving this fact. We find that assessee has filed two Paper Books running into 67 pages and 39 pages. It has also filed audited accounts of G.G. Sales and Marketing Pty Ltd. The company has given loan to shareholders which was transferred to the assessee. The only fault at the end of the assessee is that his son instead of first transferring the amounts to his personal account and thereafter transferring it to India, directly requested his companies where he was a Director to transmit the money from the company’s accounts. The company has shown assessee's son as the debtor in its audited account. A.Y.2016-17 4
Complete details have been submitted before the AO. To our mind, AO has erred in appreciating the facts in right perspective. Once it has been demonstrated that the money has percolated to the assessee from his son, then no addition ought to have been made. The alleged irregularity by receipt of money directly from the company’s accounts has duly been explained by the assessee. Therefore, we allow the appeal of the assessee and delete the additions.
7. In the result, appeal is allowed.
Order pronounced on 07.04.2025. (KRINWANT SAHAY)
VICE PRESIDENT
“Poonam”
आदेश क ितिलिप अ ेिषत/ Copy of the order forwarded to :
अपीलाथ/ The Appellant 2. यथ/ The Respondent 3. आयकर आयु/ CIT 4. िवभागीय ितिनिध, आयकर अपीलीय आिधकरण, चडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File
आदेशानुसार/ By order,
सहायक पंजीकार/