SMT.TEJO RANI,HOSPET vs. DEPUTY COMMISSIONER OF INCOME-TAX, BANGALORE

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ITA 2064/BANG/2016Status: DisposedITAT Bangalore24 November 2017AY 2009-102 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that a gift transaction cannot be deemed non-genuine solely because it was made in cash. The identity and creditworthiness of the donor (husband) were not in doubt as he was assessed by the same AO and had substantial capital. Therefore, the addition made by the AO was deleted.

What were the facts?

The assessee received a gift of Rs. 11 lacs from her husband. The Assessing Officer (AO) made an addition on the grounds that the gift was in cash and through banking channels, questioning its genuineness. The assessee challenged the validity of the assessment order and the addition on merit.

What were the issues?

The primary issues were the validity of an assessment order passed under Section 153C and the genuineness of a cash gift received by the assessee from her husband.

Which sections of the Income-tax Act were involved?

Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCH ‘SMC-B’, BANGALORE

Before: SHRI A.K.GARODIA, ACCOUNANT MEMBER

For Appellant: Shri Balachandran, Advocate
For Respondent: Shri Palani Kumar, Addl. CIT

O R D E R PER A. K. GARODIA, A.M.:

This appeal is filed by the assessee which is directed against the order of CIT (A) – 11, Bangalore dated 31.08.2016 for A. Y. 2009 – 10.

2.

The assessee has raised several grounds but only two issues are involved. First issue is about validity of assessment order passed u/s 153c and the issue on merit is about addition of Rs. 11 lacs being gift received by the assessee from her husband.

3.

At the very outset, it was pointed out by the bench that in the technical grounds raised about validity of assessment order passed u/s 153c, two aspects are raised that 1) no incriminating material was found and no satisfaction was recorded by the AO of the searched person but no such ground was raised before CIT 9a) and therefore, the same cannot be raised before the tribunal except by filing additional ground. In reply, Learned AR of the assessee submitted that the issue on merit may be decided. Regarding merit, he submitted that the gift is shown by the donor i.e. the husband of the assessee Shri G. Ravikumar and he is also assessed by the same AO. He submitted a copy of the assessment order dated 28.03.2013 passed by the same AO and also filed a copy of his Capital Account and balance sheet. He pointed out that the husband of the assessee is having a capital of Rs. 703.52 lacs as on 31.03.2009 and hence, his creditworthiness cannot be doubted. Identity also cannot be doubted because he is assessed by the same AO and genuineness is also not doubtful in view of the relationship of spouse. Learned DR of the revenue supported the orders of the authorities below.

4.

I have considered the rival submissions. I find that the objection of the AO is this that since the gift is claimed by way of cash and through banking channel, transaction is not genuine. In my opinion, this cannot be said that a gift transaction is not genuine merely because it is in cash. No other reason is given by the AO for holding it as non genuine. Identity and credit worthiness cannot be doubted because he is assessed by the same AO and he is having capital of Rs. 703.52 lacs as on 31.03.2009. Hence, I delete this addition.

5.

In the result, the appeal of the assessee is partly allowed.

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