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Income Tax Appellate Tribunal, ‘SMC’ ‘C’ BENCH, CHENNAI
Before: Shri A. Mohan Alankamony
आदेश / O R D E R
This appeal by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals)-13, Chennai dated 30.05.2016 in for the assessment year 2009-10 passed u/s.250(6) r.w.s.143(3) of the Act.
The assessee has raised several grounds in her appeal, however the cruxes of the issue are that the (i) The Ld.CIT(A) has erred in confirmation the addition made
by the Ld.AO amounting to Rs.5 lakhs being the gift received from the assessee’s son.
(ii) The Ld.CIT(A) has erred in confirming the addition made by the Ld.AO amounting to Rs.96,000/- towards low drawing.
The brief facts of the case are that the assessee is an individual earning income from de-husking of paddy grains, filed her return of income for the assessment year 2009-10 on 11.03.2010 and the same was processed U/s.143(1) of the Act, on 06.07.2010. Thereafter the case was selected for scrutiny and the assessment was reframed wherein the Ld.AO had made addition of Rs.5 lakhs towards unexplained gifts and Rs.96,000/- towards poor drawing.
Ground No. 2(i) : Unexplained gift of Rs.5 lakhs:-
During the course of scrutiny assessment, it was observed by the Ld.AO that the assessee had claimed to have received gift of Rs.20 lakhs from her son Shri B. Krishnasamy. On further perusal of the issue it was found that gift received from her son to the extent of Rs.15 lakhs was genuine. However the assessee could not establish the gift of the remaining amount of Rs.5 lakhs. She had explained that the amount of Rs.5 lakhs was withdrawn by her son from bank accounts on different dates amounting to Rs.2 lakhs & Rs.3 lakhs which were handed over to her. However the Ld.A.O found that Shri B. Krishnasamy had not handed over the aforesaid amount to her. Later the assessee shifted her stand by stating that the amount of Rs.5 lakhs was received from her daughter Smt. Rajeswari Balakrishnan. The source of Rs.5 lakhs was said to be the amount received from Smt. Rajeswari Balakrishnan’s brother amounting to Rs.8,39,120/- which was transferred to her NRE account. Since the assessee had taken different stand on different occations the Ld.AO opined that the gift amount of Rs.5 lakhs cannot be treated as genuine and therefore added the same to the income of the assessee.
4.1. On appeal the Ld.CIT(A) confirmed the order of the Ld.AO because in the remand report it was revealed that the gifts claimed to have been received amounting to Rs.5 lakhs is not a direct gift from the donor to the donee but it was routed through circuitous manner leading to the doubt that the assessee was only attempting to account for the source of the gifts which she had not received.
4.2 Before us the Ld.AR argued by submitting that the source of the gift was established and the Ld.Revenue authorities had treated the gift of Rs.5 lakhs as unexplained based on presumptions. It was therefore pleaded that the addition made for Rs.5 lakhs as unexplained gift may be deleted. The Ld.DR on the other hand argued in support of the Ld.Revenue authorities.
4.3 I have heard the rival submissions and carefully perused the material on record. From the facts of the case, it is apparent that the source of the gift is genuine and accounted. Additions had been made by the Ld.Revenue authorities only because the assessee had taken different stand on different occasions and had also un convincingly explained that the source of the gift of Rs.5 lakhs was the amount received by the assessee’s daughter from her son which was finally passed on to her. Considering these facts, I do not find any merit in the order of the Revenue authorities. It is a normal practice to pass on cash between family members on different occasions and sometime even to receive back the amount advanced. This kind of transfer of funds between the family members cannot be treated as dubious transactions. In the case of the assessee the source of the fund and the source of the source of the fund have been established and are not disputed. Therefore, it is not right on the part of the Ld.AO and the Ld.CIT(A) to hold that the gift received by the assessee amounting to Rs.5 lakhs as not genuine. Hence, I hereby direct the Ld.AO to delete the addition made by the Ld.AO amounting to Rs.5 lakhs towards unexplained gift.
Ground No. 2 (ii) : Addition of Rs.96,000/- towards low drawing:-
It was noticed by the Ld.AO that the assessee had disclosed drawing as Rs.24,000/- for the entire previous year.
Considering the status of the assessee and the way of living the Ld.AO opined that the assessee should have incurred at least an expenditure of Rs.10,000/- per month for her family maintenance. Therefore the Ld.AO added Rs.96,000/- to the income of the assessee towards poor drawing. On appeal, the Ld.CIT(A) agreeing with the views of the Ld.AO confirmed his order. I do not find any merit in this addition made by the Revenue authorities on this issue. As explained by the 6 assessee, the assessee’s children were Non-residents and had enough sourced to provide funds to their parents. In this situation, it is not necessary to presume that the assessee and her family were spending money for their personal maintenance from their unaccounted income. Therefore, I hereby direct the Ld.AO to delete the addition made for Rs.96,000/- in the hands of the assessee towards poor drawing.
In the result, the appeal of the assessee is allowed.
Order pronounced on the 13th September, 2017 at Chennai.