MEHUL CHANDRAKANT PATEL,MUMBAI vs. ITO WD 16(1)(1), MUMBAI

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ITA 3553/MUM/2013Status: DisposedITAT Mumbai26 June 2017AY 2005-063 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 assessee had discharged the onus of proving the identity, creditworthiness, and genuineness of the gift. The Tribunal relied on a prior order of the CIT(A) which had accepted the Foreign Remittance Certificate and deleted a penalty related to this disallowance.

What were the facts?

The assessee received a gift from a relative, which the Assessing Officer treated as an unapproved cash credit under Section 68. The assessee provided details of the gift, but initially could not produce a Foreign Remittance Certificate.

What were the issues?

Whether the gift received from a relative was genuine and properly substantiated to avoid addition under Section 68 of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Assessee by : Shri K.P. Kapadia (AR) Revenue by : Shri Suman Kumar (DR) Date of hearing : 11.04.2017 Date of Pronouncement : 26.05.2017 Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee u/s 253 of the Income-tax Act (‘the Act’) is directed against the order of ld. CIT(A)-5, Mumbai dated 23.01.2013 for AY-2005-06. The solitary ground of appeal raised by assessee raised is “that ld. CIT(A) erred in confirming the addition of Rs. 14,41,368/- u/s 68 of the Act by disallowing gift received from relative.

2. Brief facts of the case are that the assessee filed return of income for relevant AY on 29.08.2005 declaring total income of Rs. 4,14,650/-. The assessment was completed u/s 143(3) of the Act on 20.12.2007. The Assessing Officer (AO) while passing the assessment order made the addition of Rs. 14,41,368/- on account of non-genuineness of gift received from relative and treated the same as unapproved cash credit u/s 68 of the Act. On appeal before the ld. CIT(A), the addition was upheld. Hence, further aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before us.

- Mr. Mehul Chandrakant Patel

3.

We have heard the ld. Authorized Representative (AR) of assessee and ld. Departmental Representative (DR) for Revenue and perused the material available on record. The ld. AR of the assessee argued that assessee received gift from his relative. The donor of the gift Mrs. Kalpana Patel is real sister of father of assessee. During the assessment, the assessee was asked to file the details of gift received, creditworthiness of the donor and genuineness of the gift. The assessee filed the required details. However, the assessee could not file Foreign Remittance Certificate. During the first appellate proceeding, the assessee filed the additional document. On furnishing the additional evidence, the ld. CIT(A) referred the document to the AO for his remand report. In the remand report, the AO contended that assessee could not prove the creditworthiness of the donor. The Ld. AR of the assessee further submitted that the assessee has now before the Tribunal, have filed all details of donor including the confirmation of the donor, the Foreign Remittance Certificate. It was further argued that the Foreign Remittance Certificate was filed before ld. CIT(A) in the appeal filed by assessee against the levy of penalty. The ld. CIT(A) in Appeal No. IT-93/2012-13/63/2013- 14 vide order dated 29.11.2013 accepted the said document. The ld. CIT(A) after considering the contention of assessee concluded that the assessee has discharged her onus of fulfilling the three condition to prove the gift viz. identity or creditworthiness of the donor and genuineness of the claim. The ld. CIT(A) deleted the penalty levied by AO on disallowance of the gift, which is the subject matter of the present appeal. It was further argued that the Revenue has not filed any appeal against the order of ld. CIT(A) dated 29.11.2013. On the other hand, ld. DR for the Revenue supported the order of authorities below. The ld. DR for the Revenue further submitted that the assessee has filed the additional evidence which required verification by AO or by ld. CIT(A) and without giving opportunity to the AO, the additional document filed by assessee may not be considered at this stage.

4.

We have considered the rival contention of the parties and gone through the order of authorities below. We have also gone through the order of ld. CIT(A) dated Mr. Mehul Chandrakant Patel

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