VALLIAPPAN LAKSHMANAN,CHENNAI vs. ITO, NCW 19(6), CHENNAI

सुनवाई क� तार�ख/Date of Hearing : 31.07.2024 घोषणा क� तार�ख /Date of Pronouncement : 23.08.2024 आदेश / O R D E R MANU KUMAR GIRI (Judicial Member) This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), (NFAC), DELHI [‘CIT(A)’ in short] in order No.ITBA/NFAC/S/250/2023-24/1060966419 (1) dated 15.02.2024 for Assessment Year 2017-18.

2. The CIT(A) erred in confirming the order of the Assessing Officer in making an addition of Rs. 15,00,000/- under Section 69 of the Act.

6. The CIT(A) ought to have appreciated that the Appellant has already furnished substantial evidence to prove that his donor and father Mr Ar.Lakshmanan had sufficient source to grant such gift.

7. The Appellant craves leave to adduce additional grounds and/or amend, rescind grounds of appeal at the time of hearing’’.

3. Brief facts of the case are that the assessee had filed his return of income for A.Y. 2017-18 on 27.10.2017 declaring a total income of Rs. 9,99,240/-. The case of the appellant was selected for scrutiny under CASS with a reason to verify the cash deposited in his bank account during the year. The AO during the course of the assessment proceedings show caused the appellant that on perusal of the details filed by the appellant seen that the bank account pertaining to Corporation Bank Velachery was omitted to be taken into account in arriving at your total income. Assessee was asked why the amount of Rs.46,47,361/- should not treated as your income and assessed to tax. The appellant did not file any reply in response to the show cause notice hence the AO completed the assessment proceedings by making an addition of Rs.46,47,361/- to the returned income of the appellant. During the course of the appellate proceedings the appellant submitted additional evidence which was not submitted before the AO hence the same was forwarded to the AO for his comments. The AO has not submitted anything regarding the admissibility of . the same under Rule 46A so in view of the principles of natural justice the additional evidence submitted by the appellant is admitted by the ld. CIT(A). The AO has submitted his report on the additional evidence submitted by the appellant vide his letter no. ITBA/NFAC/F/24/2023-24/1060048731(1) dated 24.1.2024. In remand, the ld. Assessing Officer has accepted the explanation of the assessee on the issue at Sl.No.1, 3 & 4 but rejected the explanation of the assessee on the issue at Sl.No.2 as mentioned below:- Sl.No Particulars Amount in (Rs.) 1 Cash deposited on various dates as per bank Rs. 19,42,361/- statement out of the amount drawn from assessee's proprietory business named M/s. Sabha Indane Gas Agency and contribution received from his wife for the purchase of flat at Karaikudi in the joint name of L Valliappan and V Parva thi. 2 Cash received from his father Mr. A.R. Lakshmanan Rs. 15,00,000/- (PAN ACQPL1895A) for the purchase of flat at karaikudi in the joint name of L Valliappan and V Parvathi 3 Loan from Indusind Bank Rs. 9,95,000/- 4 Amount received from M/s. VP Promoters for the Rs. 2,10,000/- excess amount paid. Total Rs. 46,47,361/- The ld. CIT(A) after the perusal of the remand report submitted by the ld. Assessing Officer observed that the AO has agreed with the contentions of the appellant except the claim of the appellant, having received Rs. 15,00,000/- in cash as gift from his late father. The ld. CIT(A) further observed that the appellant has not been able to substantiate his claim with evidence before the AO. Hence, the ld. CIT(A) after perusing the findings of the ld. Assessing Officer sustained the addition of . Rs.15,00,000/- and deleted the other additions. Aggrieved, the assessee is in appeal before us.

4. The ld.Counsel Mr. S.P.Chidambram, Advocate for the appellant has referred section 18(d) of the Registration Act, 1908 and section 123 of the Transfer of Property Act, 1882 (pages 6-7 & 13 of the additional paper book) and contended that in the case of gift of moveable property, compulsory registration is not required. The ld.Counsel submitted that when gift deed is genuine, hence partial addition by the ld.CIT(A) is not justified.

5. Per contra, ld.JCIT-DR vehemently supported the impugned order of the ld.CIT(A) and prayed for dismissal of appeal.

. ‘’For the purpose of making a gift of immoveable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses.

For the purpose of making a gift of moveable property, the transfer maybe effected either by a registered instrument signed as aforesaid or by delivery. Such delivery may be made in the same way as goods sold may be delivery’’.

. The property hereby gifted is the donor's self-acquired property accumulated out of income earned and has full right and authority to dispose of the same in any manner he may think fit. In witness whereof, the parties hereto have put their respective signatures on this Deed of gift in presence of witnesses. AR. Lakshmanan Donar L.Valliappan Donee

Order pronounced in the open court on 23rd day of August, 2024 at Chennai.