BHAVNA M. SACHDEV,MUMBAI vs. ITO 14(2)(3), MUMBAI

The present appeal is filed by assessee against the order of CIT(A) dated 21 September 2012, in respect of AYs 2009-10. The assessee has raised only one ground of appeal against the addition of Rs. 5 lakh as undisclosed income/bogus gift received from her daughter Smt. Heena M Sachdev, resident of Dubai.

The brief facts of the case are that assessee filed return of income on 30 July 2009, declaring total income of Rs. 3,58,600/-. The return of income was selected for scrutiny. During the course of assessment it was observed by AO that assessee received an amount of Rs. 5,00,000/-as gift. The assessee was asked to prove the genuineness of the said gift and to prove the identity of Donner, financial capacity and genuineness of transaction. The assessee replied that her daughter who is residing in Dubai and her husband is doing business in the name of M/s Dia

Aggrieved by the order of AO assessee filed appeal before CIT(A). After hearing the contention of assessee CIT(A) dismissed the appeal of assessee in the impugned order holding that neither financial capacity nor genuineness of gift could be established from the evidence relied upon by the assessee. CIT(A) further concluded that one cannot ignore that the gift is claimed to be received from the daughter or son-in-law, if it is believed for the sake of argument that bank account in the name of M/s Dia International was owned by Mr Jeetu R Balani is not proved . It is strange that under Hindu customs and usage gift is given by daughter or son-in-law to mother-in-law. Against the order of CIT(A) the present appeal is filed before us.

We have heard Ld.AR for assessee and DR for revenue and perused the material available on record. Ld AR of the assessee argued that assessee has proved on record the identity of person, genuineness of transaction, and creditworthiness of the Donner. In fact the amount was gifted by the daughter of assessee. There was no dispute that the amount was received through banking channel. The Donner has given confirmation letter which was filed before the revenue authorities. The assessee filed the statement of account of M/s Dia International from Commercial Bank of Dubai (A/c No. 1001059904 for the period 1 March 2009 to 31 Mach 2009). To prove the relationship with the Donner the assessee filed marriage certificate her daughter with Mr Jeetu R Balani. DR for revenue supported the order of authorities below and argued that transactions were not genuine and the addition was made when no proper and satisfactory explanation was given before the authorities below.

We have considered the rival contention of the parties and perused the material available on record. We have seen that the amount was credited in the bank of assessee through banking channel. The assessee successfully proved her relationship with the Donner. Otherwise there is no dispute about the relationship of assessee with the Donner. The Donner herself confirmed the gift vide confirmation letter dated 15th March 2009. We has seen in the paper book the copy of marriage certificate of assessee’s daughter, identity card , the record of Dia International, a Company incorporated in United Arab Emirates. The bank account of M/s Dia International was having sufficient funds. Thus the identity of person and creditworthiness of the party was duly proved. Identity of the person was not disputed by the revenue authority. The assessee has received the amount of Rs. 5 lakh as a gift from her daughter which was gifted by her due to love and affection to her mother. The gift is always made due to love and affection and no other consideration is required under law.

Section 122 and 123 of Transfer of Property Act, deals with the concept of gift which are referred below:

Transfer how effected For the purpose of making a gift of immovable 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 movable property, the transfer may be 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 delivered. We have noticed that CIT (A) while considering the fact of the present case concluded that under the Hindu custom and usages the gift by daughter or son-in- law is strange. There is no bar under the Hindu law or under T.P. Act to make gift by daughter to mother. We do not agree with the orthodox concept of Ld CIT (A). The assessee successfully proved the identity of person, genuineness of transaction and creditworthy of the Donner. In the above discussion we do not find any merit in the order of CIT(A) and the same is quashed.

In the above circumstances the addition made by AO and sustained by CIT(A) is deleted.

In the result, appeal filed by the assessee is allowed.