ITO Vs Varun Manchanda (ITAT Delhi)
ITAT Delhi – Cash Gifts Taxable Without Donor Details; Agricultural Land Advance Held Non-Taxable & Credit Card Payments Explained
In ITO vs Varun Manchanda (AY 2021-22), the ITAT Delhi partly allowed the Revenue’s appeal and decided three key issues relating to Sec 56(2)(x), Sec 69C and agricultural land exemption.
The Tribunal held that cash gifts of ₹10.43 lakh claimed to be received from relatives on the occasion of a marriage anniversary were rightly taxable because the assessee failed to provide basic details such as names, relationship and breakup of gifts. Mere claim of customary gifts was insufficient to establish exemption u/s 56(2)(x).
However, the addition of ₹29.54 lakh towards credit card payments was deleted as the assessee proved that payments were made by a company where he was director and treated as reimbursable imprest expenses, thus the source stood explained.
Further, advance received for sale of agricultural land amounting to ₹1.51 crore was held non-taxable since the land was situated beyond notified limits and did not qualify as a capital asset u/s 2(14)(iii)(b); hence the transaction remained outside the scope of capital gains. Consequently, Revenue’s appeal was partly allowed only on the gift addition.
FULL TEXT OF THE ORDER OF ITAT DELHI
