Manikanta Prudhvi Prabhakar Jonnala Vs ITO (ITAT Hyderabad)
Hyderabad ITAT: Gift from Mother Cannot Be Treated as Unexplained Investment When Donor’s Identity, Capacity and Source Are Established
The Hyderabad ITAT condoned a delay of 30 days in filing the appeal after accepting the assessee’s explanation that he was residing in Canada, depended on his Chartered Accountant for handling tax matters, and filed the appeal promptly after becoming aware of the order through a recovery notice. On merits, the dispute concerned an addition of ₹5,71,944 under Section 69 of the Income-tax Act, treated by the Assessing Officer as unexplained investment in relation to the purchase of an immovable property. The assessee contended that the amount was a gift from his mother and produced a confirmation letter and her bank statements showing a credit of ₹8,42,000 on 08.01.2020, followed by a cash withdrawal of ₹8,00,000 on 10.01.2020, from which ₹5,71,944 was gifted to him. The Tribunal noted that the donor’s identity and relationship with the assessee were undisputed and that the bank statements demonstrated sufficient funds with the donor immediately before the gift. As the Revenue did not produce any material to controvert the evidence, the Tribunal held that the source of the amount stood satisfactorily explained and directed the Assessing Officer to delete the addition of ₹5,71,944. The appeal was allowed.
