Case Law Details
Y. C. Kallinatha Vs ACIT (ITAT Bangalore)
The assessee had received a gift of Rs.22.50 lakh from Shri T.C.Shivakumar, who is brother-in- law of the assessee. The assessee had considered the transaction not coming within the purview of section 56(2)(vi) of the I.T.Act since gift was received from a relative covered under the definition of “relative”as given in Explanation to section 56(2)(vi) of the I.T.Act. During the course of assessment proceedings, confirmation was filed by the donor. The A.O. summoned the donor Shri T.C.Shivakumar and a sworn statement was recorded from him wherein he had categorically stated on oath that he has gifted money as claimed by the assessee through banking channel. The donor has also stated why he chose to gift the money. As regards the source of gift by Shri T.C.Shivakumar to the assessee, it was stated that he received a gift from his sister Smt.R.Rajeshwari for a sum of Rs.25,00,000 on 10.08.2010. Out of Rs.25 lakh received by Shri T.C.Shivakumar, a sum of Rs.22.50 lakh was gifted to the assessee on 12.08.2010. It was stated that all the transactions are through banking channel and furnished a copy of gift deed (gifting a sum of Rs.25 lakh to Shri T.C.Shivakumar, by his sister). The Assessing Officer held that the donor did not have the means to make the gift and concluded the gift is to be presumed to have been received by the assessee from the sister of Shri T.C.Shivakumar. According to us, this conclusion of the A.O. is based on irrelevant facts. On facts on record, it is clear that the assessee had received gift from his brother-in-law and not from Smt.R.Rajeshwari. Therefore, the provisions of section 56(2)(vi) of the I.T.Act will not have application on facts of the given case.
No Section 68 addition if Assessee proved the source of gift, the identity of the donor and produced the bank account copy
As regards whether the addition can be sustained u/s 68 of the I.T. Act, we are of the view that the assessee in this case has proved the source of gift, the identity of the donor and produced the bank account copy to prove that the amount was received through banking channel. The Assessing Officer had also summoned the donor, who deposed before him confirming the gift. Admittedly, the assessee’s brother-in-law received the gift of sum of Rs.25 lakh from his sister through banking channel vide gift deed dated 10.08.2010. A copy of the gift deed was also furnished to the A.O. The A.O. has not doubted the source available to sister of Shri T.C. Shivakumar and no inquiry was made in this regard. In other words, the A.O. having not doubted the gift made by the sister of Shri T.C. Shivakumar, which in turn was partly utilized by Shri T.C.Shivakumar for making gift to the assessee, cannot make an addition u/s 68 of the I.T.Act. Since the addition cannot be sustained both u/s 56(2)(vi) nor u/s 68 of the I.T. Act, the same needs to be deleted.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
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