DCIT Vs Lalita Devi Agarwal (ITAT Mumbai)
ITAT Mumbai held that addition u/s. 68 towards amount received as gift from son not justified since addition is made in a baseless manner, solely relying on unverified newspaper reports. Accordingly, appeal of revenue dismissed.
Facts- The present appeal has been filed by the revenue mainly contesting that CIT(A) has erred in allowing appeal of the assessee wherein assessee has claimed the entire amount of Rs.3crore as Gift received from her son.
Conclusion- Held that for the purpose of making the addition, AO primarily relied on information sourced from a Google search and local newspaper reports, without conducting any cross-verification or independent inquiry to substantiate the claims. The addition appears to have been made in a baseless manner, solely relying on unverified newspaper reports. Notably, the evidence provided by the assessee was not rebutted or discredited by AO. The genuineness of the gift has not been questioned, and the donor’s financial capacity to provide the gift was sufficiently demonstrated. The donor’s bank account showed adequate funds at the time of executing the gift, thereby establishing creditworthiness. AO appears to have undertaken verification through online searches and local media reports about the donor, but even these steps did not provide conclusive evidence to challenge the donor’s credibility. The actions of the assessee for investing the gifted amount in an Indian company and subsequently receiving and returning the funds to the donor are unrelated to the issue of addition under Section 68 of the Act. In result, appeal of the revenue dismissed.
