Abdus Sattar Vs ITO (ITAT Kolkata)
The Income Tax Appellate Tribunal (ITAT), Kolkata Bench, allowed the appeal of Abdus Sattar for the Assessment Year 2012-13, directing the deletion of an addition of Rs.8,50,000/- originally made by the AO and partly sustained by the Ld. CIT(A). The issue centered on whether a cash gift received by the assessee from his elder brother, Sk. Moslem, represented unexplained investment from undisclosed sources. The AO initially made a large addition based on a perceived gap between the total consideration of a jointly purchased property (Rs.2,30,00,000/-) and the available funds, resulting in an addition of Rs.47,44,334/-. Following the assessee’s appeal and a remand report, the Ld. CIT(A) significantly reduced the addition but sustained Rs.8,50,000/- on the sole ground that the donor, Sk. Moslem, lacked sufficient sources, noting his income for the year was only Rs.1,89,254/-. The Ld. CIT(A)$’s conclusion was drawn without taking into account the donor’s overall financial position.
Before the ITAT, the assessee argued that the Ld. CIT(A)’s finding was incorrect as it focused only on the donor’s current year’s income without considering his entire financial status. The assessee submitted the donor’s balance sheet for the relevant period, which clearly showed the gift of Rs.8,50,000/- to Abdus Sattar and corresponding funding sources, which included an amount of Rs.9,50,000/- claimed as a deduction under Section 50C (likely related to a prior property sale). The Tribunal scrutinized the evidence and determined that the donor had duly disclosed the amount and that the gift was vouched for with a corresponding cash balance on the asset side of the donor’s balance sheet. The ITAT concluded that the Ld. CIT(A)’s finding that the donor lacked sufficient sources was fallacious because a conclusion cannot be drawn merely by examining the current year’s income. Since the genuineness of the transaction and the identity of the donor were not disputed, and the capacity was substantiated by the balance sheet, the ITAT modified the CIT(A)’s order and directed the deletion of the sustained addition, allowing the appeal.
