Sharad Maheshwari Vs ITO (ITAT Agra)
Brother’s Capital, Sisters’ Affection- ITAT Agra Deletes Addition on Gifts from Sisters — Relationship & Source Held Genuine -Section 68 Can’t Tax Natural Love & affection
Assessee, deriving income from partnership firms, had shown capital introduction of ₹1.83 crore during the year, sourced mainly from gifts aggregating ₹2.80 crore received from his sisters- Smt. Shashi Bansal & Smt. Manju Agarwal. AO disbelieved part of the gifts- ₹10.94 lakh from Smt. Shashi Bansal & ₹6.25 lakh from Smt. Manju Agarwal -holding that supporting evidence was insufficient, & treated the same as unexplained cash credit u/s 68. CIT(A) upheld the additions, observing that the sale deeds of Smt. Shashi Bansal did not show the claimed cash receipts & that she was not subjected to scrutiny u/s 143(3), thereby doubting her creditworthiness.
Before ITAT, Assessee produced confirmation letters, gift declarations, donors’ bank statements, & sale deeds showing cash receipts in the hands of Smt. Shashi Bansal, who had sold her property & paid capital gains tax. It was argued that both donors were real sisters of Assessee, & the gifts were genuine acts of affection, not income.
Tribunal held that the identity, genuineness, & creditworthiness of both donors were satisfactorily established. The sale deeds & tax records proved that Smt. Shashi Bansal possessed the cash given, & the fact that her assessment was not selected for scrutiny could not be used against Assessee. In case of Smt. Manju Agarwal, the gift was through banking channels, supported by bank statements & confirmation, & AO failed to make any enquiry to disprove it.
