Case Law Details
ACIT Vs Sunil Hingorani (ITAT Mumbai)
ITAT Mumbai held that loan lying in the proprietorship concern books of the assessee is converted as gift during the year under consideration hence there was no fresh receipt of money. Accordingly, addition under section 68 of the Income Tax Act is unsustainable.
Facts-
AO noted that assessee had credited an amount of Rs.1,67,10,442/- on account of gifts received from Shri Anil Hingorani. During the course of assessment proceedings, the assessee was asked to explain and furnish the occasion for which the gift was received creditworthiness of the donor, bank statement of the donor etc. In response to the query raised by AO, the assessee submitted that the gifts were received out of natural love and affection from his brother. It was explained that assessee had actually taken loans in earlier years from his brother which was converted as gift during the year under consideration.
AO however, proceeded to add the same as unexplained cash credit u/s.68 of the Act. CIT(A) remanded the matter for fresh verification.
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