CIT Vs Nirav Modi (Bombay High Court)
The Bombay High Court heard two appeals filed by the Revenue under Section 260-A of the Income Tax Act, 1961, challenging the common order dated 20 March 2013 passed by the Income Tax Appellate Tribunal (ITAT) for Assessment Years (AY) 2007-08 and 2008-09. The sole legal question raised was whether the Tribunal was correct in cancelling the CIT’s revision orders under Section 263 and whether reliance on the decision in CIT v/s Gabriel India Ltd., 203 ITR 108 was justified.
The factual matrix for both years concerned gifts received by the assessee from abroad. For AY 2007-08, the assessee received Rs. 7 Crores as a gift from his father, Deepak Modi, a Non-Resident Indian residing in Belgium. For AY 2008-09, the assessee received Rs. 20.50 Crores from his father and Rs. 116.60 Crores from his sister, Purvi Mehta, an NRI residing in Hong Kong.
In AY 2007-08, the assessee declared an income of Rs. 50.43 lakhs and claimed the gift from his father. The Assessing Officer (AO) sought details to verify the identity, source, and financial capacity of the donor, including name and address, gifts received over the last three years, and proof of creditworthiness. The assessee provided details including a gift confirmation letter, proof of his father’s ownership of Chang Jiang S.A., creditworthiness statements from UBS AG Singapore, passport copies, and bank account statements. The AO was satisfied with the genuineness of the gift, and the assessment order dated 31 December 2009 did not disturb the claim.
