Deb Prasanna Choudhury Vs ADIT/DCIT (ITAT Kolkata)
No Requirement of a Gift Deed for Gifts Received from Relatives to Claim Exemption Under Section 56 of the Income Tax Act
The Income Tax Appellate Tribunal (ITAT) Kolkata Bench delivered its order on 4 November 2025 in an appeal filed by an individual taxpayer against the order of the Commissioner of Income Tax (Appeals)-22, Kolkata, dated 13 May 2024, for the Assessment Year 2012–13. The appeal challenged the addition of ₹80 lakh as taxable income under Section 56(2)(vii) of the Income Tax Act, 1961, arising from a gift received from the assessee’s brother-in-law.
The Tribunal first considered the issue of delay of 105 days in filing the appeal. The assessee explained that he was an NRI based in the UAE and was prevented from filing the appeal in time due to medical conditions. Finding the explanation reasonable, the ITAT condoned the delay and admitted the appeal for adjudication.
The assessee had originally filed his return of income declaring ₹20,28,740/-. Subsequently, proceedings were initiated under Section 147, and the Assessing Officer (AO) completed the reassessment under Section 143(3) read with Section 147, assessing the total income at ₹1,50,28,740/- and raising a demand of ₹69,82,460/-. The addition primarily related to ₹80 lakh received as a gift through an NRE account from the spouse of the assessee’s sister (brother-in-law). The AO treated this amount as “income from other sources,” observing that the gift deed was not properly executed and that the genuineness and source of the funds were unverified.
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