Sachi Desai Vs ACIT (ITAT Surat)
The Income Tax Appellate Tribunal (ITAT) Surat has remanded the case of Sachi Desai vs. ACIT back to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh consideration regarding the taxability of a gift received from a Hindu Undivided Family (HUF). The appeal arose from an order passed by the National Faceless Appeal Centre (NFAC), which had upheld the Assessing Officer’s (AO) classification of the gift as “income from other sources” under Section 56(2)(vii) of the Income Tax Act, 1961. The tribunal found that the CIT(A) had decided the matter ex parte, without considering later judicial rulings favoring the assessee.
During the proceedings, the assessee’s counsel argued that the AO incorrectly relied on the ITAT Ahmedabad decision in Gyanchand M. Bardiya vs. ITO (2018) while ignoring subsequent decisions supporting the taxpayer’s claim. Notably, the Chandigarh Tribunal in Pankil Garg vs. PCIT (2019) and Rajkot Tribunal in Vineet Kumar Raghavjibhai Bhalodia vs. ITO (2011) had ruled that gifts from an HUF to its member should not be taxed under Section 56(2)(vii), as they fall within the scope of Section 10(2), which exempts such receipts. However, due to procedural lapses and the assessee’s unfamiliarity with electronic filing, these precedents were not presented before CIT(A).
