Case Law Details
Dr. Vempala Bala Manohar Vs ITO (ITAT Visakhapatnam)
The issue under consideration is whether the AO is correct in treating the gifts as unexplained credit?
In the present case, the assessee is a Physician deriving income from running hospital. The case of the assessee was selected for scrutiny after survey. During the scrutiny, AO noticed that the assessee has received gift from his brother. The assessee failed to explain that what is the occasion to give a gift and there is no gift agreement between the donor and donee and creditworthiness is not proved. Therefore, the Assessing Officer is of the opinion that the gift amount is not a genuine gift and treated the same as unexplained investment of the assessee. As the assessee failed to produce the evidence in support of the creditworthiness of the donor as well as availability of the funds to be transferred, the same is added to the total income of the assessee as unexplained income.
ITAT states that the assessee has received gift from his own brother-Shri V.Bala Sudhakar. The assessee has filed bank statement of the HDFC Bank and also the details of the deposits made by the donor- Shri V.Bala Sudhakar in Habid Qatar International Exchange Ltd. and City Exchange, Doha, Qatar. It is also the case of the assessee is that in Qatar, the assessee’s brother (donor) is working and getting salary and other allowances and his wife also working there and the gifts received through banking channels. The assessee also filed confirmation letter from the donor-Shri V.Bala Sudhakar. By considering the above facts, ITAT find that the assessee has discharged his burden casted upon him that the gift received by him is a genuine gift. If at all, the Assessing Officer has any doubt about the gift transaction, he ought to have made a detailed enquiry and to prove that the gift received by the assessee is not a genuine gift. In this case, no such exercise has been done by the Assessing Officer. We find that the Assessing Officer has failed to prove the gift received by the assessee is not a genuine gift and simply addition is made, the same is confirmed by the ld. CIT(A). In view of the above facts and circumstances of the case, we are of the opinion that the gift received by the assessee cannot be considered as not genuine gift. It is further observed that no occasion is required to receive the gift by the assessee from his brother. Therefore, the Assessing Officer is not correct in denying the gift received by the assessee is not a genuine gift.
FULL TEXT OF THE ITAT JUDGEMENT
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