ITAT confirms Addition Since Gift received from NRI Relative through Debtor couldn’t be Proved [Read Order]

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) has confirmed an addition in respect of unexplained cash credits since the assessee failed to prove the genuineness of the gift received from NRI Relative through the debtor of the latter. The bench held that the assessee has failed to satisfy the requirement as per the provisions of Section 68 of the Income Tax Act.

In the instant case, the assessee received Rs. 8,00,000/- from one Shri Raj Kumar of Hyderabad on account of some amount due to Smt. Poonam Kanjani, who is an NRI. During the assessment proceedings, the Assessing Officer asked the assessee to prove the source of the amount. Since the assessee failed to prove the genuineness of the transaction, the Officer treated the same as an unexplained cash credit.

Before the Tribunal, the assessee contended that he has discharged his obligation to prove the genuineness of the gift through banking channel by producing the bank certificate regarding the transfer of money from the account of Shri Raj Kumar of Hyderabad to the account of the assessee.

The Tribunal noted that apart from the mere contentions and submissions, assessee has not furnished a single evidence or document to show how this amount has come from Smt. Poonam Kanjani.

“In the absence of any documentary evidence of movement of the amount of Smt. Poonam Kanjani, the assessee has failed to establish the claim of gift from Smt. Poonam Kanjani. The assessee has thus not substantiated his claim of gift received from Smt. Poonam Kanjani and has produced the evidence only to the extent that the said amount was transferred from the bank account of one Shri Raj Kumar to the bank account of the assessee. To that extent, the fact can be accepted, however, when the assessee has not claimed any loan or gift from Shri Raj Kumar, then the claim of gift from Smt. Poonam Kanjani in the absence of any evidence has not been proved. Thus when the assessee has introduced the cash of Rs. 8,00,000/- and failed to establish and explain the same being a gift received from Smt. Poonam Kanjani, then the assessee has not discharged his onus of proving the genuineness of the transaction of gift,” the Tribunal said.