The single member bench of the Income Tax Appellate Tribunal ( ITAT ), Hyderabad, directed the Assessing Officer (AO) to delete the addition of agricultural income, substantiating that the father’s gift to his son was supported by evidence.
The Assessing Officer scrutinized deposits totaling Rs. 20 lakhs made by the assessee during the demonetization period. Upon investigation, the officer requested the assessee to provide clarification regarding the source of these deposits. However, noting the absence of any information concerning the assessee’s business activities or the origin of the funds, the Assessing Officer decided to include the entire sum of Rs. 20 lakhs in the assessee’s taxable income
The assessee opted to appeal before the Commissioner of Income Tax (Appeals) [CIT (A)]. During the appeal process, the assessee argued that the deposit of Rs. 20 lakhs consisted of Rs. 15 lakhs deposited on November 24, 2016, at HDFC Bank, Patamata Branch, Hyderabad, and Rs. 5 lakhs deposited on August 7, 2017, at ICICI Bank, S.D. Road, Secunderabad. The assessee contended that the Rs. 5 lakhs deposited on August 7, 2017, should not be included in the assessment for the fiscal year 2017-18 and requested its removal from consideration.
The counsel for the assessee S. Sandhya have submitted that in response to the notice issued under section 133(6) of the Act, all pertinent records were provided to substantiate the donors’ identity and creditworthiness, along with evidence supporting the genuineness of the transaction, particularly due to the close relationship involved.
The bench noted that during the submissions made before the Commissioner of Income Tax (Appeals) [CIT (A)], the assessee explicitly stated that out of the total deposit of Rs. 20 lakhs, Rs. 5 lakhs was deposited on August 7, 2017, with ICICI Bank. It was emphasized that such a deposit cannot be deemed to have occurred during the previous year relevant for the assessment year 2017-18
Hence, the bench accepted the gift of Rs. 5 lakhs given by the father of the assessee and Assessing Officer was directed to delete the addition to the extent of such Rs. 5 lakhs also.
In respect of the balance Rs. 10 lakhs, said to have been donated by the grandfathers, both paternal and maternal, and given by their sons, and agree with the counsel for the assessee that the affidavits and other material require further verification at the end of the Assessing Officer
The tribunal comprising K. Narasimha Chary (Judicial member) concluded that the matter was returned to the Assessing Officer’s jurisdiction for thorough examination of the evidence presented by the assessee concerning the Rs. 5 lakhs gifted by each grandfather.
In the result, appeal of the assesse was treated as partly allowed for statistical purposes.
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