ITAT deletes addition made on account of Cash Gift received from Relatives [Read Order]

The Income Tax Appellate Tribunal (ITAT), Jaipur Bench deleted the addition made on account of cash gifts received from relatives.

The assessee, Sheela Yogi had also received a gift of Rs. 5.51 Lakhs from her father in law and another gift of Rs. 2.51 Lakhs from her father. The assessee used these advances and gifts to make the payment for the purchase of agriculture land.

The AO even issued summons and recorded statements under section 131 of the Income Tax Act. For the company i.e. PG Network Market Pvt. Ltd., the Ld. AO sought necessary confirmation and documents through Section 133(6) of the Income Tax Act.

All the persons accepted and confirmed that they have given the money to the assessee in their statements. Therefore, there is no doubt with respect to their identity and the genuineness of the transaction.

However, the AO did not even accept the gifts received from her father and father in law and treated the same as unexplained cash credits under section 68 of the Income Tax Act which was confirmed by the CIT(A).

The issue raised in the case was Lower authorities grossly erred in making and confirming adding of Rs.8,02,000 under section 68 of the Income Tax Act by adding the cash gift received by the appellant from relatives despite the fact that complete evidence of gift received was submitted during the assessment proceedings.

The coram consisting of Sandeep Gosain and Vikram Singh Yadav while directing the deletion of the addition made by the CIT(A) held that the assessee explained the source of such investment as amount received as an advance towards the sale of another agricultural land and receipt of gifts.

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