No addition can be made on Immovable Property purchased out of Gifts received from Relatives: ITAT directs Re-adjudication [Read Order]
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The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that no addition could be made on immovable property purchased out of gifts received from relatives. Therefore, the bench directs re-adjudication. The assessee, Karamveer Singh’s case was reopened on the information AIR regarding the purchase of an immovable property amounting to Rs.38,65,000/- by the assessee during...
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that no addition could be made on immovable property purchased out of gifts received from relatives. Therefore, the bench directs re-adjudication.
The assessee, Karamveer Singh’s case was reopened on the information AIR regarding the purchase of an immovable property amounting to Rs.38,65,000/- by the assessee during the financial year 2008-09 relevant to Assessment Year 2009-10.
The Assessing Officer issued various notices under Section 142(1) of the Income Tax Act. However, there was no compliance by the assessee. Thus, the AO made an addition of sale consideration of immovable property of Rs.38,65,000.
Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeal) (CIT(A)) who partly allowed the appeal of the assessee thereby, he sustained the addition to the extent of Rs.16,31,750/-. Against the order, the assessee filed an appeal before the tribunal
Before the tribunal, Somil Aggarwal, the counsel for the assessee argued that did not receive any notice under Section 148 of the Income Tax Act. The money was received as a gift from the relatives. Hence without verifying the facts, AO made an addition.
Om Prakash, Department Representative opposed these submissions and supported the orders of the authorities below.
The tribunal after reviewing the facts observed that immovable property was purchased out of gifts received from relatives. The gifts are genuine and the assessee is open for verification of the same.
Hence, a single-member bench of tribunal comprising Kul Bharat (Judicial Member) set aside the assessment order and restored the assessment to the file of the AO to frame the assessment afresh after verifying the claim of the assessee.
To Read the full text of the Order CLICK HERE
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