No New Evidence furnished to Establish Genuineness of Gift Received: ITAT upholds Addition made u/s 68 [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal has held that no new evidence was furnished to establish the genuineness of the gift received and upheld the addition made u/s 68

The assessee, Mr. Sanjeev Gajendra Pancholi is an individual and an architect by profession and also partners in the partnership firm named M/s. Royal Enterprise. The assessee filed its return of income declaring a total income of Rs.2,20,390/- along with an agriculture income of Rs.35,690/-. During the course of the scrutiny assessment, the AO made an addition of Rs.17,27,000/- under section 68 of the Act and Rs.11,830/- on account of excess rent received resulting total income of Rs.19,59,220/-. The AO also initiated penalty proceedings under section 271(1)(c) of the Act for the above disallowance.

The CIT (A) dismissed the appeal filed by the assessee and then the assessee preferred to appeal before Tribunal. The assessee submitted before the Tribunal that the impugned amount is the gift received from his uncle, Narendra Maganbhai Pancholi, out of the sale of agricultural land and also produced a copy of the gift deed.

The Coram of Smt. Annapurna Gupta, Accountant Member, and Mr. T. R. Senthil Kumar, Judicial Member have observed that when lower authorities requested to produce the donor as well as witnesses, the assessee failed to do so. The gift deed was executed in non-judicial stamp paper and there is a clear-cut time gap of more than a thousand days between the date of sale and the date of alleged donation made to the assessee. The same has not been explained by the assessee before the lower authorities.

The Tribunal further observed that it is seen from the gift deed that the donor stated to have deposited the sale proceeds in private banks, but no bank passbook or income from agriculture activity has been produced before the lower authorities.

The Tribunal has held that it is not possible to adjudicate the issue based on unexplained documents and no new documents furnished to establish the genuineness of the gift received from Shri Narendra Maganbhai Pancholi. Hence, ground raised by the assessee for deletion of impugned addition of Rs.17,27,000/- is rejected.

Ms. Urvashi Shodhan and Mr. R.R. Makwana have appeared for assessee and revenue respectively.

To Read the full text of the Order CLICK HERE

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