While delivering an assessee-friendly ruling, the Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that there is no occasion required for “gift” under the Income Tax Act, 1961.
The Assessing Officer doubted the genuineness of the gift during the appellate proceedings, however he is satisfied with the evidences produced by the assessee by way of additional documents and satisfied with the genuineness of the gift by assessee’s brother who is an NRI. The only remaining doubt of the Assessing Officer was that there is no justification in gifting such a huge sum without there being any big occasion in the assessee’s family namely wedding, etc. It was held by the Coordinate Bench of the Tribunal in the case of Dr. Vempala Bala Manohar that lack of occasion cannot be a ground to doubt the gift transaction between family members.
On first appeal, the CIT(A) held that the A.O. accepted the purchase of shares by assessee’s brother under NRI quota, the source of fund were paid through assessee’s brother NRE bank account.
A two-Member bench of the Tribunal comprising of Ms. Annapurna Gupta, Accountant Member and Shri T.R. Senthil Kumar, Judicial Member observed that “Respectfully following the above judgments, the assessee received the gift from his own brother who is a Non-Resident from the year 1966. The allotment of shares were made under NRI quota to the assessee’s brother in USA. Thus the source and genuineness is being proved beyond doubt, the assessee having received the above gifts from his brother, who is as per the Explanation 2 to Section 56(2)(v) of the Act, there need not be any “occasion” for receipt of gift by the assessee.”
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