Paintings Gifted by Well-Known Artists: Delhi HC Confirms Through Diwali Cards and Signed Letters, Deletes ₹34.67 Lakh Addition [Read Order]
The Delhi High Court held that paintings received by Rohit Gandhi from renowned artists were genuine gifts, not undisclosed investments, and deleted the Rs. 34.67 lakh tax addition
![Paintings Gifted by Well-Known Artists: Delhi HC Confirms Through Diwali Cards and Signed Letters, Deletes ₹34.67 Lakh Addition [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/Delhi-High-Court-Gifted-paintings-Paintings-Gifted-by-Well-Known-Artists-taxscan.jpg "Paintings Gifted by Well-Known Artists: Delhi HC Confirms Through Diwali Cards and Signed Letters, Deletes ₹34.67 Lakh Addition [Read Order]")
In a recent decision, the Delhi High Court deleted a tax addition of Rs. 34,67,900, ruling that paintings in his possession were genuine gifts from renowned Indian artists, relying on Diwali cards and signed confirmation letters from the artists. Rohit Gandhi, a director of Cue Apparel Pvt. Ltd. and a partner in an art-related firm, had been subjected to a search operation under Section...
In a recent decision, the Delhi High Court deleted a tax addition of Rs. 34,67,900, ruling that paintings in his possession were genuine gifts from renowned Indian artists, relying on Diwali cards and signed confirmation letters from the artists.
Rohit Gandhi, a director of Cue Apparel Pvt. Ltd. and a partner in an art-related firm, had been subjected to a search operation under Section 132 of the Income Tax Act. During the search, several valuable paintings were found at his residence, including works attributed to artists like Manjit Bawa, F.N. Souza, Bhupen Kakkar, Jogen Chowdhary, and Arpana Caur. The Assessing Officer treated the artworks as unaccounted investments and added Rs. 1 crore to Gandhi’s income without obtaining any valuation from a certified expert.
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The assessee submitted that these paintings were not purchased but gifted to him by the artists themselves, and in one case, by the artist’s daughter following the artist’s demise. In support, Gandhi submitted letters and certificates from the respective artists.
One of the artworks had an inscription “To Rohit/Rahul” signed by the late Manjit Bawa, and another was a Diwali card sent by Jogen Chowdhary. Despite this, the CIT(A) and ITAT sustained a reduced addition of Rs. 58 lakh, citing doubts over the genuineness of the gifts.
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On appeal, the Income Tax Department argued that the assessee failed to conclusively prove the genuineness of the gifts and that the paintings were likely part of business inventory due to Gandhi’s professional involvement in the art world.
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A division bench comprising Justice Vibhu Bakhru and Justice Tejas Karia observed that the authorities failed to produce any material evidence to support these suspicions. The court held that the assessee had successfully discharged the burden of proving the identity and creditworthiness of the donors, as well as the genuineness of the transactions.
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The court explained that tax additions must be based on tangible evidence and cannot rest on conjecture or speculation. The court observed that the personal relationship between the assessee and the artists, the specific dedications on the artworks, the card messages, and the consistent confirmations from the donors sufficiently established the genuineness of the gifts.
The court set aside the findings of the AO, CIT(A), and ITAT and deleted the entire addition of Rs. 34,67,900. The appeal was allowed.
To Read the full text of the Order CLICK HERE
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