Addition of Rs. 6.75 Lakh Gifts from Sister and Father-in-Law by AO: ITAT Deletes Addition, Accepts Proof of Receipt [Read Order]
The assessee had received Rs. 3.75 lakh from his sister from the sale of agricultural land, collected as her power of attorney, and Rs. 3 lakh from his father-in-law via NEFT, stated to be from agricultural income
Gifts
Gifts
The Chandigarh Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 6.75 lakh gifts from the sister and father-in-law made by the Assessing Officer (AO ), accepting the proof of receipt presented by the assessee.
Avtar Singh Gill, appellant-assessee, appealed against the Commissioner of Income Tax(Appeals)[CIT(A)]’s order dated 21-03-2025 for AY 2014-15, challenging the addition of gifts of Rs. 6.75 lakhs by the AO.
The assessee had received Rs. 3.75 lakhs from his sister and Rs. 3 lakhs from his father-in-law as gifts. The sister’s gift came from the sale of agricultural land, with the assessee receiving the amount as her power of attorney, supported by a copy of the sale deed. The father-in-law’s gift of Rs. 3 lakhs was transferred via NEFT and claimed to be from agricultural income.
The AO, however, rejected these explanations and treated the entire Rs. 6.75 lakhs as the assessee’s taxable income.
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The CIT(A) dismissed the assessee’s explanations, observing that the sister’s gift deed was unregistered and the power of attorney was not provided. It was also noted that the father-in-law made a cash deposit in his account just before transferring the gift via NEFT. As a result, the additions were upheld, and the assessee appealed before the tribunal.
The two member bench comprising Laliet Kumar (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) observed that the assessee had adequately established the receipt of gifts before the lower authorities.
The sister’s gift was supported by a deed, which did not require registration as it concerned a movable asset, while the father-in-law’s gift was made through the banking channel and sourced from agricultural income. The lower authorities had not made any independent inquiry with the donors.
With no evidence to the contrary, the assessee’s explanation was accepted, and the addition of Rs. 6.75 lakhs was deleted. No other grounds were pressed, and the appeal was partly allowed.
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