Addition u/s 68 merely on the basis of doubts and suspicion not justified- ITAT Kolkata
|
Case Details: |
Smt. Tapasi Singh vs. ITO |
|
Appeal No.: |
ITA NO. 491/Kol/2020 |
|
Order pronounced by: |
ITAT Kolkata |
|
Date of Order: |
30-04-2021 |
|
Assessment Year: |
2004-05 |
|
In Favour of: |
Assessee |
Source: www.itat.gov.in
Brief Facts:
|
The assessee had introduced a fresh capital of Rs. 4 Lakhs and the source of the same was explained as a gift of RS. 1 Lakhs each from four individuals. The assessee submitted tax particular of donors along with the declarations of the donors confirming the gifts as well as the copies of relevant cheques. In order to verify the assessee’s claim, summons u/s 131 of the Act were issued by the AO to all the donors requiring their personal attendance. However, none of the donors appeared before the AO for their examination. |
|
Keeping in view this failure as well as the fact that none of the donors had blood relations with the assessee, the AO held that the identity and creditworthiness of the donors, as well as the genuineness of the transactions involving gift, was not established. Hence, the AO treated the gifts of Rs. 4 Lakhs as unexplained cash credit and an addition to that extent was made by him u/s 68 of the Act. The ground of appeal of the assessee was also not considered by the CIT(A). Therefore, the assessee preferred an appeal before the Tribunal. |
Observations & Ruling of the Tribunal:
- It is observed that all the 4 donors who had given the gifts in question to the assessee during the year under consideration were engaged in the business and in the returns of income filed regularly for the year under consideration, the business income earned by them was duly declared as is evident from the photocopies of their IT returns.
- The primary onus to establish the identity and creditworthiness of the concerned donors, as well as the genuineness of the relevant transactions involving gifts, thus was duly discharged by the assessee by producing the relevant documentary evidence and without bringing on record any material or evidence to disprove or dislodge the claim of the assessee.
- Moreover, all the gifts in question were given to the assessee by the 4 donors by account payee cheque, and their declarations confirming the gifts given to the assessee were also furnished on record giving all the relevant particulars including the PAN of the donors. The gifts were made through account payee cheques which itself is a third-party corroboration authenticating the genuineness of the transactions.
- Therefore, the Hon’ble Tribunal held that the authorities were not justified in treating the gifts received by the assessee as unexplained cash credit u/s 68 merely on the basis of doubts and suspicion and therefore deleted the addition of Rs. 4 Lakhs made by the A.O. and as confirmed by the Ld. CIT(A).
Read the Complete Order: Smt. Tapasi Singh vs. ITO
Disclaimer: The above article is based upon the ruling of the Hon’ble ITAT Kolkata and is meant for informative purposes only. Readers are requested to act diligently and under consultation with a professional before applying the information contained in this article.
