TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Assessee's Failure to Substantiate Gift Results in Reinstatement of Penalty</h1> <h3>COMMISSIONER OF INCOME TAX, DEHRADUN AND ANOTHER Versus VISHAN NARAIYAN KHANNA</h3> COMMISSIONER OF INCOME TAX, DEHRADUN AND ANOTHER Versus VISHAN NARAIYAN KHANNA - TMI Issues:1. Validity of gift received by the assessee2. Penalty under Section 271(1)(c) of the Income Tax Act, 1961Issue 1: Validity of gift received by the assesseeThe respondent assessee disclosed receiving a gift of Rs. 3,51,000 from Shiv Prasad Jagat Ram Kala, evidenced by a Deed of Gift and an affidavit. However, the Assessing Officer found discrepancies as Shiv Prasad Jagat Ram Kala's family, located in a village, denied his financial capability to make such a gift. The Assessing Officer added the amount to the assessee's income due to lack of substantiation. The Tribunal later deleted the penalty citing no bona fide failure on the assessee's part. The court analyzed that if the two instances of Shiv Prasad Jagat Ram Kala are the same person, the assessee failed to substantiate the gift's explanation, leading to deemed concealment of income. The court set aside the Tribunal's decision and reinstated the Assessing Officer's order.Issue 2: Penalty under Section 271(1)(c) of the Income Tax Act, 1961The penalty under Section 271(1)(c) was levied on the assessee for alleged concealment of income or furnishing inaccurate particulars. The Commissioner of Appeals initially deleted the penalty, which was upheld by the Tribunal. The court referred to Explanation 1(B) of the Act, stating that if an explanation is offered but not substantiated, and relevant facts are not disclosed, it leads to deemed concealment of income. Since the assessee failed to prove the authenticity of the gift giver, the court concluded that there was no bona fide on the assessee's part. Consequently, the court restored the Assessing Officer's order and disposed of the appeal.This judgment highlights the importance of substantiating explanations and disclosing all material facts in income tax matters to avoid penalties and deemed concealment of income. It emphasizes the need for genuine documentation and verification to support claims of gifts or transactions to maintain transparency and compliance with tax laws.
TaxTMI 