2017 (6) TMI 342 - AT - Income Tax

Tax Tribunal Upholds Income Tax on Gifts as Undisclosed Income

The Tribunal upheld the Commissioner of Income Tax (Appeals) order, taxing gifts received by the assessee as income from undisclosed sources for ... Addition made in the hands of assessee, his brother and mother on account of the alleged foreign gifts received - plea of the assessee was that the set off of the said addition may be given against the income from undisclosed source assessed in the hands of the Shri G.R.Madhyan, who is the father of the assessee - Held that:- There is a finding on record in the case of Shri G R Madhyan, no issue was raised against the order of Commissioner of Income Tax (Appeals) in the case of Shri G.R.Madhyan, giving a finding that the alleged gifts in question should be assessed in the hands of the recipients as income from undisclosed sources. The issue that the impugned gifts are assessable in the hands of the assessee has thus become final. This is the finding of the Commissioner of Income Tax (Appeals) given vide para 3.12 at page 11 of the appellate order which has been reproduced by us in the paras here in above. In view thereof, we find no merit in the plea of the assessee that the addition made in the hands of the assessee be set off against the income assessed in the hands of the Shri G.R.Madhyan. We reject the same and uphold the addition in the hands of assessee. The grounds of appeal raised by assessee are thus dismissed. Issues involved:Appeals against Commissioner of Income Tax (Appeals) orders relating to assessment year 1995-96 under sections 143(3) and 254 of Income Tax Act 1961.Detailed Analysis:1. The appeals were filed against separate orders of Commissioner of Income Tax (Appeals) relating to assessment year 1995-96. The main issue raised in the appeal was the addition made on account of non-acceptance of a gift received by the assessee.2. The search conducted under section 132(1) revealed incriminating documents related to money lending and undisclosed wealth of the father of the assessee. Subsequently, protective additions were made in the hands of the assessee and his brother for gifts received. The Commissioner of Income Tax (Appeals) held that the gifts were to be taxed in the hands of the recipients as income from undisclosed sources, leading to the addition in the assessee's case.3. The Tribunal initially set aside the Commissioner's order but later remanded the matter back for fresh consideration. The Commissioner found that the genuineness of the gifts was not established by the assessee, leading to the addition. The alternate plea that the gifts should be assessed in the hands of the father was dismissed as it had become final.4. The assessee appealed against the Commissioner's order, seeking a set-off of the addition against the income assessed in the father's hands. However, the Tribunal rejected this plea, upholding the addition in the assessee's hands based on the finality of the earlier decision regarding the assessment of gifts.5. The Tribunal concluded that the addition in the hands of the assessee was valid, dismissing the appeal. The issues in other appeals by different assesses were deemed identical, and the decision in the main appeal applied to them as well, resulting in the dismissal of all appeals.This comprehensive analysis covers the key legal aspects and arguments presented in the judgment, providing a detailed understanding of the case and its outcome.