2022 (11) TMI 238 - AT - Income Tax

Tribunal dismisses Revenue's appeal citing COVID-19 extension, upholds deletion of disputed gift amount

The ITO, Ward-3 (1) (5), Ahmedabad Versus Dr. Satish Natwarlal Shah C/o. Baroda Nursing Home Anandpura

The Tribunal dismissed the Revenue's appeal due to a 56-day delay in filing, citing a Supreme Court judgment on extended time limits amid the COVID-19 ... Addition on account of explained cash credits u/s.68 - accepting a gift from a relative - Whether relationship as explained u/s. 56(2)(v) of the Act fits into the facts of the case? - A.O. held that the assessee failed to provide source of investment into shares by his NRI brother, which eventually the assessee is getting in the form of gift - onus is not established and assessee’s gift to the nieces has no logic - HELD THAT:- Assessee received the gift from his own brother who is a Non-Resident from the year 1966. The allotment of shares were made under NRI quota to the assessee’s brother in USA. Thus the source and genuineness is being proved beyond doubt, the assessee having received the above gifts from his brother, who is as per the Explanation 2 to Section 56(2)(v) of the Act, there need not be any “occasion” for receipt of gift by the assessee. In our considered opinion, the whole approach of the A.O. is wholly perverse which cannot be sustained in law and therefore the deletion by the Ld. CIT(A) does not require any interference. Thus the Grounds raised by the Revenue are without merits and the same are liable to be rejected. Issues:1. Delay in filing appeal by the Revenue.2. Disallowance of gift amount by the Assessing Officer.3. Appeal against the reassessment order by the assessee.4. Admission of additional evidence by the Ld. CIT(A).5. Grounds of appeal raised by the Revenue.6. Justification of gifting a large sum without a specific occasion.7. Application of legal precedents in gift transactions.The judgment addresses the issue of a 56-day delay in the Revenue's appeal filing, citing the COVID-19 pandemic and a Supreme Court judgment extending time limits. The case involves the disallowance of a gift amount received by the assessee, leading to reassessment. The assessee appealed, submitting additional evidence, which the Ld. CIT(A) admitted, leading to a dispute over the source of investment in shares. The Revenue raised grounds challenging the deletion of the addition based on the donor's income returns and the admission of fresh evidence. The judgment discusses the necessity of proving the occasion for gifting a substantial amount without a specific event, citing legal precedents supporting the acceptance of gifts between family members without a specific occasion. The Tribunal upheld the Ld. CIT(A)'s decision to delete the addition, emphasizing the genuineness of the gift from the Non-Resident brother and rejecting the Revenue's grounds as lacking merit. The appeal by the Revenue was dismissed, affirming the deletion of the disputed amount.This detailed analysis covers the delay in appeal filing, the assessment of gift amounts, the admission of additional evidence, the grounds of appeal raised by the Revenue, the justification for gifting without a specific occasion, and the application of legal precedents in gift transactions, providing a comprehensive overview of the judgment's key issues and outcomes.