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of <h1>Unexplained cash credit under section 68: gifts accepted after donors' books and means corroborated, addition deleted.</h1> Decision concerns unexplained cash credits treated as gifts from identified donors; tribunal noted donors had sufficient means and maintained accounting ... Unexplained cash credit u/s 68 - cash gifts received from donors - as submitted said donor has sufficient resources as he was having manufacturing business as well acting as director/ partners in many firms and companies - CIT(A) deleted addition - HELD THAT:- CIT (A) concluded that the donors had made the gift of money which were out of explained sources as these were fully shown in their books of accounts. It was also noted that the donors were the persons of sufficient means. CIT(A) while allowing the appeal of the assessee relied on the decisions of Sanjeev Jain [2023 (2) TMI 1373 - CALCUTTA HIGH COURT] and Sharon Agarwal [2023 (5) TMI 1478 - ITAT DELHI] and Sheela Yogi [2021 (2) TMI 221 - ITAT JAIPUR]. Finally, CIT(A) deleted the addition by recording a finding a fact that the gifts were corroborated by the sources of income in the hands of the donors and therefore, assessee has fully discharged the onus of proving the three limbs of section 68 of the Act i.e. identity, genuineness and creditworthiness of the donors. CIT (A) noted that the gifts received from the relatives {as defined u/s 56(2)(vii) of the Act} are not taxable in the hands of the assessee u/s 56(2)(vii) of the Act and accordingly, deleted the addition. Appeal of the revenue is dismissed. Issues: Whether the addition of Rs.1,21,00,000 made under section 68 of the Income-tax Act, 1961 treating cash gifts received by the assessee as unexplained cash credit can be sustained.Analysis: Applicable legal framework includes section 68 (unexplained cash credit) and section 56(2)(vii) (exemption for sums received from relatives). The donors were brothers-in-law and thus fall within the definition of 'relative' under section 56(2)(vii). Documentary material available on record comprised donors' confirmations, income-tax returns, balance sheets and computations of income showing substantial incomes (approx. Rs.83.98 lakhs and Rs.80.81 lakhs) and recorded entries reflecting the gifts. The assessing officer's basis for addition was non-production of gift deeds without challenging the donors' identity or their financial capacity. Precedent supports that where the assessee discharges the initial onus by establishing identity, genuineness and creditworthiness of donors through corroborative documents, the burden shifts to the revenue to prove otherwise.Conclusion: The addition of Rs.1,21,00,000 under section 68 is not sustainable and is deleted; decision is in favour of the assessee.
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