2026 (3) TMI 1231 - AT - Income Tax

Unexplained gift credit under Section 68: Tribunal remits matter for fresh verification of donor evidence and bank records.

Section 68 was examined in relation to an alleged gift from a spouse treated as unexplained credit. The Tribunal noted that the assessee had filed a gift ... Unexplained credit u/s 68 - gifts between spouses - adjudication in view of missing/verifiable evidence - Whether the addition made as unexplained credit under section 68 in respect of a claimed gift from spouse should be sustained or the matter remanded for fresh adjudication? - HELD THAT: - The Tribunal found that the Assessee had produced a gift deed, PAN and ITR acknowledgements but failed, despite specific queries from earlier authorities, to furnish contemporaneous bank statements or a clear mode of transfer showing the movement and source of the alleged gifted amount. Material discrepancies in the donor's ITR schedules and lack of correlation between the bank entries and the claimed gift were recorded. The AO had limited opportunity to examine the donor because key details were provided at a late stage, and factual verifications (including enquiries under Section 133(6)/131) could not effectively be completed. Considering that the Assessee did not fully discharge the prima facie onus under section 68 and that the available documents and proposed evidence require factual verification, the Tribunal concluded that the matter must be remitted to the Jurisdictional AO for a fresh decision after affording the Assessee a reasonable opportunity to file and prove complete details; the Tribunal directed that the Assessee must furnish the required documents without default and warned that no leniency would be afforded in case of subsequent default. [Paras 28, 29, 30, 31] Final Conclusion: The Tribunal declined to decide the addition on merits and, because relevant factual material was incomplete and required verification, remanded the issue of the claimed gift (A.Y. 2020-21) to the Jurisdictional AO for fresh adjudication after affording the Assessee an opportunity to file complete documents. Issues: Whether the addition of Rs. 12,54,54,594/- treated as unexplained credit on account of gift from spouse could be sustained, or whether the matter requires remand for fresh adjudication in view of missing/verifiable evidence.Analysis: The Tribunal examined whether the assessee had discharged the primary onus under Section 68 of the Income-tax Act, 1961 by producing documents to prove identity, genuineness and creditworthiness of the donor and mode of transaction. The record shows the assessee supplied a gift deed, PAN and acknowledgements but did not provide contemporaneous bank statements or clear bank entries evidencing transfer of the gifted amount before the authorities below; certain material documents (complete ITRs and bank statements) were filed for the first time before the Tribunal. Discrepancies and lack of correlation were noted between ledger entries, bank statements and Schedule FA/AL entries in the donor's ITRs; the mode of payment and source of funds were not specifically recorded in the gift deed or affidavits. The Tribunal found that the available material required factual verification and that the assessing officer below had not had a fair opportunity to make enquiries under Sections 133(6) / 131 because key details were furnished late in the proceedings. In view of these facts and the need for on record factual verification, the Tribunal concluded that the matter should be remitted to the jurisdictional assessing officer for fresh adjudication with an opportunity to the assessee to produce complete evidence.Conclusion: The appeal is remitted to the file of the jurisdictional Assessing Officer for de novo decision after affording the assessee a reasonable opportunity of being heard; the appeal is allowed for statistical purposes.