ITAT: No Need Of Any ‘Occasion’ For Receipt Of Gift By The Assessee

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) in the case ITO Versus Dr. Satish Natwarlal Shah observed and has held that there being no need of any “occasion” to the assessee for receiving the gift.
The two-member bench comprising of Judicial Member, T.R. Senthil Kumar and the Accountant Member, Annapurna Gupta observed and has noted that the assessee received the gift from his own brother, who has been a non-resident since 1966. It was observed that the allotment of shares was made under the NRI quota to the assessee’s brother in the USA and the genuineness and the source are being proved beyond doubt.
In the present case, the assessee/respondent is an individual and a doctor by profession. His return of income was filled by the assessee, declaring the total income. Thus, the case for scrutiny was selected. It has been noticed by the Assessing officer that the gift has been received by the assessee in the form of various shares of the company. It has also been gifted by the assessee an amount of Rs. 1,06,65,848 during the financial year to his relatives and the assessee sought an explanation.
However, it has been replied by the assessee that the assessee received from his brother residing in the U.S.A, the gifts in the form of debentures and the shares., which were being made out of natural love and affection.
The gift has been treated by AO as unexplained and has added Rs. 3,06,13,009 as the income of the assessee and of the demanded tax.
An appeal has been filled by the assessee before the Commissioner of Income Tax (Appeals). Further, the assessee filed additional evidence, namely, DMAT A/c opening details by an NRI brother and the evidence of the purchase of shares by an NRI brother that was gifted to the assessee, the bank statement of Axis Bank Ltd. of an NRI brother showing debit entries for gifts which are made to the assessee.
It has been determined by the CIT(A) that the AO accepted the assessee’s brother’s purchase of shares under the NRI quota, with funds which are coming from the assessee’s brother’s NRE bank account. Therefore, it has been satisfied by the AO the genuineness of the gift but has doubted the “occasion of the gift” in the absence of any family functions, namely marriage, etc.
Accordingly, the tribunal held that the whole approach of the AO was perverse, which cannot be sustained in law, and thus the deletion by the CIT(A) does not require any kind of interference.