Case Number: ITA 1098/DEL/2020
Appellant: Umesh Saraf, New Delhi
Respondent: ACIT, Circle-27(1), New Delhi
Assessment Year: 2016-17
Result: Final Tribunal Order
Case Filed On: 2020-03-17
Date of Order: 2022-10-17
Pronounced On: 2022-10-17
This case pertains to the addition of Rs. 8,53,89,440/- as unexplained gift received by Umesh Saraf, New Delhi, from his NRI father, Sh. Radhe Shyam Saraf, for the assessment year 2016-17. The primary issue in this appeal was whether the gift received from the appellant’s father could be treated as unexplained cash credit under Section 68 of the Income Tax Act.
Umesh Saraf, New Delhi, filed an appeal against the order dated 22/10/2019 passed by CIT(A)-9, New Delhi, for the assessment year 2016-17. The grounds of appeal raised by the assessee included alleged violations of natural justice, improper addition under Section 68, and failure to consider the genuineness and creditworthiness of the donor.
The AO made an addition of Rs. 8,53,89,440/- under Section 68 by treating the gift received from the appellant’s father as unexplained. The AO directed the assessee to produce his father for confirmation and recording of his statement. The notice for production was issued at 21:04 on 29/12/2018, requiring the presence of the donor by 11:30 AM on 30/12/2018, which was deemed impossible by the assessee due to the short notice and the donor’s residence in Hong Kong.
The CIT(A) upheld the addition made by the AO, stating that the assessee failed to produce the donor, thereby casting doubt on the genuineness of the gift.
During the proceedings before the ITAT, the appellant argued that the CIT(A) had erred in upholding the addition without properly considering the evidence provided. The key points discussed were:
Appellant: Sh. I. P. Bansal, Adv. & Sh. Vivek Bansal, Adv.
Revenue: Sh. M. Baranwal, Sr. DR
The learned counsel for the assessee submitted that the addition was made solely on the basis of failure to produce the donor within a short notice period, despite the submission of substantial evidence proving the identity, creditworthiness, and genuineness of the gift. The counsel argued that the donor, being 85 years old and residing in Hong Kong, could not be produced on such short notice. The counsel provided various documents, including the donor’s ITR, passport, permanent residency card of Hong Kong, gift deed, and bank statements, to support the genuineness of the gift.
The learned Departmental Representative relied on the orders of the CIT(A) but did not oppose the proposal to remit the matter back to the CIT(A) for fresh consideration if necessary.
The Tribunal analyzed the submissions and verified the evidence provided by the assessee. The key findings were:
Therefore, the Tribunal concluded that the identity, creditworthiness, and genuineness of the gift were sufficiently established, and no addition under Section 68 was warranted based solely on the non-production of the donor within the short notice period.
The ITAT concluded that the addition of Rs. 8,53,89,440/- as unexplained gift received by Umesh Saraf from his NRI father was not justified. The Tribunal held that the identity, creditworthiness, and genuineness of the gift were adequately proved, and the short notice period for producing the donor was unreasonable. As a result, the appeal was allowed in favor of the assessee, and the addition was deleted.
Order pronounced in the open court on 17th October 2022 by Dr. B. R. R. Kumar, Accountant Member, and Anubhav Sharma, Judicial Member.
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