Facts of the case
The assessee is an NRI and he has deposited cash of Rs.1144000 in his bank account. He has been a resident of Auckland, New Zealand since 2003. There was a mismatch in the time of deposit of cash in the bank account. The assessing officer has the doubt the cash was not deposited from the gift amount. The assessing officer has the view that cash was deposited before the date of formulation of the gift deed, hence AO treated the cash amount as a cash credit under section 68 of the income tax act and added the same to the total income of the NRI.
Aggrieved with the decision of the AO, assessee preferred an appeal to CIT(A) where he stated that he has received the amount from his father and his brother who are in agriculture activity on the land held by them in their personal capacity and the land belongs to other persons. The assessee also produced the cash book, bank book and 7/12 extract and gift deed.
The CIT(A) called for the remand report from the AO, where the AO mentioned that cash was not deposited from the source of the gift because cash was deposited before the date of the gift deed. In response, the assessee submitted that the gift was actually received on 7th October 2011 but there was a typographical error in the gift declaration wherein it was wrongly mentioned as 27 October 2011.
The CIT(A) held that the assessee is an unusual and wealthy NRI who has accepted the gift from his father and brother. According to CIT(A), donors don’t have sufficient resources and capacity to gift to the NRI relative. Therefore, CIT(A) confirmed the order of the AO.
Aggrieved with the decision of CIT(A) Assessee(NRI) preferred an appeal to the tribunal (ITAT). The tribunal held that it was revenue who doubted that the cash was not deposited from the gift received by the NRI. It held that NRI has discharged his onus by submitting the revised deed of gift that the amount was deposited from the amount of gift. Now the onus shifts upon the revenue to disapprove the contention of the assessee based on the documentary evidence. Tribunal observed that no documentary evidence was brought on record by the revenue to prove its contention.
Tribunal further observed that the assessee being an NRI is very unusual and wealthy and accepts gifts from the father and brother. Generally, the practice is different in society. As such NRIs give gifts to relatives but there is no such prohibition on NRIs accepting gifts from relatives. In the absence, no adverse inference can be drawn against the assessee against the prevailing system in society.
Tribunal noted the assessee has furnished sufficient documentary evidences, however, revenue has not made any cross verification from the concerned parties in order to bring out the truth on the surface. Tribunal held that revenue should have cross verified from the donors by issuing notice under section 133(6) /131 of the income tax act.
Tribunal set aside the order passed by the CIT(A) and directed the AO to delete the demand raised by him.
Atul H. Patel Vs I.T.O (ITAT Ahmedabad)