Commissioner of Incometax v. Dr. Kodela Siva Prasada Rao

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The Tax Publishers2013 TaxPub(DT) 0374 (AP-HC) : (2013) 052 (I) ITCL 0355 : (2013) 263 CTR 0703 : (2013) 212 TAXMAN 0147 INCOME TAX ACT, 1961 --Income from undisclosed sources--Addition under section 68 Genuineness of gift proved by assessee--assessing officer noticed that assessee had received US dollars from an NRI which was credited to his capital account therefore, he required assessee to furnish complete details of receipt of above amount. Assessing officer was not satisfied with the details furnished by assessee and held that the identify of donor, or his creditworthiness or the genuineness of the transaction could not be verified, therefore, sum receipt was liable to be taxed under section 68. *Held:* Was not justified as the assessee had filed two confirmation letters given by the donor stating that the had gifted the above amount to the assessee, that he assessee was his close relative and that he was a man of means had gifted the said amount. Copies of income-tax returns filed by the donor in USA were also filed by the assessee. More so, though the assessee informed the assessing officer that the donor was available in India on account of the death of his mother-in-law and the contact details of the donor in India, the assessing officer did not bother to contact him and verify the above facts. Therefore, the assessee had discharged the burden cast on him to prove the identity of the creditor, the creditworthiness of the creditor and the genuineness of the transaction. Income Tax Act, 1961 Section 68 IN the Andhra Pradesh High Court Goda Raghuram & M.S. Ramachandra Rao, JJ. CIT v. Dr. Kodela Siva Prasada Rao ITTA No. 499 of 2012 ITTASR No. 3717 of 2010 A.Y. 2003-04 20 November, 2012 Section 68 of the Income-tax Act, 1961 - Cash credits - Gift Petitioner by :B. Narasimha Sharma JUDGMENT *M.S. Ramachandra Rao, J.* This appeal is filed under section 260-A of the Income Tax Act, 1961 (for short the Act) by the Revenue challenging the order dated 29-06-2010 in I.T.A.No.677/Vizag/2008 of the Income Tax Appellate Tribunal, Visakhapatnam relating to the assessment year 2003-04. 2. The respondent/assessee, an ex-MLA and an Ex-Minister filed his return of income on 8-10-2003 for the assessment year 2003-04 admitting a total income of Rs. 3,34,500 including income from other sources of Rs. 60,000 earned by him during the previous year. He also admitted agricultural income of Rs. 40,000. The return was processed under section 143 (1) on 19-01-2004. The assessing officer suspected that some income chargeable to tax had escaped assessment and issued a notice under section 148 on 11-10-2005 calling for return of income for the assessment year 2003-04. In response to this, the assessees authorized representative filed a letter dated 7-11-2005 stating that the return filed for the assessment year 2003-04 on 10-3-2002 may be treated as return filed in response to notice under section 148. Thereafter notice under section 143 (2) was issued on 12-12-2005. Further notice under section 142 (1) was issued on 28-6-2006 calling for total salary particulars including all allowances received by him in the capacity of Minster during the assessment year 2003-04. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 0374 (AP-HC) : (2013) 052 (I) ITCL 0355 : (2013) 263 CTR 0703 : (2013) 212 TAXMAN 0147

INCOME TAX ACT, 1961

--Income from undisclosed sources--Addition under section 68 Genuineness of gift proved by assessee--assessing officer noticed that assessee had received US dollars from an NRI which was credited to his capital account therefore, he required assessee to furnish complete details of receipt of above amount. Assessing officer was not satisfied with the details furnished by assessee and held that the identify of donor, or his creditworthiness or the genuineness of the transaction could not be verified, therefore, sum receipt was liable to be taxed under section 68. Held: Was not justified as the assessee had filed two confirmation letters given by the donor stating that the had gifted the above amount to the assessee, that he assessee was his close relative and that he was a man of means had gifted the said amount. Copies of income-tax returns filed by the donor in USA were also filed by the assessee. More so, though the assessee informed the assessing officer that the donor was available in India on account of the death of his mother-in-law and the contact details of the donor in India, the assessing officer did not bother to contact him and verify the above facts. Therefore, the assessee had discharged the burden cast on him to prove the identity of the creditor, the creditworthiness of the creditor and the genuineness of the transaction.

Income Tax Act, 1961 Section 68

IN the Andhra Pradesh High Court

Goda Raghuram & M.S. Ramachandra Rao, JJ.

CIT v. Dr. Kodela Siva Prasada Rao

ITTA No. 499 of 2012 ITTASR No. 3717 of 2010

A.Y. 2003-04

20 November, 2012

Section 68 of the Income-tax Act, 1961 - Cash credits - Gift

Petitioner by :B. Narasimha Sharma

JUDGMENT

M.S. Ramachandra Rao, J.

This appeal is filed under section 260-A of the Income Tax Act, 1961 (for short the Act) by the Revenue challenging the order dated 29-06-2010 in I.T.A.No.677/Vizag/2008 of the Income Tax Appellate Tribunal, Visakhapatnam relating to the assessment year 2003-04.

2. The respondent/assessee, an ex-MLA and an Ex-Minister filed his return of income on 8-10-2003 for the assessment year 2003-04 admitting a total income of Rs. 3,34,500 including income from other sources of Rs. 60,000 earned by him during the previous year. He also admitted agricultural income of Rs. 40,000. The return was processed under section 143 (1) on 19-01-2004. The assessing officer suspected that some income chargeable to tax had escaped assessment and issued a notice under section 148 on 11-10-2005 calling for return of income for the assessment year 2003-04. In response to this, the assessees authorized representative filed a letter dated 7-11-2005 stating that the return filed for the assessment year 2003-04 on 10-3-2002 may be treated as return filed in response to notice under section 148. Thereafter notice under section 143 (2) was issued on 12-12-2005. Further notice under section 142 (1) was issued on 28-6-2006 calling for total salary particulars including all allowances received by him in the capacity of Minster during the assessment year 2003-04.