2009 (12) TMI 657 - AT - Income Tax

Gift - relationship of donor and done Held that - assessee failed to bring any evidence indicating the motive for the gift i.e. love and affection etc. between the donor and done - As far as furnishing of evidence in the shape of gift deed PAN number etc. are concerned when such gifts are received under due consultation then hardly their can be any lacuna in the documentation. But such documents are not sufficient for treating such gifts as genuine Against assessee. Gift received by the assessee from her NRI brother - evidence exhibiting the gift received was also supplied - gift comes within the ambit of exception provided in sec. 56(v) of the Act because it was received from the real brother - Assessing Officer doubted the genuineness of the gift only on the ground that assessee has been showing receipt of gift in almost alternate year Held that - That cannot be a sound logic for doubting the gift from the blood relative Addition deleted In favor of assessee. Income from house property deduction of interest on loan - assessee has shown house loan from firm interest disallowed on the ground that assessee was not occupying the house which was purchased after availing loan Held that - She was found with her husband on a different premises at the time of search that does not mean that she cannot claim deduction of interest expenses on a housing loan in her individual return - Section 24(b) nowhere put any restriction on such claim for the reasons assigned by the learned CIT (Appeals) as well as Assessing Officer decided in favor of assessee.

Summary

Issues involved:
- Assessment year 2002-03: Disbelief of gift claim leading to addition of Rs. 5,21,000.
- Assessment year 2006-07: Disbelief of gift claim leading to addition of Rs. 10,36,109; Disallowance of interest deduction of Rs. 1,50,000 for house loan.

Analysis:
1. Assessment Year 2002-03:
- The assessment was conducted under sec. 153A due to a search carried out on the assessee. The Assessing Officer added Rs. 5,21,000 to the income, disbelieving the claim of gift received from Shri Mukesh Mittal. The assessee provided documentation to support the gift claim, but the Assessing Officer was not convinced.
- The appeal to the CIT(A) did not favor the assessee. The counsel argued that no search was conducted on the assessee, citing a case precedent. However, the search warrant was produced, confirming the search. The Tribunal upheld the addition of Rs. 5,21,000, citing lack of evidence for the genuineness of the gift.

2. Assessment Year 2006-07:
- In this year, the assessee received a gift of Rs. 10,36,109 from her NRI brother. The Assessing Officer doubted the genuineness of the gift due to past gift receipts. However, the Tribunal found the claim valid as the donor was a blood relative, allowing the appeal and deleting the addition.
- Another issue related to the disallowance of interest deduction of Rs. 1,50,000 for a house loan. The Assessing Officer disallowed the claim due to lack of a certificate indicating interest payment. The CIT(A) upheld the disallowance based on the assessee not residing in the purchased house. The Tribunal disagreed, stating that the assessee, as an individual taxpayer, was entitled to the deduction. The disallowance was deleted, emphasizing the independent taxability of the assessee.

In conclusion, the Tribunal confirmed the addition of Rs. 5,21,000 for the assessment year 2002-03 but deleted the addition of Rs. 10,36,109 for 2006-07. Additionally, the disallowance of interest deduction of Rs. 1,50,000 was overturned for the house loan, allowing the appeal for this year.