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2016 (5) TMI 482 - AT - Income TaxAddition invoking the provisions of section 56(2)(v) - whether gift cannot be revoked after acceptance? - Held that:- The gift deed, as reproduced hereinabove, clearly shows that the amount was being transferred, but such transfer was irrevocable at the instance of the transferor. It is trite that a document has to be read as a whole, in order to gather the intention behind the transaction. A reading of the gift deed shows that though the term employed is ‘gift’, the transferor intended to transfer the source of ₹ 5 lacs to the assessee only temporarily. This fact is also confirmed by the fact of issuance of revocation notices by the transferor to the assessee. It also gets buttressed by the very relevant fact of return of the amount by the assessee to the transferor on 27.03.2011, which fact has also been affirmed by the ld. CIT(A). It shows as covered in the written submissions that the assessee was never vested absolute ownership of the amount transferred. The transfer of the amount of ₹ 5 lacs to the assessee was a revocable transfer and it was in fact revoked. The nomenclature employed is not determinative of the transaction, as is well settled. In fact, by making this observation, the ld. CIT(A) has himself accepted that the transaction was not a gift. It was a temporary transfer of money, which was revoked at the option and instance of the donor. The transfer, as stated, is taken to be interest free unsecured loan. It amounts to money received, which money was returned. Moreover, even before the AO, the assessee had offered the explanation of the transaction being a gift, which position does not undergo any change in view of the document of transfer, as per which, the transfer was a revocable transfer. Revocation notices were issued and the money was ultimately returned. Observation of the ld. CIT(A) that the mere repayment after more than five years was done with a motive to change the colour of the transaction from that of a gift is erroneous. The fact remains that the transfer was revocable a transfer, at the instance of the transferor, which fact has not been disputed. Rather, to reiterate, revocation notices were issued by the transferor and in response to such notices, the transfer was revoked and the money was returned to the transferor. The ld. CIT(A) talks of ‘certain motive’ behind the transaction. However, as to what such ‘certain motive’ could be, does not have any reference to whatsoever in the impugned order. This observation of the ld. CIT(A) is also based only on assumptions and presumptions and the same cannot stand in the eye of law. Thus, the transaction in question has neither been shown to have been undertaken to avoid any tax liability, nor to have been undertaken for any ulterior intention of the assessee to circumvent any legal process. It was a temporary advancement of the money by the transferor to the assessee and the amount was repaid when asked for, as per the transfer document. Finding merit in the grievance sought to be raised by the assessee, the same is accepted. The order of the ld. CIT(A) is reversed. The addition is deleted. - Decided in favour of assessee
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