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2020 (11) TMI 647 - AT - Income TaxReopening of assessment u/s 147 - purchase of the land was out of gifts/ loan received from relatives/ friend - Notice merely on the basis of presumption and on the basis of information received - whether any tangible material and live link of concealment of income? - contention of the assessee is that the assessing officer has not applied his mind before reopening of the assessment - HELD THAT:- No merit in this contention of the assessee as the material regarding purchase of property was not available before the assessing officer. As the claim of the assessee was before the assessing officer was that he received gift from his family members and friend. In the absence of material evidence supporting such claim the assessing officer was justified in reopening of assessment. Admittedly, in response to notice issued before reopening of the assessment, it was stated that the source of investment was gift and loan from relatives and friend. But no evidence proving creditworthiness of persons was placed before assessing officer. It is noticed that grand-mother, mother, mother-in-law and wife of the assessee from whom he received gift are housewives. They do not have independent source of income except the gift received and savings made out of household expenses. The assessee did not place any evidence proving their independent source of income. Hence, no fault can be found in the action of assessing officer for reopening of assessment. Addition and enhancement made by the Ld. CIT(A) invoking the provision of section 68 - HELD THAT:- Looking to the facts of the present case when the assessee is claiming that the source of investment was from the gifts given by the family members and considering the facts that the assessing officer has verified the factum of gifts received by the assessee and partly granted the relief. There was no credible evidence before the Ld. CIT(A) to rebut the findings of assessing officer. The assessee placed documents related to sale of property by father-in-law and mother-in-law - entire evidence could not be brushed aside without making proper verification. The Ld. CIT(A) was not justified enhancing the income. Therefore, we direct the assessing officer to delete the addition. Addition on declaration made in the return - assessee had placed on record all evidences regarding receipt of gifts etc. from the family members - HELD THAT:- It is settled law that only the receipt that partake character of income is required to be taxed. If receipt is in the nature of gift which does not partake character of income would certainly be not taxable - issue related to gift/loan received from wife, relatives and friend is restored to the file of the assessing officer for verification of veracity of the claim of the assessee - AO is hereby directed to re-examine the issue of gift and loan of the aforesaid persons. If the claim of the assessee is found correct he would delete the remaining addition made in this respect. The grounds of the assessee are partly allowed in the terms indicated hereinabove. Disallowance of opening balance of capital - As contended on behalf of the assessee that the ld. CIT(A) did not consider opening capital as out of gift from father and other family members - HELD THAT:- As the opening balance was part of the enhancement made by the ld. CIT(A) as we have deleted the enhancement. Therefore, this ground of the assesseee’s appeal is allowed. Low marriage Expenses addition - HELD THAT:- Looking to the facts of the case, we do not see any infirmity into the finding of the authorities below. The addition made on account of low marriage expenses is hereby sustained. Penalty u/s 271(1)(c) - HELD THAT:- In this case in quantum appeal substantial addition made by the assessing officer has been deleted and rest of the additions made has been set aside for verification of the assessing officer. Under these facts, we hereby set aside the penalty order and direct the AO to delete penalty in respect of additions deleted and additions in respect of issues which have been set aside to the file of Assessing officer for verification.
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