In the F.Y 2019-2020, assessee received gift of Rs. 1 crores from his grandfather by account payee cheque and supported by proper gift deed. Grandfather is assessed to tax regularly and had income of Rs. 5,00,000\/- for the F.Y 2019-2020 which comprises of income from House Property and interest.<\/p>\n
During the course of assessment proceedings, assessing officer issued a show cause to the assessee asking him as to why the addition u\/s 68 of the Act should not be made in respect of receipt of gift from the grandfather as grandfather had only income of Rs.5,00,000\/-. Assessee submitted the affidavit of the grandfather giving the explanation that even though the income of Rs. 5,00,000\/-, he had collected his deposits which he has given in the earlier years and given the gift out of said funds. Further, he has also submitted the balance sheet for the preceding 3 years which indicates that his capital account is more than Rs. 1.5 crores in each of the said years.<\/p>\n
The AO issued summons to the grandfather, however, he did not appear before the AO.<\/p>\n
The AO therefore made an addition u\/s 68 in hands of the individual amounting to Rs. 1 crores on the ground that grandfather does not have proper source and has not appeared before the AO.<\/p>\n
Is the action of AO legally justified?<\/p>\n","protected":false},"comment_status":"open","ping_status":"closed","template":"","qa_expert":[515],"qa_category":[23],"qa_tag":[147,239,607,538],"class_list":["post-27036","qa","type-qa","status-publish","hentry","qa_expert-dr-k-shivaram-senior-advocate","qa_category-income-tax","qa_tag-cash-credits","qa_tag-gift","qa_tag-grand-father","qa_tag-section-68"],"acf":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa\/27036","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/qa"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=27036"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=27036"}],"wp:term":[{"taxonomy":"qa_expert","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_expert?post=27036"},{"taxonomy":"qa_category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_category?post=27036"},{"taxonomy":"qa_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_tag?post=27036"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}