Mumbai: Actress Shilpa Shetty Kundra has got a partial relief from the Mumbai bench of the Income-Tax Appellate Tribunal (ITAT), which held that a gift deed and PAN details alone are not sufficient to establish the genuineness of a gift under Section 68 of the Income-Tax (I-T) Act.She had received a “gift” of Rs 12.5 crore from her husband, which was treated as “unexplained credit” and added to her income during the financial year 2019-20. However, the tax tribunal directed fresh examination of this matter, which gives her a second chance to prove its genuineness.The section deals with cash credits where the assessee offers no explanation.During scrutiny of the case by the I-T officer, Shetty Kundra furnished a copy of the gift deed, PAN details and the donor’s (husband’s) income-tax return acknowledgement. The I-T officer noted her husband had shown his total income to be Rs. 27.7 lakh only; this did not commensurate with the amount of gift given, thus the creditworthiness of the donor could not be established. Shetty Kundra claimed her husband received funds from an overseas entity, but details could not be properly correlated with disclosures made in appropriate schedule in his tax return. The I-T officer thus treated the gift as non-genuine and added the sum to the actor’s income for that relevant year.The ITAT bench observed that mere documentation of such as a gift deed cannot by itself establish the genuineness of a transaction. The tax tribunal bench also noted that the gift deed did not mention the mode of payment, bank details, or the manner in which the gifted amount was transferred.Holding that the primary onus under Section 68 lies on the taxpayer (in this case the actress) to prove identity, genuineness and creditworthiness, the ITAT directed the I-T officer to re-examine the issue after giving her an opportunity to produce complete bank records, financial statements and supporting evidence to substantiate the gift.
