Actress Shilpa Shetty has got partial relief from the Bombay bench of the Income-Tax Appellate Tribunal (ITAT) which held that a gift deed and PAN card details alone were not sufficient to establish the genuineness of a gift under section 68 of the Income-Tax Act. She had received a “gift” of Rs. 12.50 crore from her husband, Raj Kundra, which was treated as unexplained credit and added to her income during the financial year 2019-20.
The ITAT directed fresh examination of the matter, which gives the actress a second chance to prove its genuineness.
During scrutiny of the case, Shilpa furnished a copy of the gift deed, her PAN card details and the donor’s (husband’s) income-tax return acknowledgement. The I-T officer noted that Raj had shown his total income to be Rs. 27.70 lakh only, which was not commensurate with the amount of the gift given. Thus the creditworthiness of the donor could not be established.
Shilpa Shetty claimed that her husband received funds from an overseas entity, but details could not be properly correlated with disclosures made in the appropriate schedule in his income-tax return. Therefore, the I-T officer treated the gift as non-genuine and added the amount to Shilpa’s income.
The ITAT bench observed that mere documentation of such a gift deed cannot by itself establish the genuineness or otherwise of the transaction. It 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 lied on the taxpayer (in this case, Shilpa Shetty) 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.
