Actor and entrepreneur Shilpa Shetty has gotten partial relief in an Income Tax related case pertaining to a Rs 12.5 crore “gift” given to her by her husband Raj Kundra. The Income-Tax Appellate Tribunal (ITAT), which is examining the case, has ordered a fresh inquiry into the matter giving Shilpa a second chance to prove her genuineness, as per reports.
The case pertains to financial year 2019-20 where a Rs 12.5 crore amount was received by Shilpa, which she claimed was a gift by her husband Raj. However, the amount was treated as "unexplained credit" by the inspecting I-T officer and added to her income. To prove her standing, Shilpa furnished a copy of the gift deed, PAN details and her husband’s income-tax return acknowledgement. The I-T officer, however, noted that her husband had shown his total income to be Rs 27.7 lakh only and this did not commensurate with the amount of gift given, thus the creditworthiness of the donor could not be established.
To this Shilpa said that her husband Raj 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 has now observed that mere documentation of such as a gift deed cannot by itself establish the genuineness of a transaction. The Mumbai 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 actor) 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.
