Gift From Relative Needs No Gift Deed – Addition Deleted | ITAT

Case Details: Deb Prasanna Choudhury vs. ADIT/DCIT (International Taxation) [2025] 180 taxmann.com 265 (Kolkata-Trib.)

Judiciary and Counsel Details

• George Mathan, Judicial Member & Rakesh Mishra, Accountant Member
• D. Saha & K.K. Ghorai, ARs for the Appellant.
• Sallong Yaden, Addl. CIT(DR) for the Respondent.

Facts of the Case

The assessee, an individual, received a gift through his NRE account from his sister’s spouse, i.e., his brother-in-law. The assessee contended that the gift deed was not required in the case of movable property. Unsatisfied with the assessee’s reply, the Assessing Officer (AO) held that since no proper gift deed was made, the amount was liable to be assessed as ‘income from other sources’.

On appeal, CIT(A) upheld the additions made by the AO. The aggrieved assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that the assessee had received the gift from his brother-in-law, and any sum received from a relative is not assessable under section 56 of the Act. The term “relative” is defined in section 56 of the Act. Thus, the spouse of the assessee’s sister is also covered as a relative. Since the assessee filed a copy of the bank account evidencing the source of the gift, the same was not liable to be added to the assessee’s income.

For the purpose of section 56 of the Act, there is no need or requirement for a gift deed. The AO primarily was of the view that since no proper gift deed was made, therefore, the amount was liable to be assessed as ‘income from other sources’ and not exempt under section 56 of the Act.

However, section 56 of the Act, which exempts from assessment any sum received that exceeds Rs. 50,000, does not require a valid gift deed. It is provided in the section itself that if the amount is received from a relative as defined therein, the same is not liable to be assessed under section 56 of the Act. Therefore, the addition made by the Assessing Officer was to be deleted.

List of Cases Reviewed

• Atul H. Patel v. ITO [2022] 138 taxmann.com 454/195 ITD 297 (Ahmedabad – Trib.) (para 13) Followed.

List of Cases Referred to

• Atul H. Patel v. ITO [2022] 138 taxmann.com 454/195 ITD 297 (Ahmedabad – Trib.) (para 13).