ITAT Questions Rs. 12.54 Cr Gift to Shilpa Shetty | Section 68 Addition Upheld

Case Details: Shilpa Shetty Kundra vs. Deputy Commissioner of Income-tax - [2026] 184 taxmann.com 318 (Mumbai-Trib.)

Judiciary and Counsel Details

• Narender Kumar Choudhry, Judicial Member & Prabhash Shankar, Accountant Member
• Ms Simran Dhawan & Ravi Gantara, Advs. for the Appellant.
• Leyaqat Ali Aafaqui, Sr. D.R. for the Respondent.

Facts of the Case

The assessee, Shilpa Shetty Kundra, was an individual who earned income from a business or profession and interest income. During the relevant assessment year, she received a gift from her husband amounting to Rs. 12.54 crores.

During the assessment proceedings, the assessee furnished copies of the gift deed and the acknowledgement for the income tax return filed by her husband. However, the Assessing Officer (AO) found that the husband had shown income of Rs. 27,71,020 in his return of income for A.Y 2020-21, which is not commensurate with the amount of gift of Rs. 12,54,54,594.

The AO issued a show-cause notice to the assessee and, unsatisfied with the response, made additions to the assessee’s income under section 68. On appeal, the CIT(A) affirmed the addition made by the AO. The matter reached the Mumbai Tribunal.

ITAT Held

The ITAT observed that although the assessee had produced the gift deed and PAN details, she failed to demonstrate the actual movement of funds, as neither the bank statements nor clear evidence of transfer were produced before the authorities. The assessee failed to provide details of the transaction involved and/or the mode of payment for the gift. The assessee did not file the bank statement, despite the AO specifically asking on various occasions. Even her husband’s income tax return was not commensurate with the amount gifted.

The assessee claimed that she had received a gift from her husband out of natural love and affection. However, the mode of payment/mode of gift/detail of transferring the gifted amount was nowhere mentioned in the Gift Deed.

The Tribunal further observed discrepancies in the explanation regarding the source of the funds. The assessee claimed that the donor had received funds from an overseas entity (Kuki Investments), but the relevant entries were not properly correlated with disclosures in the donor’s income-tax returns, particularly in Schedule FA relating to foreign assets.

The financial details and schedules in the donor’s returns also did not clearly substantiate the availability of funds or their subsequent transfer as a gift. Consequently, the Tribunal held that the assessee had not fully discharged the primary onus under Section 68 to establish the identity of the donor, the genuineness of the transaction, and the donor’s creditworthiness with cogent documentary evidence.

At the same time, the Tribunal noted that certain additional documents, including income-tax returns and bank statements, had been produced only at the appellate stage and required proper verification. Considering the overall circumstances, the Tribunal remanded the matter back to the jurisdictional Assessing Officer for fresh examination.

List of Cases Reviewed

• CIT v. Orissa Corporation (P) Ltd. AIR 1986 SC 1849
• CIT v. Divine Leasing & Finance Ltd [2007] 158 Taxman 440/299 ITR 268 (Delhi) (para 31) distinguished

List of Cases Referred to

• CIT v. Orissa Corporation (P) Ltd. AIR 1986 SC 1849 (para 14)
• CIT v. Divine Leasing & Finance Ltd [2007] 158 Taxman 440/299 ITR 268 (Delhi) (para 14).