Presents obtained from relations and mates can generally land you within the earnings tax web. One such case was of a Mr. Maheshwari from Agra, who needed to show the genuineness of Rs 10 lakh obtained as money from his sisters.In line with an ET report, a businessman from Agra, Mr. Maheshwari, mentioned he obtained Rs 2.74 crore (2,74,33,250) as a present from his Delhi-based sister, together with Rs 6.25 lakh from one other sister. Each sisters have been married, and he utilised these funds in his enterprise ventures. He subsequently filed his earnings tax return (ITR) for AY 2016-17, declaring an earnings of Rs 10 lakh (10,80,770).His ITR confronted scrutiny after receiving a discover below Part 143(2) on September 19, 2017. The earnings tax assessing officer (AO) documented within the evaluation order that Mr. Maheshwari earned earnings as a agency companion. The officer noticed a capital improve of Rs 1.8 crore (1,83,77,061) throughout AY 2016-17.In the course of the investigation, Mr. Maheshwari clarified that he had launched capital of Rs 3.67 lakh and Rs 1.8 crore into his proprietorship companies. He attributed this to his Delhi-based sister's present of Rs 2.74 crore (2,74,33,250), which she had declared in her ITR.He moreover reported receiving Rs 6,25,000 in presents from his different sister. While he offered documentation to exhibit the donors' monetary functionality, the tax officer questioned sure transactions. These included two Rs 5,00,000 presents obtained on April 15, 2015, and Might 15, 2015, from his Delhi sister, plus the Rs 6,25,000 from his different sister, citing inadequate documentation.Additionally Learn | PPF guidelines: Why Kerala Excessive Court docket ordered a mom to return additional curiosity earned in youngsters's Public Provident Fund accounts – definedThe tax official deemed these present quantities as a deliberate association to evade taxation below the Earnings Tax Act and categorised them as unexplained money credit score below Part 68 throughout evaluation, the ET report mentioned.The Agra resident challenged this choice by submitting an attraction with the Commissioner of Appeals (CIT A).The CIT A confirmed the tax official's classification of the Rs 10,94,000 present from the Delhi-based sister as unexplained money credit score below Part 68, citing inadequate proof of the donor's monetary capability. Dissatisfied with this choice, the person approached the Earnings Tax Appellate Tribunal Agra bench. On September 30, 2025, the ITAT Agra dominated in his favour, the report mentioned.
Money presents below tax web: What helped show the genuineness?
The brother's success within the case stemmed from offering complete documentary proof that validated each the authenticity of the presents and the monetary capability of the donors.In line with the ET report, the Tribunal's findings have been:
- The present transactions have been thought of credible as they occurred between organic sisters, demonstrating pure familial bonds and care.
- Each sisters offered clear proof of their funding sources – one via documented property sale earnings while the opposite via verified financial institution information.
- All transactions have been correctly authenticated and one was particularly processed via correct banking channels.
- The Income Division's failure to conduct correct verification, regardless of accessing all essential data, meant the assessee couldn't be held answerable for any perceived shortcomings within the inquiry.
Additionally Learn | Six years after receiving wage arrears, retired workers have been informed to repay the complete quantity – till this Supreme Court docket ruling modified every partThe ITAT Agra dominated that the Part 68 additions have been unwarranted, deciding within the assessee's favour by accepting the presents as reliable and correctly defined.ITAT Agra's judgement (ITA No. 316/AGR/2024) dated September 30, 2025, acknowledged that the assessee's legal professionals highlighted a sale deed exhibiting his Delhi-based sister had obtained money from a property sale, which she subsequently gifted to him. The tribunal famous that their sibling relationship was undisputed.ITAT Agra mentioned: “The factum of a sister giving a present to brother can be supported by affirmation. Therefore in my thought of opinion, the supply of the donor can be established by the assessee herein within the on the spot case.”The tribunal famous that the assessee confirmed his sister had correctly paid capital good points tax on the property sale.ITAT Agra noticed that the CIT (A) had identified the Delhi Sister's returns weren't scrutinised below Part 143(3).ITAT Agra declared: “This can't be a cause to disbelieve the present and doubt the creditworthiness of her. Earnings Tax will not be within the assessee's (brother) palms as to get her returns scrutinized. That job is left to the knowledge of the earnings tax division. The assessee can't be faulted for an act which isn't in his management. Therefore there isn't a cause to disbelieve her creditworthiness to have given a money present of Rs 10,94,000 to the assessee (brother) and accordingly the identical is to be handled as defined.“
The documentation reviewed by the Tribunal included:
- Reward declarations and confirmations from each sisters;
- Sale deeds proving Smt. Bansal's receipt of sale proceeds;
- Financial institution statements from donors demonstrating fund availability and transfers;
- The assessee's financial institution statements validating the receipts.
Chartered Accountant (Dr.) Suresh Surana informed ET that the Tribunal's evaluation confirmed that each donors have been the assessee's organic sisters, validating the familial bond acceptable for such presents. The supply of Smt. Bansal's money presents was adequately substantiated via property sale proceeds. The Tribunal specified that the absence of scrutiny of her return below Part 143(3) was not adequate grounds to query her creditworthiness, as this accountability falls below the Earnings Tax Division's jurisdiction slightly than the assessee's.Surana notes that relating to Smt. Agarwal's case, the Tribunal decided that the present switch occurred via correct banking channels, supported by financial institution information and present affirmation. The Tribunal concluded that the assessee had adequately fulfilled obligations below Part 68, demonstrating the donor's id, creditworthiness, and transaction authenticity, significantly for the reason that Assessing Officer didn't pursue extra donor investigations regardless of having full data.
