On 15th August 2024, Smt. Vandana, maternal aunt of Suresh, transferred ₹65 lakhs in his account. In this case, additions were made by the Assessing Officer, under section 68 of Income Tax Act, 1961 on the grounds that a

The similar matter was decided in case of "Pendurthi Chandershekhar vs DCIT (2018) (Hyderabad High Court). In this case, additions were made under section 68 on the grounds that assessee had failed to show why, without any occasion, the amount gifted by the maternal aunt without any consideration. The appellate authorities also upheld the action of Assessing Officer (AO). On further appeal, the High Court held in favour of assessee that an occasion is not necessary to accept a gift from a relative. Section 56 does not envisage any occasion for a relative to give a gift. It was almost impermissible for any authority and even for a court to import the concept and develop a theory based on such concept. The court further held that when donor had given a confirmation letter that she had transferred the amount to her nephew as a gift out of natural love and affection, the AO should not have further doubted her. The donor in instant case was assessee's own maternal aunt and was covered within the definition of 'relative' defined under explanation to section 56(2)(v). Therefore, unexplained addition under section 68 with respect to gift of ₹65 lakh received by assessee from his maternal aunt is not justified, the action of AO is not tenable in Law.