Kushal Tandon: Actor will get ITAT help over Rs 30 lakh present from dad

Kushal Tandon: Actor gets ITAT relief over Rs 30 lakh gift from dad

MUMBAI: The Mumbai bench of the Earnings Tax Appellate Tribunal (ITAT) has held {{{that a}}} present of Rs 30 lakh obtained by Bollywood actor Kushal Tandon from his father merely shouldn’t be bogus and can’t be handled as unexplained revenue.
This was definitely one in every of many disputed tax elements for the monetary 12 months 2013-14 for which the actor had filed an attraction with the ITAT. If the tribunal had upheld the present as an unexplained revenue (technically often known as an ‘unexplained money credit score rating ranking’), the actor would have wished to pay tax on it at a steep price of 83.25%.
Presents obtained from sure kinfolk (equal to mother and father) are exempt from revenue tax (I-T) beneath Half 56 of the I-T Act. Nonetheless, tax officers have a tendency to try devices by a microscopic lens to make it doable for no foul play is anxious and unaccounted cash merely shouldn’t be being confirmed as a present. If the recipient is unable to substantiate the present, it’s handled as an ‘unexplained money credit score rating ranking’, which is taxed at a excessive price of 60% plus 25% surcharge and in addition to a 6% penalty. The ultimate phrase tax price is 83.25% roughly.
On this case, Tandon was requested to provide documentary proof to assist the present transaction. His father’s I-T return for the 12 months by which the present was made confirmed an revenue of Rs 4.12 lakh solely. On this foundation, the I-T officer held this present to be an ‘unexplained money credit score rating ranking’ and sought to tax it accordingly contained in the actor’s arms.
Tandon submitted to the ITAT that the then restricted earnings of the actor weren’t ample to assist him meet his funds. Thus, his father had come to the rescue of his solely son and had gifted this quantity out of his earlier financial monetary financial savings. His father, Virendra Tandon, was an regularly I-T payer and had disclosed the present transaction in his monetary statements. A present deed had furthermore been duly submitted to the tax authorities.
Nonetheless, the ITAT acknowledged that the I-T division had didn’t take into cognisance that the daddy had gifted the sum out of his earlier gathered financial monetary financial savings. In its order, the ITAT talked about, “We concur with the view taken by the I-T officer that the revenue confirmed contained in the tax return of Virendra Tandon was not substantial. Nonetheless, a fabric undeniable fact that had been overpassed by the decrease tax authorities is that the actor’s father had on no account acknowledged that he had gifted the quantity in query out of his revenue for the 12 months into consideration, however had in unequivocal phrases acknowledged that the equal was given by him out of his earlier gathered financial monetary financial savings.” The I-T division didn’t affirm whether or not or not or not the gathered financial monetary financial savings had been generated through the years from his revenue on which revenue tax had been paid or had been from any secret gathered funds. Instead, the I-T officer rushed by the evaluation, added the ITAT order. Based mostly completely on the entire thing of the information launched to it, the ITAT bench, comprising accountant member S Rifaur Rahman and judicial member Ravish Sood, talked in regards to the addition of Rs 30 lakh as unexplained money credit score rating ranking was devoid of any revenue.

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