🏠 Section 69A Inapplicable to Immovable Property: ITAT Deletes Addition on Gifted Property

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Rajkot ITAT Rules in Favor of Assessee on Property Received as Gift from Husband.

In a vital clarification regarding the scope of "Unexplained Money," the Rajkot ITAT has ruled that Section 69A of the Income-tax Act does not extend to immovable property. The Tribunal further held that once the ownership of a donor is established via registered deeds and the relationship is proved, the onus on the assessee stands fully discharged.

The Core Dispute: Gift from Husband

The case involved an individual assessee who received an immovable property as a gift from her husband. The Revenue challenged the transaction, leading to an addition under the head of unexplained money. However, the assessee successfully demonstrated the following:

  • Established Ownership: The donor (husband) proved his ownership through registered sale deeds.
  • Financial Disclosure: The property was duly reflected in the donor's balance sheet.
  • Exempt Relationship: Since the gift was from a "relative" (spouse), it falls outside the tax net of Section 56(2)(x).

The Legal Verdict: Section 69A vs. Immovable Property

The Tribunal's decision rested on two primary legal pillars:

1. Definition of Unexplained Money:

The Tribunal observed that Section 69A specifically targets money, bullion, jewelry, or other valuable articles. Crucially, the section does not apply to immovable property. Therefore, treating a gifted flat or land as "unexplained money" is legally unsustainable.

2. Discharge of Onus:

The assessee successfully proved the source, genuineness, relationship, and creditworthiness of the donor. Since the donor's identity and his acquisition of the property were verifiable through registered documents, the addition was liable to be deleted.

Professional Insight: Key Takeaway 💡

This ruling serves as a powerful shield for taxpayers receiving property from family members. It reinforces that the Revenue cannot use Section 69A as a catch-all provision for immovable assets. To ensure a smooth assessment, taxpayers should maintain the donor's registered sale deed and ensure the asset is reflected in the donor's books prior to the gift, as this effectively shifts the burden of proof back to the department.

Case Citation: Dhruti Jaysukhbhai Ranpariya vs. Income-tax Officer [2026] 182 taxmann.com 156 (Rajkot - Trib.).

Statutory Reference: Section 69A of the Income-tax Act, 1961.

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