ITAT Mumbai Asks Shilpa Shetty To Prove ₹12.54 Crore Gift From Husband, Remands Case To Assessing Officer

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has recently asked actor Shilpa Shetty Kundra to submit “complete details/clarifications and documents” to justify a Rs 12.54-crore gift received from her husband Raj Kundra, while remanding the matter to the Jurisdictional Assessing Officer for fresh examination under Section 68 of the Income Tax Act, 1961.

Judicial Member Narender Kumar Choudhry and Accountant Member Prabhash Shankar said the material on record was not sufficient to establish the genuineness of the transaction and required further factual verification. The Bench noted that Shetty had not fully discharged the initial burden placed on her under the Act.

The issue arose in Assessment Year 2020-21. Shetty had declared a total income of Rs 10,84,45,500. During scrutiny, the Assessing Officer noticed a credit entry of Rs 12,54,54,594 shown as a gift and asked for details of the donor, the mode of transfer, and supporting documents.

Shetty replied that the amount had been gifted by her husband, Ripusudan Kundra, out of natural love and affection. She produced a copy of the gift deed, the donor's PAN, and acknowledgment of his income-tax return.

The Assessing Officer found the explanation incomplete. No bank statement was filed to show the actual transfer of funds. The order records that only a scanned gift deed was produced despite repeated opportunities. The donor's PAN, the officer noted, was given at the “fag end” of the proceedings, leaving no time to verify the transaction under Section 133(6) of the Act.

The officer also recorded that the donor had declared income of about Rs 27.7 lakh for the year, which did not match the capacity to make a gift exceeding Rs 12 crore. The amount was therefore treated as unexplained credit under Section 68 and taxed under Section 115BBE of the Act. The Commissioner of Income Tax (Appeals) later upheld the addition.

Before the Tribunal, Shetty argued that she had discharged her primary burden by furnishing the donor's identity, PAN, address, relationship, gift deed, and return acknowledgment. It was contended that the department failed to carry out further enquiry, including issuing summons under Section 131.

The Revenue opposed the plea, pointing out that Shetty never produced bank statements showing the movement of money and failed to explain the mode of payment. According to the department, there was no clear evidence that the gift amount had actually been transferred.

The Tribunal examined the documents on record. The gift deed did not mention the mode of transfer or bank details. Affidavits filed later also did not specify how the money moved.

A joint Punjab National Bank account statement showed a credit entry of about Rs 12.81 crore linked to an entity named “Kuki Investment”. The Bench, however, found no “clear-cut transaction” linking that entry with the specific gift of Rs 12,54,54,594 claimed in the return.

The order also refers to discrepancies in the financial disclosures of Shetty's husband. Figures shown in different schedules of his income-tax returns did not match the explanation given for the source of funds. His declared income, the Tribunal noted, was not commensurate with the amount allegedly gifted.

Recording these findings, the Bench held that Shetty had “and documents but not discharged her prima facie onus cast under Section 68 of the Act completely by filing complete details/clarifications and relevant documents and in the absence of relevant details and documents and clarification, which the Assessee admittedly failed to file/offer, the issue involved also remained to be adjudicated in its right perspective and proper manner” and that the issue required further verification.

The tribunal, therefore, remanded the matter to the jurisdictional assessing officer for fresh adjudication. It directed Shetty to establish the claim by furnishing “complete details/clarifications and documents” and said the case must be decided again after giving her a reasonable opportunity of hearing.

"We also deem it appropriate to direct the Assessee to establish her claim by filing/providing complete details/clarifications and documents before the JAO, without any default. We clarify that in case of subsequent default, the Assessee shall not be entitled for any leniency."

The appeal was allowed for statistical purposes.