ITAT Sends Back Rs 12.54 Crore Gift Case of Shilpa Shetty Kundra to Assessing Officer

The Tribunal remanded Shilpa Shetty Kundra’s tax dispute back to the Assessing Officer for fresh verification due to insufficient evidence supporting the claimed gift transaction.

The present case has been filed by Shilpa Shetty Kundra against DCIT in the ITAT, Mumbai, challenging the order dated January 31, 2025, passed by CIT(A) for the assessment year 2020-21.

Background of the Case

Shilpa Shetty had originally declared an income of around Rs 10.84 crore in her tax return. However, during scrutiny, the tax officer noticed a large credit entry shown as a gift. She explained that the amount was gifted by her husband, businessman Raj Kundra, out of “natural love and affection” and submitted a gift deed along with basic details like PAN and tax return acknowledgement.

The AO, however, was not satisfied with the answer. He also questioned the husband’s financial capacity, noting that his declared income for the year was only about Rs 27.7 lakh, far lower than the claimed gift amount. According to the AO, no bank statements were submitted to prove the actual transfer of money. As a result, he treated the entire amount as unexplained income under Section 68 and taxed it accordingly.

Being aggrieved by this decision, the actress further approached CIT-(A). However, it agreed with the AO, stating that merely providing a gift deed and PAN details is not enough.

ITAT’s Ruling

The actress then further approached ITAT. During the hearing, the actress’s lawyers argued that she had enough documents to establish the identity of the donor.

However, the tribunal noted that the gift deed did not specify how the money was transferred. Even the bank statement later submitted showed no clear trace of the gift transaction. There were also inconsistencies regarding foreign investments and funds allegedly received from an overseas entity linked to the husband.

The tribunal stated that the matter was not properly verified and required detailed examination. As a result, it sent the case back to the jurisdictional assessing officer for a fresh decision.

The tribunal also directed the actress to provide complete details, including clear banking evidence and an explanation of the source of funds. It also warned that failure to cooperate in the fresh proceedings may lead to adverse consequences.

As a result, the appeal was allowed only for statistical purposes.