Loading judgment…
Facts
The assessee received cash deposits in her bank account which were claimed as gifts from her parents and husband. The Assessing Officer and CIT(A) rejected this explanation, citing insufficient sources for the gifts.
Held
The Tribunal held that while the capacity of the donors to gift the full amount was implausible given their returned income, the explanation could not be entirely disregarded as the gifts were confirmed. The addition was restricted to 50% of the total cash deposits.
Key Issues
Whether cash deposits in the bank account, claimed as gifts, are to be treated as income of the assessee if the donors' capacity to gift is questionable?
Sections Cited
69A, 147, 148, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”, DELHI
Before: SHRI VIKAS AWASTHY
(A.Y.2018-19) Ruchika Jain, CU-165, Pitampura, New Delhi 110040 ...... अपीलाथ�/Appellant PAN: AFCPJ-8385-E बनाम Vs. Income Tax Officer, Ward 43(6), ..... �ितवादी/Respondent Delhi अपीलाथ� �ारा/ Appellant by : Shri Ruchesh Sinha & Ms. Monalisa, Advocates �ितवादी�ारा/Respondent by : Shri Sanjay Kumar, Sr. DR सुनवाई क� ितिथ/ Date of hearing : 15/01/2025 घोषणा क� ितिथ/ Date of pronouncement : : 11/04/2025 आदेश/ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 29.12.2023, for assessment year 2018-19.
The limited issued in this appeal is with regard to addition of Rs.14,11,500/- u/s. 69A of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) on account of cash deposits in bank account of the assessee.
Shri Ruchesh Sinha, appearing on behalf of the assessee submits that the cash deposits in the bank of the assessee are from gifts received by the asseseee from her parents and husband as under:-
(AY 2018-19) Name Relationship Amount Santosh Jain Mother Rs.5,00,000/- Vivek Jain Husband Rs.4,80,000/- Ramesh Jain Father Rs.5,00,000/- Rs.14,80,000/- The ld. Counsel further submits that the gifts made by parents and husband of the assessee are from their respective personal savingsof the past. The Assessing Officer (AO) and the CIT(A) have rejected the assessee’s contention without appreciating the fact that aforesaid relations of the assessee have confirmed the gifts.
Per contra, Shri Sanjay Kumar representing the department vehemently defended the impugned order. The ld. DR submits that the assessee has placed on record return of income of her father and husband. The gifts made by father and husband are much more than the income returned by them in their respective returns. Whereas, no return of income of mother of the assessee was filed. The relatives making alleged gifts have meager sources, therefore, the explanation furnished by the assessee was not accepted by the AO as well as the CIT(A).
Both sides heard, orders of the authorities below examined. The AO and the CIT(A) have rejected the assessee’s explanation regarding the source of cash deposits. Shri Ramesh Jain, the father of the assessee, filed a return of income for AY 2018-19, disclosing an income of Rs. 3,76,240/-, while the husband of the assessee, Shri Vivek Jain, returned income of Rs. 3,15,800/- for the AY 2018-19. However, return of income of mother of the assessee is not available on record. The assessee contends that the gifts were from the past savings of her parents and (AY 2018-19) husband. Considering the returned income of the husband and father for AY 2018- 19, it is evident that capacity to make gift to the extent claimed by assessee is implausible. However, the explanation furnished by the assessee cannot be entirely brushed aside since parents of assessee and husband of assessee have confirmed the gifts. The possibility of such gifts from accumulated savings cannot be ruled out, completely. Taking into account entire facts of the case, and keeping in view the financial condition of the donors as per the documents on record, the addition is restricted to 50% of the total cash deposits. Thus, the assessee gets the relief of Rs.7,05,750/-.