2020 (10) TMI 874 - AT - Income Tax

Unexplained deposits - genuineness of gift received by the father from his daughter - plea of the assessee that the said amount was received by the assessee through cheque from his daughter as gift which was received to her from her mother-in-law through banking channel out of amount of the accident claim of daughter's first husband - HELD THAT - As per the provisions of section 56 the father and daughter comes in the definition of relatives and there is no bar for giving or taking gift inter se by them. The amount has been transferred to the account of the assessee from bank account of the daughter of the assessee - Also not been disputed that the daughter of the assessee namely Dr. Richa has been settled at USA, therefore, the assessee could not produce her before the AO - assessee has further explained the source of the donor also that the said amount was received by his daughter from her mother-in-law on account of accident claim of her former husband. No justification on the part of the CIT(A) to disbelieve the claim of the assessee on the basis that the daughter of the assessee has also gifted some money to her mother also - It is to be seen in the assessment of the income of the wife of the assessee but that fact has no relevancy so far as the facts of the present case are concerned. The claim of the assessee has been denied by the CIT(A) merely on the basis of assumption, which, in our view, is not justified. Assessee has duly proved the source of deposit which admittedly has been transferred in to the account of the assessee though banking channel from the account of his daughter. No merit in the order of the CIT(A) and the same is accordingly set aside and the impugned additions stand deleted. - Appeal of the assessee stands allowed

Summary

Issues:
1. Addition of unexplained deposit in the income of the assessee
2. Rejection of explanation regarding the source of the deposit
3. Consideration of additional evidence by the ITAT

Analysis:
1. The appeal was filed against the addition of ?1 lac as an unexplained deposit in the income of the assessee. The assessee claimed that the amount was received as a gift from his daughter, who had received it from her mother-in-law as part of an accident claim. The Assessing Officer treated the amount as unaccounted income as the daughter could not be produced for a statement. The CIT(A) upheld this decision, stating that fathers do not usually accept gifts from daughters.

2. The ITAT considered the plea and additional evidence presented by the appellant. The appellant provided evidence that the daughter was settled in the USA and that the amount was received through banking channels. The ITAT noted that as per the Income Tax Act, there is no restriction on gifts between relatives. The CIT(A) had based the decision on an assumption that a father would not accept a gift from his daughter, which the ITAT deemed unjustified. The ITAT found that the source of the deposit was adequately proven and that the CIT(A)'s decision was based on an unwarranted assumption.

3. The ITAT rejected the CIT(A)'s decision and set aside the addition to the income of the assessee. The ITAT emphasized that the daughter's gift to her mother was not relevant to the present case. The ITAT concluded that the assessee had satisfactorily proven the source of the deposit, which was transferred through banking channels. Therefore, the appeal of the assessee was allowed, and the impugned additions were deleted.