2024 (8) TMI 1015 - AT - Income Tax

Unexplained investment u/s. 69 - case was selected for scrutiny under CASS to verify the cash deposits made during the demonetisation period - assessee stated that the said the assessee got married on 15/05/2015 and the cash deposited during the demonetisation period are from the cash gifts received during the marriage ceremony and post marriage ceremony. HELD THAT - The assessee has deposited Rs. 5,45,000/- to her bank account during the demonetisation period. Further, she got married on 15/05/2015 and stated that the source for the deposit of cash was gifts received during the Marriage function from the relatives, friends and well wishers. Since, the amount of deposit made to bank account and the gift received by the assessee on occasion of the marriage is a reasonable and by following the decision of the tribunal relied by the assessee we are inclined to delete the addition of Rs. 5,45,000/- made by the AO u/s. 69 of the Act as unexplained by allowing the ground the appeal of the assessee.

Summary

Issues:
1. Addition of Rs. 5,45,000 as unexplained investment u/s. 69 of the Act.
2. Dismissal of appeal by CIT(A) upholding the addition made by AO.

Analysis:
The appeal was filed against the order passed by the Addl/JCIT(A)-3, Bengaluru, for the assessment year 2017-18, challenging the addition of Rs. 5,45,000 as unexplained investment u/s. 69 of the Act. The assessee, an individual, declared a total income of Rs. 58,450 for the AY 2017-18. The AO made the addition based on cash deposits during the demonetization period, stating lack of evidence to support the claim that the cash was received as gifts during the marriage. The CIT(A) confirmed the addition, leading to the appeal before the ITAT Chennai.

During the appeal hearing, the assessee's representative argued that the cash deposits were from cash gifts received during the marriage ceremony and post-marriage. The representative also presented the marriage certificate as evidence. Relying on a previous Tribunal decision, the representative requested the deletion of the addition. The Tribunal decision cited emphasized the social and cultural factors in Indian society regarding gifts received during marriages.

The Tribunal considered the facts presented, noting the marriage date and the claim of cash gifts received. Given the reasonable explanation provided by the assessee and the precedent set by the previous Tribunal decision, the ITAT Chennai decided to delete the addition of Rs. 5,45,000 as unexplained investment, thereby allowing the appeal of the assessee.

In conclusion, the ITAT Chennai allowed the appeal, overturning the addition made by the AO under section 69 of the Act. The decision was based on the assessee's explanation regarding the source of cash deposits as gifts received during the marriage, supported by the marriage certificate and the cultural context of gift-giving in Indian society.