2025 (3) TMI 460 - AT - Income Tax

Unexplained cash deposit - assessee failed to justify the source of such cash deposits made by him - assessee explained that the cash deposits were from cash in hand and gifts received from the father including a substantial amount received through cheque HELD THAT - As the father has gifted the assessee Rs.5 lac by way of cheque and rest amount by cash at different intervals such cash gift was questioned by Revenue which is not found to be acceptable as the desire of a father how he would support his son either gifting him lump sum amount or at intervals is his prerogative and cannot be doubted by Revenue in the absence of any negative evidence in support of such finding made. Thus keeping in view this particular aspect of the matter without any cogent reason assigned by the Revenue the addition confirmed by the CIT(A) is found to be not sustainable and thus liable to be quashed. Appeal of the assessee is allowed.

Summary

The appeal before the ITAT Delhi was filed by the assessee against an order related to an assessment under the Income Tax Act for the Assessment Year 2016-17. The assessment involved an addition of Rs.10,00,500 for unexplained cash deposits, which was later reduced to Rs.6,90,000 on appeal. The assessee explained that the cash deposits were from cash in hand and gifts received from the father, including a substantial amount received through cheques. The Tribunal found that the Revenue's questioning of the cash gifts from the father was not justified, as it is within the father's prerogative to gift amounts at intervals. Consequently, the addition was deemed unsustainable and was quashed, leading to the allowance of the assessee's appeal.