2023 (9) TMI 28 - AT - Income Tax

Unexplained deposit of cash u/s 69A - as submitted that the source of the said sum is gift from relative which is not taxable under section 56 - CIT(A) on the ground that the assessee had failed to produce any supporting materials this regard, confirmed the addition made by AO - HELD THAT - It is claimed that the assessee received gift from father, mother and brother. It is also submitted that father of the assessee is a retired High Court Judge, namely, Justice Subhro Kamal Mukherjee, having PAN and files income tax returns regularly. The brother of the assessee is a Non-Resident Indian settled in U.S.A. and is not assessed to tax in India. Mother of the assessee is not an income tax assessee and she is a housewife. Considering the fact that undisputedly the gifts have been received from relatives as defined u/s 56(2)(vi) no dispute has been raised to the fact that father and brother of the assessee have sufficient source of income. Though, the assessee has not file any documentary evidence in the shape of gift deed, however, the details of the relatives were very much placed before the AO and if he was not satisfied he might have issued notice under the Act for seeking the necessary information. Assessee stated that copies of the income tax return of her father for Assessment Year 2016-17 was placed before the AO requesting him to consider the genuineness of the gift. As considering the fact that the donors either have sufficient source of income or they are senior citizens who have some past accumulated savings and, therefore, considering the same, we find that the genuineness of the said gift is proved and thus inclined to hold in favour of the assessee. We the set-aside the finding of the CIT(A) and delete the addition made u/s 69 of the Act. Accordingly all the effective grounds raised by the assessee stand allowed.

Summary

Issues:
The sole issue in this case is whether the ld. CIT(A) erred in confirming the addition of Rs. 3,61,000/- on account of deposit of cash u/s 69A of the Income Tax Act.

Issue Details:
The assessee, an individual, declared income of Rs. 2,47,640/- for the Assessment Year 2016-17. During assessment proceedings, it was found that the assessee had made a cash deposit of Rs. 3,61,000/- in a bank account. The assessee claimed that the sum was received as a gift from relatives, which is not taxable under section 56 of the Act. However, the assessing officer was not satisfied and made an addition under section 69 of the Act. The ld. CIT(A) confirmed this addition as the assessee failed to produce supporting materials. The Tribunal considered the genuineness of the gift and the sources of the donors, concluding that the addition should be deleted as the gift was proved to be genuine.

Judgment Summary:
The Tribunal noted that the assessee is regularly assessed to tax and has been offering taxable income. The assessee claimed to have received a gift in cash of Rs. 3,61,000/- from relatives as defined under the Act. The father of the assessee, a retired High Court Judge, and the brother, a Non-Resident Indian settled in the U.S.A., were identified as the donors. The Tribunal observed that the donors had sufficient sources of income, and the gifts were received from relatives as defined under the Act. While the assessee did not provide a gift deed, details of the relatives were presented to the assessing officer. The Tribunal found that the genuineness of the gift was proved, setting aside the CIT(A)'s decision and deleting the addition made under section 69 of the Act. Consequently, all grounds raised by the assessee were allowed, and the appeal was deemed successful.

Separate Judgment (if applicable):
No separate judgment was delivered in this case.