2024 (1) TMI 311 - AT - Income Tax

Cash deposits during demonetization period u/s 69A - as per assessee amount gifted by father and mother - whether assessee s parents have sufficient sources to gift the amount? - HELD THAT - As it is apparent from the ITR filed by the assessee and the evidences furnished before us in the form of ITRs, computations of income, balance sheets, profit and loss accounts explaining the creditworthiness of the donors and the gift given on the occasion of marriage of the assessee out of natural love and affection. Assessee has sufficient sources of cash which was deposited into bank during demonetization period. We note that the assessee got married on 10.03.2016 and immediately after marriage she left her parental house in Raiganj to stay with her in-laws. Money was kept only with parents and the same was deposited into the bank by the parents of the assessee. So far as the gift of grand parent is concerned we are quite convinced that the family has financial worth to gift on the occasion of the grand daughter as the documents could not be furnished as the grand parent has since expired. We have also perused and considered written submission filed by the DR on 7.12.2023 after conclusion of hearing despite there being no direction to that effect and also the reply of the assessee dated 11.12.2023 thereto while arriving at the above conclusion. In view of the above facts and circumstances, we are inclined to set aside the order of CIT(A) and direct the AO to delete the addition. Decided in favour of assessee.

Summary

Issues: Appeal against addition of cash deposits during demonetization period under section 69A of the Income Tax Act for Assessment Year 2017-18.

Summary:
The appellant contested the addition of Rs. 17,48,000 as cash deposits during the demonetization period, challenging the Ld. CIT(A)'s confirmation of the same. The AO found the appellant deposited the amount in a bank account during the specified period and issued a show cause notice for unexplained cash credit. The Ld. CIT(A) upheld the AO's decision.

Upon review, it was noted that the appellant, situated in a remote area, received marriage gifts totaling Rs. 15,00,000 from family members, supported by gift deeds, ITRs, and balance sheets. The donors' financial capabilities were verified through their tax assessments. The appellant also disclosed an opening cash balance and transactions during the relevant period. The Tribunal found the sources of cash deposits were genuine, considering the marriage context and family financial standings. Despite the absence of evidence from the deceased grandparent, the Tribunal concluded in favor of the appellant.

The Tribunal set aside the Ld. CIT(A)'s order and directed the AO to delete the addition, ruling in favor of the appellant. The appeal was allowed, and the decision was pronounced on 5th January 2024.