Introduction
In a recent appeal, the taxpayer contested an order dated 03.03.2023, issued by the Ld. NFAC, New Delhi, pertaining to the Assessment Year 2017-18. The crux of the matter revolved around the addition of Rs. 12,72,500, representing a cash gift received by the taxpayer during her marriage. The appeal was based on several grounds challenging the decision to treat this amount as income under section 69A with section 115BBE of the Income Tax Act.
Grounds of Appeal
The taxpayer raised multiple grounds for contesting the addition:
- Disputed Taxability: The taxpayer argued that the cash gift received during her marriage should not be considered income under section 69A and section 115BBE of the Income Tax Act.
- Lack of Justification for Addition: It was contended that the addition lacked any basis, considering the evidence provided and the collaborative support for the source of the gifted amount.
- Treatment of Gift as Income/Expenditure: The taxpayer asserted that the gift amount, deposited in the bank, should not be treated as income/expenditure when determining taxable income.
- Allegations of Extraneous Considerations: The taxpayer claimed that the revenue relied on extraneous considerations, neglecting the substantial evidence and reasoning presented in support of her case.
- Section 56(2) (vi)(a) of I.T. Act: The taxpayer invoked section 56(2)(vi)(a) of the Income Tax Act, arguing that the amount in question should not be subject to taxation.
- Source and Purpose of Gift: The taxpayer emphasized that detailed records existed regarding the source, purpose, and utilization of the gifted amount, demonstrating that it should not be classified as taxable income.
Contentions by the Learned Counsel
The counsel for the assessee argued vehemently against the addition, presenting the following key points:
- Submission of Collaborative Evidence: The counsel highlighted that the taxpayer had submitted comprehensive evidence to establish that the cash deposit in her bank account was a gift received during her marriage.
- Identification of Gift Sources: The counsel provided a breakdown of the sources of the gifted amount, including contributions from the father, brother, and relatives from both sides of the marriage.
- Documentation of Mother-in-law’s Contribution: The counsel explained that a portion of the amount was received from the mother-in-law during the grah pravesh, duly reflected in the income tax return of the mother-in-law.
- Tuition Income as a Source: The counsel argued that the remaining portion of the cash deposit was covered by the taxpayer’s declared income from tuition and past savings.
Response by the Senior DR
The Senior DR supported the decisions of the authorities below, without presenting substantial arguments against the contentions raised by the taxpayer.
Judicial Analysis and Conclusion
The learned authority critically examined the evidence presented and arrived at the conclusion that the taxpayer successfully demonstrated the legitimate source of the cash deposit. Emphasizing the logical evaluation of the explanations and documentary evidence, the authority concluded that no addition, either under section 69A or any other provision of the Act, was warranted. In view of foregoing discussion, I reach to a final conclusion that in the totality of facts and circumstances of present case and on logical evaluation of explanation and documentary evidence of assessee, I am compelled to hold that the assessee has successfully demonstrated and established source of cash deposit of Rs. 12,72,500/- and hence no addition either u/s. 69A or any other provision of Act is required to be made in the hands of assessee. Accordingly, sole grievance of assessee is allowed and Assessing Officer is directed to delete the addition.
Final Verdict
On 06.07.2023, the authority pronounced the decision in favor of the taxpayer, allowing the appeal and directing the Assessing Officer to delete the addition. This victory signifies the importance of presenting comprehensive evidence and logical explanations to counter unwarranted tax assessments, ensuring a fair and just resolution in taxation matters.
Kirti Garg vs ITO, Ward-2(1)(3), Ghaziabad, UP 201002 ITA No. 973/Del/2023 Assessment Year: 2017-18
