The Mumbai bench of the Income Tax Appellate Tribunal ITAT while considering a bunch of appeals has held that addition u/s 69B will sustain when the authenticity of the gift received was proven with corroborative evidence.
The assessee derives income from business and profession from interior design and artist for which She filed her return of income declaring a total income of ₹1,51,320/-. Notice issued u/s 153A after search and the assessee filed a return of income at ₹ 2,55,585/-. The Assessing Officer noted that credit in the bank account of the assessee was ₹16,38,128/- for which the assessee failed to explain the source and was added by the Assessing Officer under section 69A of the Act. The AO disallowed 25% of such expenditure claimed by the assessee due to failure to furnish third party documentary evidence.
The appellant contended that she had the source of cash deposit available with her, amounting to ₹ 5,86,163/-and she has deposited ₹ 4,63,500/- in the bank account. The AO questioned the source of jewellery found in the search and the assessee stated that they are the gift received at the time of her marriage.
The revenue stated that the disallowance of the expenditure of ₹44,249/- was confirmed as the assessee agreed to the same adhoc disallowance during assessment proceedings. The assessee also could not dispute that she does not have complete third party evidence concerning the expenses. The CIT(A) accepted the cash deposit to the extent of ₹1,93,674/- being a cash and disbelieved redeposit of cash in the bank account holding that whether that cash was available with her to be deposited in the bank account was not proved. The revenue contended that if the assessee has received these items as gifts from her friends and relatives at the time of marriage, then it must be confirmed by the details of such gift received.
The Tribunal observed that if the Revenue authorities had any evidence to prove the cash withdrawn has been used by the assessee then the subsequent redeposit in cash cannot be denied. Further observed that the availability of cash in the hands of the assessee does not vanish, the revenue had to prove that such cash has already been used by the assessee and the addition of ₹2,69,736/- directed to delete.
The Tribunal comprising Shri Prashant Maharishi, AM and Shri Sandeep Singh Karhail, JMobserved that the claim of the assessee that the Jewellery has been received as a gift from relatives and friends are not substantiated and upholds the orders of CIT(A) in confirming the addition of ₹ 1,867,098/– u/s 69B of the act. The assessee was represented by Shri Jayesh Dadia and the revenue was represented by Shri Shekhar L. Gajbhiye.
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