The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT), while re-directing adjudication of an income tax appeal observed that the burden to prove that the large volume of cash deposit as a gift to a grandson during the demonetisation is not suspicious shall lies on the assessee.
The assessee, Pitchi Reddy Garlapati, was an individual and at relevant point of time he was deriving income by way of salary due to employment in Singareni Collieries. He filed his return of income for the assessment year 2017-18. It was found that there was a large volume of cash deposit during the demonetization period as compared to returned income. The Assessing Officer, therefore, issued notice under Section 143(2) of the Income Tax Act through ITBA.
According to the Assessing Officer, assessee did not respond to any of the notices issued subsequently, and, therefore, the deposit was treated as ‘unexplained money’ by the Assessing Officer and added back to the income of the assessee.
Aggrieved by such an addition, assessee before the Commissioner of Income Tax Act (CIT(A)) and contended that on the eve of birthday of his grandson, the maternal grandfather of the boy wanted to give a gift of Rs. 9 lakhs and he delivered the same by way of cash to the assessee, which was deposited in the bank account. It appeared from the impugned order that the assessee also submitted the confirmation letter from the maternal grandfather of the boy along with his bank account
S. Phanindra, on behalf of the assessee submitted that the maternal grandfather of the boy was a man of means, doing business and, therefore, there was nothing unusual or suspicious for such a man to part with a sum of Rs. 9 lakhs. He further explained that it was not uncommon for the businessman.
Suresh Anubham, on behalf of the revenue submitted that it was doubtful that a business man keeping lakhs idle only to be given in gift to the boy, to be born five months later on. He further argued that the contention was a fabricated story by the assessee and far from the truth and could not be believed.
A Single Bench of K. Narasimha Chary, (Judicial Member) allowed the appeal filed it reasonable for the learned CIT(A) to entertain a doubt as to whether there was an occasion for Mr. Aleti Sanjeeva Reddy to possess that much of cash with him because it is unlikely that the same amount of Rs. 8 lakhs that was withdrawn six months earlier was kept idle without turning it in the business. However, no liability could be fastened on the likelihood or otherwise. Such a thing falls in the realm of verification of fact.
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