The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) has deleted an addition under section 69A of the Income Tax Act, 1961 where the assessee received cash including the demonetized currencies as gift during marriage.
The assessee, Smt Porkodi was aggrieved by the order wherein the AO noticed that the assessee has deposited a sum of Rs.18 lakhs to bank account during demonetization period. During the proceedings, the assessee explained that a sum of Rs.7.5 lakhs cash deposits is made out of her own savings. Further, a sum of Rs.4.5 lakhs has been received as marriage gift from her brother for daughter’s marriage. She also explained a sum of Rs.8 lakhs received as lease advance for property in the name of her daughter.
However, the AO rejected the gift received from her brothers amounting to Rs.4.5 lakhs on the occasion of marriage of her daughter on the ground that the donor has not confirmed the gift.
On appeal, the first appellate authority also confirmed the said order.
Shri V. Durga Rao, Judicial Member and Shri G. Manjunatha, Accountant Member observed that the assessee claims to have received a sum of Rs.4 lakhs as marriage gift on the occasion of her daughter’s marriage.
Noting the fact that the assessee has filed list of donors as per which, the assessee claims to have received marriage gift from about 400 persons, the Two-Member Tribunal held that“Except a statement, the assessee could not file complete address and other particulars of donors. Therefore, it is difficult to accept the claim of the assessee that she had received Rs.4 lakhs marriage gift on the occasion of her daughter’s marriage. However, fact remains that it is a customary in India that during marriages guests and relatives will give gift depending upon their social status and economic condition. Therefore, we cannot fully ruled out the claim of marriage gift received by the assessee on the occasion of her daughter’s marriage.”
“Therefore, considering the fact that there is a custom in India to give and receive marriage gifts, we are of theconsidered view that the assessee can be given benefit of a sum of Rs.2 lakhs as marriage gift received on the occasion of her daughter’s marriage. Therefore, we direct the AO to accept source for cash deposits out of marriage gift received amounting to Rs.2 lakhs and delete the addition to that extent made u/s.69A of the Act,” the Tribunal said.
Noting that the claim of marriage gift from her brothers cannot be rejected, the Tribunal held that “it is also a customary in India that during marriages brothers will give some money to their sisters depending upon their social status and economic condition. Therefore, the claim of the assessee that she has received marriage gift from her brothers cannot be totally ruled out. Therefore, considering the facts and also custom prevailing in India, we are of the considered view that a reasonable amount of marriage gift claimed by the assessee, can be allowed. Therefore, we direct the AO to allow source for cash deposits out of marriage gift received from her brothers to the extent of Rs.2 lakhs and delete the addition made u/s.69A of the Income Tax Act, towards cash deposits to the extent of Rs.2 lakhs out of marriage gift received from her brother.”
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