The Income Tax Appellate Tribunal (ITAT) ruled that the affidavits from Family Members sufficient to prove genuineness of Cash Gift.
The assessee, Dheeraj Thakran is an individual and derives income from rent, profession and other sources. He filed his return of income declaring taxable income. The case of the assessee was selected for scrutiny and statutory notices u/s 143(2)/142(1) along with the detailed questionnaire were issued and served upon the assessee. The authorized representative of the assessee appeared before the AO and sought adjournment which was granted by the AO. However, there was non-compliance from the side of the assessee subsequently for which the AO proceeded to make assessment u/s 144 of the Act.
The AO noted that the assessee has deposited cash of Rs.32,90,000/- in Oriental Bank of Commerce and Rs.17,50,000/- in Punjab National Bank during the impugned assessment year the details of which are given at para 2 of the assessment order. Since the assessee did not file any reply to explain the source of such cash deposits in the bank account, the AO relying on various decisions, made addition of the same to the total income of the assessee.
The AO reiterated his earlier stand and submitted that the assessee could not explain the source of cash deposits in the bank account and the various gifts received by him from father and mother, brother and wife. The ld.CIT(A) confronted the same to the assessee. The assessee filed a rejoinder to the same and the ld.CIT(A) again called for a remand report from the AO. In his second remand report also, the AO reiterated his earlier stand. After considering the two remand reports of the AO and the rejoinder of the assessee to such remand report, the ld.CIT(A) upheld the various additions made by the AO.
The coram of the Judicial Member, R.K.Panda and Suchitra Kamble noted that During the course of assessment proceedings, the assessee has filed the affidavits of the donors who are parents, brother and spouse, respectively. They are not outsiders or unknown persons. No independent inquiry whatsoever was conducted by the AO either u/s 133 (6) or 131(1) of the Act.
The ITAT observed that Since the gifts in the instant case are received from parents, brother and spouse, respectively and the father has withdrawn substantial cash amount from the bank before giving the gift of Rs.5,75,000/- on various dates to his son and the gifts of Rs.1,50,000/- from brother, Rs.1 lakh from mother and Rs.1 lakh from spouse are not huge amounts, therefore, doubting the genuineness of such gifts received from blood relations is not justified.
The Tribunal accepted the source of Rs.9,25,000/- deposited in the bank to be out of gifts.
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