The Hyderabad bench of the Income Tax Appellate Tribunal (ITAT) while granting Rupees 10 lakh relief to assessee held that merely filing of the affidavit is not sufficient to prove the capacity and source of the persons who gave money to assessee .
Assesee Sumeet Agarwal, is an individual engaged in the proprietary business of Jewellery manufacturing and selling in the name and style-of Ganesh Narayan Gems and Jewels.
When the assessee traveling to Hyderabad from Jaipur revenue found a sum of rupees 20 lakh carrying by the assessee, Subsequently summon was issued to the assessee and his statement was recorded thereafterunder Section 131 of the Income Tax Act, 1961. His father was summoned. He confirmed that the cash belonged to him, but failed to explain the sources with supporting evidence.
Further, the department issued a warrant under Section 132A of the Income Tax Act was executed and the unaccounted cash of Rs.20,00,000/- was seized.
Thereafter, notices under Section 142(1)/ 143(2) of the Income Tax Act were issued and duly served to the assessee assessee had submitted that the amount of Rs.20,00,000/- was received as cash gift from his grandparents and others on the occasion of his marriage and had filed an affidavit.
After perusal of the material available on record, finally, the Assessing Officer had completed assessment interalia by making an addition of Rs.20 lakhs to the income returned and brought to tax.
Feeling aggrieved with the order of Assessing Officer, assessee filed an appeal before the CIT (A) who dismissed the appeal of assessee.Then the assessee filed second appeal before the Tribunal.
Sashank Dunu, counsel for the assessee submitted that the cash was given by the grandparents of the assessee during their life time to the assessee’s uncle Satish Kumar Agarwal for handing over the same to the assessee at the time of marriage.Further the counsel contended that the cash was gift as per section 56 of the Income Tax Act.
Waseem UR Rehman Counsel for the revenue submitted that assessee failed to disclose the necessary details of persons, who gave money to him like names, PAN, address etc. at the time of marriage.
Moreover, the assessee had taken contrary stands during the recording of statement under Section 131 Income Tax Act 1961 and during assessment proceedings and appellate proceedings.
The tribunal while considering the contention observed that the assessee has not provided the details of persons who had given the cash gifts.
Also, the bench completely expressed complete disbelief in the contention that the cash gifts were normally not given on the occasion of marriage.
Further the bench points out that merely filing of the affidavit is not sufficient to prove the capacity and source of the persons who have given money to the assessee .
Thereafter the single bench of Laliet Kumar, (Judicial Member) observed,considering the status of the assessee, who is an income tax assessee and status of his grandparents, that, it is very obvious and natural to receive gifts at the time of marriage from the relatives and friends. The assessee is entitled to some relief restriction and the assessee gets relief of Rs.10 lakhs and the remaining amount of Rs.10 lakhs is confirmed.
Finally, the bench partly allowed the appeal of the assessee.
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