Student cannot be Taxed for Temporary Family Deposits made to Show Financial Capacity Abroad: ITAT [Read Order]
The Bench found that the sources were identifiable, the transactions were temporary in nature, and the amounts were repaid to the respective family members within weeks.
![Student cannot be Taxed for Temporary Family Deposits made to Show Financial Capacity Abroad: ITAT [Read Order]](https://images.taxscan.in/h-upload/2026/01/31/2122773-student-cannot-be-taxed-for-temporary-family-deposits-made-to-show-financial-capacity-abroad-itat-taxscan.webp "Student cannot be Taxed for Temporary Family Deposits made to Show Financial Capacity Abroad: ITAT [Read Order]")
The Income Tax Appellate Tribunal ( ITAT), Surat Bench has held that a student cannot be taxed under the Income-tax Act for temporary cash deposits made by family members in his bank account solely to show financial capacity for pursuing studies abroad. The matter is of Bhaveshbharthi Ghanshyambharthi Goswami for the Assessment Year 2010-11. The assessing officer after noticing...
The Income Tax Appellate Tribunal ( ITAT), Surat Bench has held that a student cannot be taxed under the Income-tax Act for temporary cash deposits made by family members in his bank account solely to show financial capacity for pursuing studies abroad.
The matter is of Bhaveshbharthi Ghanshyambharthi Goswami for the Assessment Year 2010-11. The assessing officer after noticing cash deposits aggregating to ₹11,40,010 in the assessee’s savings account, reopened the assessment.
The assessee, a student at the relevant time with nominal income from tuition activities, explained that the deposits were temporarily made by his parents and close relatives to meet visa requirements and were subsequently withdrawn and returned within a short span.
Despite the explanation, the addition was confirmed by the first appellate authority.
The Tribunal noted that it was undisputed that the assessee was a student, did not maintain books of account, and that the addition under Section 68 was made solely on the basis of bank entries.
The details of deposits and withdrawals were examined. After that, the Bench found that the sources were identifiable, the transactions were temporary in nature, and the amounts were repaid to the respective family members within weeks.
Also, the Revenue failed to bring any material on record to disprove the genuineness of these transactions or to establish that the deposits constituted the income of the assessee.
Therefore the bench of Suchitra Kamble (Judicial member) and Dr. B.R. R. Kumar (Vice president) allowing the appeal, deleted the addition of Rs. 11.40 lakh made under Section 68 of the Income-tax Act, 1961, treating the deposits as unexplained cash credits.
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