Satinder Govind Oberai Vs ITO (ITAT Mumbai)
Mumbai ITAT Deletes Demonetisation Addition – Marriage Gifts & Past Savings Accepted as Valid Source of Cash Deposits
The ITAT Mumbai deleted the addition of Rs. 6,89,000 made under Section 69A read with Section 115BBE of the Income-tax Act, 1961 in respect of cash deposits made during the demonetisation period. The assessee explained that the deposits comprised marriage gifts received at the time of her marriage on 01.05.2016, past savings, and cash retained at home for the medical needs of her specially-abled step-son and ailing mother-in-law. The Assessing Officer had accepted Rs. 4,51,000 based on confirmations but treated the balance as unexplained, and the CIT(A) upheld the addition. The Tribunal observed that the marriage shortly before demonetisation was undisputed and that receiving and retaining cash gifts for future household or medical contingencies was not uncommon. It further noted that the Revenue had not produced any material to establish that the cash represented income from an undisclosed source or found any evidence of unaccounted business activity or other incriminating material. Holding that the time gap between receipt of gifts and deposit, and the absence of complete documentary evidence alone, were insufficient to invoke Section 69A, the Tribunal found the explanation reasonable and satisfactory and directed deletion of the addition.
The Mumbai Bench of the ITAT deleted an addition of ₹6.89 lakh made u/s 69A in respect of cash deposited during the demonetisation period, holding that the assessee had furnished a reasonable & plausible explanation that the cash represented marriage gifts, past savings & cash retained for medical emergencies. The Tribunal observed that, in the absence of any evidence of undisclosed income, the explanation could not be rejected merely on suspicion.
The assessee, an individual salaried taxpayer, had deposited ₹11.40 lakh in three bank accounts during the demonetisation period. She explained that the deposits were sourced from cash gifts received at the time of her marriage in May 2016, accumulated savings & cash retained at home for the medical needs of her specially-abled step-son & ailing mother-in-law. The AO accepted the explanation to the extent of ₹4.51 lakh based on donor confirmations but treated the balance ₹6.89 lakh as unexplained money taxable u/s 69A r.w.s. 115BBE. The CIT(A) confirmed the addition.
Before the Tribunal, the assessee contended that it is customary in Indian society for a bride to receive cash gifts from relatives on the occasion of marriage & to retain such cash for future household or medical contingencies. It was also submitted that the cash was intentionally kept at home to meet possible medical emergencies concerning her family members & was deposited only because of demonetisation.
Accepting the contention, the Tribunal observed that the assessee’s marriage just a few months before demonetisation was an undisputed fact. It further noted that the Revenue had not brought any material on record to establish that the impugned cash represented income from an undisclosed source or that the assessee had carried on any unaccounted business activity. The addition had been sustained mainly because complete documentary evidence for the entire amount was unavailable & there was a time gap between the marriage & the cash deposits. The Tribunal held that these circumstances, by themselves, were insufficient to invoke u/s 69A.
The Tribunal further held that mere retention of cash for a few months before its deposit due to demonetisation does not render the explanation unbelievable. Considering the surrounding circumstances & Indian social customs, it concluded that the assessee had furnished a satisfactory explanation regarding the source of the cash deposits. Accordingly, the addition of ₹6.89 lakh made u/s 69A & taxed u/s 115BBE was deleted & the appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
tice was issued and assessee explained that the cash was deposited from the source of marriage gift amounting to Rs.4,68,000/-. The assessee was working woman and had earned income from salary and received gift from her relatives in the Financial Year 2016-17 related to AY 2017-18 from her marriage which was solemnized on 01.05.2016 and have received the gift from close relatives. She has past savings, her husband had a son from his previous marriage who is special child and had specially-abled for which the cash is required to be kept in home for urgency for treatment of her son and ailing mother in law who was alive during the FY 2016-17. The cash was deposited during the demonetization period. During the assessment proceedings the assessee was explained and submitted the confirmation related to the cash deposit amount to Rs.4,51,000/-. The assessee was unable to explain the source of gift. So the balance amount Rs.6,89,000/-(Rs.11,40,000 – Rs.4,51,000) was added back with the total income of the assessee u/sec. 69A r.w.s. 115BBE of the Act. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) after due considering the assessee’s submission, had taken the following observations. The observations of the Ld. CIT(A) contended in following paragraphs which are reproduced as below:
“5.1 Ground 1 of the appeal is related to “the learned assessing officer is erred in law in treating the cash deposited in the saving account as unexplained money, u/s 69A of the income tax act 1961, the amount of cash deposited is out of gift received on the occasion of marriage and the past saving accumulated over a period of time.
5.1.1 I have carefully considered the assessment order, grounds of appeal, statement of facts, and the written submissions filed by the appellant along with the material placed on record. The sole issue for adjudication in the present appeal is whether the Assessing Officer was justified in treating the cash deposits made during the demonetization period as unexplained money under section 69A of the Income-tax Act, 1961.
5.1.2 The appellant has contended that the source of cash deposits was marriage gifts received in May-2016 and past savings accumulated over several years. However, the explanation offered by the appellant is not supported by cogent and reliable evidence. Although a list of alleged donors has been furnished, confirmations of an amount Rs.4,38,100/- from all donors were not produced and no contemporaneous documentary evidence such as gift receipts, withdrawal pattern of donors, or occasion-wise details were placed on record to establish the genuineness of the gifts.
5.1.3 Further, the Assessing Officer has rightly observed that there exists a substantial time gap between the alleged receipt of marriage gifts in May 2016 and the cash deposits made during the demonetization period in November–December 2016. The appellant has failed to substantiate, with credible evidence that such cash was retained intact for several months and was available for deposit.
5.1.4 Most importantly, from the assessment order, it is noticed that the appellant had made withdrawals from her bank account during earlier years. If the appellant was already in possession of sufficient cash, as claimed, there was no necessity for making such withdrawals from the bank account. This fact materially weakens the appellant’s contention of availability of large cash balances as past savings and streedhan. The pattern of withdrawals and deposits does not corroborate the explanation furnished and instead raises serious doubts regarding the source of cash deposited.
5.1.5 The explanation regarding demonetization compelling the deposit of cash is also not acceptable in the absence of satisfactory proof of availability of cash as on 08.11.2016. The burden under section 69A lies squarely upon the appellant to prove the nature and source of money found credited, which has not been discharged satisfactorily in the present case.
5.1.6 It is also pertinent to note that the Assessing Officer has already granted partial relief by accepting Rs.4,51,000/- [11,40,000-6,89,000] as explained, after giving due consideration to the appellant’s submissions. The balance amount of Rs.6,89,000 has been added only after detailed examination and for want of satisfactory explanation and supporting evidence.
5.1.7 In view of the above facts and circumstances, I find no infirmity in the action of the Assessing Officer in making the addition of Rs.6,89,000/- under section 69A of the Act and taxing the same under section 115BBE. The addition is based on facts, evidence on record, and proper appreciation of law.
5.1.8 Accordingly, the addition of Rs.6,89,000/- made under section 69A of the Act is hereby confirmed. Consequently, the initiation of penalty proceedings is also upheld.”
The Ld. CIT(A) rejected the appeal for the assessee. Being aggrieved assessee filed an appeal before us.
3. The Ld. AR argued and contended that the assessee had accumulated the cash from her husband and also from her marriage gift. The confirmation was duly submitted related to the amount to Rs.4,38,100/- before the Ld. AO which was duly considered and amount was reduced from the total cash deposit in the bank account. But the Ld. AR explained the source of cash deposit related to amount of Rs.6,89,000/-. The assessee accumulated this amount from her marriage which is solemnized on May 2016. The assessee has retained this cash for her disabled son and ailing mother in law for urgent need of cash. Finally, during the demonetization the cash was deposited. The Ld. AR prayed for deleting the addition made by the Ld. AO.
