Selvaraj Amirtharaj Vs ITO (ITAT Chennai)
The Chennai Bench of the Income Tax Appellate Tribunal has held that where an assessee furnishes gift deeds, confirmations, income-tax returns and financial statements of the donors, and the donors themselves respond to notices issued under Section 133(6) confirming the gifts, the addition cannot be sustained merely because the Assessing Officer considers the donors’ returned income inadequate in comparison with the amounts gifted. Once the assessee discharges the initial burden under Section 68, the Revenue must rebut the evidence by bringing positive material on record. Suspicion regarding the source available with the donors cannot substitute legal evidence.
The assessee, an individual, filed his return of income for Assessment Year 2017-18 declaring a total income of Rs.43,21,490. During scrutiny proceedings, the Assessing Officer noticed substantial cash deposits in the assessee’s bank account and called upon him to explain their source.
The assessee explained that part of the deposits represented cash gifts aggregating to Rs.85,30,000 received from five close relatives. The gifts comprised Rs.8.70 lakh from his maternal uncle, Rs.29 lakh from his wife, Rs.9.30 lakh each from two paternal uncles and Rs.29 lakh from his sister’s husband. The assessee produced gift deeds, confirmations, copies of the donors’ income-tax returns, statements of account and financial statements. All five donors were regularly assessed to tax and the gifts were also recorded in their respective financial statements.
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