Rupam Dubey Vs ITO (ITAT Delhi)
Delhi ITAT held that Rs. 3.5 lakh received by the assessee as a gift from her daughter was fully explained and not liable to be added as unexplained cash under Section 68. The ruling clarifies that genuine gifts with proper documentation cannot be taxed arbitrarily.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, in the case of Rupam Dubey Vs. ITO, deleted an addition of ₹3,50,000 made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, thereby accepting the sum, which was a gift from the assessee’s daughter, as genuine. The case originated when the AO reopened the assessment after noting a large cash deposit in the assessee’s bank account. The assessee, a teacher, explained that the amount was a gift from her adult daughter for the purchase of immovable property, providing documentation including bank statements and a gift declaration. The AO and the Commissioner of Income Tax (Appeals) (CIT(A)), however, deemed the transaction an unexplained cash credit, questioning the daughter’s financial creditworthiness to make the gift. They noted the daughter’s low bank balance before the deposit and the composition of the cash deposits (including demonetised currency denominations) as grounds for suspicion, concluding that the assessee was more financially sound than the donor.
