Smt. Karina Kunjana Kapoor Vs DCIT (ITAT Delhi)
Addition u/s 69A sustainable for not providing satisfactory explanation of source of heavy denomination cash gifts
ITAT Delhi held that addition under section 69A of the Income Tax Act sustainable on failure to provide reasonable explanation of the sources and justification of heavy denomination cash gifts.
Facts- During the year under consideration the assessee deposited cash total amounting to Rs. 3,50,000/- around in her bank account. In this respect, the appellant claimed that the source of the cash deposited in her bank account was on account of gifts received from various relatives, family members on different occasions like Birthday, Raksha Bandhan, Diwali, Milestones achievements etc. It was claimed that as per section 56 of the Act, gift received from the family members, relatives do not come under the purview of Income Tax and are exempt for the Tax.
However, the Learned AO considered the plea to be after thought and considered the cash deposited as unexplained cash.
Conclusion- However, when an assessee deposits these collected amounts of cash gifts in bank, and thus creates a capital or investment out of these cash gifts, the assessee is expected under law to offer a reasonable explanation of the sources and justification of the occasions and the relationships, to have received heavy denomination cash gifts or beyond threshold limits. Further that under what circumstances these cash gift amount got accumulated over the period, so as to be deposited a lump sum, in particular FY.
In the case in hand there is nothing factual or substantial to disagree with the reasons of Ld. CIT(A). The burden was on assessee to give ‘satisfactory explanation’ for the purpose of Section 69A of the Act. Assessee certainly failed to bring forth evidence sufficient discharge that burden. So the Ld. CIT(A) was justified to sustain the addition.
FULL TEXT OF THE ORDER OF ITAT DELHI
The appeal has been filed by the Assessee against order dated 11.01.2021 passed in appeal no. 10293/2018-19 for assessment year 2015-16, by the Commissioner of Income Tax (Appeals)-26, New Delhi (hereinafter referred to as the First Appellate Authority or in short ‘Ld. F.A.A.’) in regard to the appeal before it arising out of assessment order dated 31.12.2018 u/s 153A/143(3) of I.T. Act, 1961 (hereinafter referred to as ‘the Act’) passed by ACIT, Central Circle-16, New Delhi (hereinafter referred as Ld. Assessing officer or in short Ld. AO).
2. The facts of the case a search and seizure operation was carried out on Deepak Talwar Group on 22.06.2016 and the case of appellant was also covered under search. Accordingly, the case of Appellant for the above Assessment Year was taken up for search and seizure assessment under Section 153A r.w.s. 143(3) and subsequently a notice under section 142(1) of the Income Tax Act, 1961 was issued to the Appellant. The appellant filed her return of income for the A.Y. 2015-16 on 06.12.2018 declaring total income of Rs. l,52,780/-whereas the assessment has been framed at an income of Rs. 39,52,780/-. The Ld. AO has made following additions:
