Veerappan Lakshmanan Vs ACIT (ITAT Chennai)
Chennai ITAT Deletes ₹7 Lakh Addition as Cash Gift from Son Stood Substantiated by Cash Flow and Balance Sheet
The Chennai ITAT deleted the addition of ₹7 lakh made under section 69 towards alleged unexplained cash deposits after finding that the assessee had adequately explained the source of the amount as a gift/advance received from his son. The Tribunal noted that the assessee had furnished a cash flow statement, while the son had also filed a declaration explaining the source of funds, including recoveries from debtors, sale of jewellery, contributions from his wife and father-in-law, and personal savings. Importantly, the son’s balance sheets for the relevant years reflected the outstanding balances, including the ₹7 lakh transaction, and these documents were already available before the Assessing Officer and the CIT(A). Holding that the documentary evidence sufficiently established the genuineness of the transaction, the Tribunal ruled that the confirmation of the addition was unjustified, set aside the CIT(A)’s order, and directed deletion of the addition.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order dated 26.06.2025 passed by the ld. Commissioner of Income Tax (Appeals), Addl/JCIT(A)-1, Nashik for the assessment year 2012-13.
2. The assessee raised eight grounds of appeal amongst which only issue emanates for our consideration is as to whether the ld.CIT(A) is justified in confirming the addition made by the AO on account of unexplained cash deposits u/s. 69 of the Act.
3. At the outset, we note that the assessee received Rs.7,00,000/- from his son which was credited into his current account. We find during the course of assessment proceedings, the cash flow statement was furnished explaining the credit of Rs.7,00,000/- in the name of assessee. Further, assessee’s son also filed declaration explaining the source for advance before the AO stating that the above sum may be treated as gift, which is at page no.14 of the paper book. On perusal of the same, it is noted that the son of the assessee was assessed to tax since AY 2004-05 and having no taxable income, no return of income filed. Further, it was stated that an amount of Rs.7,00,000/- was realized from debtors sale of jewellery amount received from his wife, father-in-law and out of savings. However, the AO as well as the ld.CIT(A) found the said explanation not acceptable. Further, we find the copy of balance sheet at page no.4 of the paper book, which is admittedly before the AOand the ld.CIT(A) showing the amount of assessee’s son to his credit of Rs.5,00,000/- as on 31.03.2011. Further, his sons account shows credit balance of Rs.12,00,000/- as on 31.03.2012, which is inclusive of Rs.7,00,000/- during the year under consideration. Therefore, we find all the particulars were very much available before the AO as well as the ld.CIT(A), considering the said evidences taking into account the facts and circumstances of the case, we find the information relating to Rs.7,00,000/- on account of assessee’s son is reflected in cash flow statement, balance sheet as on 31.03.2011 and statements as on 31.03.2012, therefore, in our opinion, the addition as confirmed by the ld.CIT(A) is not justified and it is deleted. Thus, order of the ld.CIT(A) is set aside and grounds raised by the assessee are allowed.
4. In the result, appeal filed by the assessee is allowed.
Order pronounced on 21st July, 2026 at Chennai.
