Krishna Nand Rai Vs ITO (ITAT Delhi)
ITAT Delhi addressed an appeal filed by Krishna Nand Rai against an NFAC order dated March 15, 2024. The case revolved around the addition of ₹10,80,000 as taxable income based on cash deposits made by the assessee. The assessee, married in February 2011, claimed that the amount comprised gifts of ₹5,00,000 from his father and ₹5,80,000 from his father-in-law. Affidavits from both donors affirmed these gifts, stating that the funds originated from agricultural income. The assessee also presented supporting evidence, including marriage invitation cards, agricultural land ownership proofs, and donor statements. However, the CIT(A) disputed the affidavits on technical grounds, citing discrepancies in the dates on the stamp papers used for affirmations.
The ITAT found the objections to the affidavits unjustified, emphasizing that the supporting documents sufficiently demonstrated the authenticity of the transactions. The tribunal noted that the agricultural income sources were credible, and the authorities had not contested the validity of the accompanying evidence. Concluding that the addition lacked a sustainable basis, the ITAT deleted the ₹10.8 lakh from the taxable income. The decision reinforces the principle that genuine cash gifts from immediate family members, backed by verifiable evidence, are not taxable under the Income Tax Act. This ruling serves as a precedent for similar cases involving familial gifts supported by valid documentation.
