Jhutha Ram Vs ITO (ITAT Jaipur)
Summary: The Income Tax Appellate Tribunal (ITAT), Jaipur, in Jhutha Ram Vs ITO, allowed the assessee’s appeal for Assessment Year 2012-13 and directed deletion of an addition of ₹13,04,900 made towards unexplained cash deposits in his bank account. The assessee had not originally filed his income-tax return for the relevant assessment year. Following information concerning an investment of ₹20,23,778 in immovable property and cash deposits of ₹13,04,900, the Assessing Officer reopened the assessment by issuing a notice under Section 148 of the Income-tax Act, 1961, on 29 March 2019. The assessee subsequently filed a return declaring income of ₹2,14,997. In the reassessment proceedings under Sections 143(3) and 147, the Assessing Officer made additions of ₹20,23,778 towards unexplained property investment and ₹13,04,900 towards unexplained cash deposits. On appeal, the Commissioner of Income Tax (Appeals), NFAC, deleted the addition relating to the property purchase but sustained the cash deposit addition after obtaining a remand report.
Before the Tribunal, the assessee explained that his mother had gifted him ₹16 lakh in cash on 2 February 2012 from the proceeds of selling her old gold jewellery. The jewellery had been valued at ₹18,36,230 as on 31 March 2011 by a registered valuer, while 642.300 grams of gold ornaments were subsequently sold for ₹16,10,567. The Assessing Officer had questioned the transaction because the jewellery sale documentation did not separately describe individual ornaments and the sale proceeds had not been deposited into the mother’s bank account. The assessee submitted that recording the aggregate weight rather than item-wise specifications was customary in the old jewellery trade and that the gift was supported by a duly notarised gift deed bearing witnesses’ signatures.
The Tribunal examined the documentary evidence and noted that the gift deed recorded a gift of ₹16 lakh from the assessee’s mother on 2 February 2012. It also recorded that the assessee had deposited an aggregate sum of ₹16,05,000 in his bank account between 4 February 2012 and 31 March 2012. The Bench observed that the mother fell within the definition of a relative under Section 2(41) of the Income-tax Act. Considering the notarised gift deed, the presence of two witnesses and the valuation of jewellery by a registered valuer, the Tribunal held that the gift received from the mother could not be doubted on the grounds adopted by the authorities. Accordingly, the addition of ₹13,04,900 was deleted and the assessee’s appeal was allowed. The decision concerned the evidentiary acceptance of the particular gift transaction and did not separately adjudicate the jurisdictional challenge raised in the grounds of appeal.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
This appeal is filed by the assessee as against the appellate order dated 30.07.2025 passed by Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi, arising out of reassessment order passed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to A.Y. 2012-13.
2. Brief facts of the case are that the assessee is an individual not filed his return of income for the AY 2012-13. As per information received by the department that the assessee had made investment in immovable property for a sum of Rs. 20,23,778/- including payment of stamp duty and registration charges. The assessee has also made cash deposit in his bank account for a sum of Rs. 13,04,900/-. Therefore, the assessment was reopened by issuing notice u/s. 148 of the Act on 29.03.2019. In response, assessee filed return of income on 03.12.2019 admitting income of Rs. 2,14,997/-. After enquiry, the AO made addition of Rs. 20,23,778/- being unexplained investment in property and Rs. 13,04,900/- being unexplained cash deposit and demanded tax thereon.
3. Aggrieved against the reassessment order, the assessee filed the appeal before Ld. CIT(A) who has deleted the addition made on account of purchase of property, however confirmed the addition on account of cash deposit of Rs. 13,04,900/- after calling for a remand report from the AO.
4. Aggrieved against the appellate order, the assessee is in appeal before us raising the following grounds of appeal:-
1. The order passed u/s 143(3)/147 is bad in law and on the facts of the present case for the lack of jurisdiction and other reasons and the ld. CIT(A) erred in not quashing the same and hence the same may please be quashed.
2. Rs. 1304900/- The ld. AO erred in law as well as on the facts of the present case in making the addition on account of unexplained cash deposit and ld. CIT(A) erred in confirming the same and hence, the same is prayed to be deleted.
3. The assessee prays your goodself indulgence to add, amend, modify OR Delete all OR any ground of appeal on Or before the date of hearing.
5. Ld. Counsel appearing on behalf of the assessee submitted that assessee has received cash gift of Rs. 16 lakhs from his mother on 02.02.2012. The source of cash deposit from his mother is on account of sale of old jewellery and the value of this jewellery at Rs. 18,36,230/- as on 31.03.2011 by Registered Valuer. The AO disbelieved the cash gift on the sole ground that the sale of gold ornaments of 642 grams valued at Rs. 16,10,567/- without any specification of the jewellery/item wise and the cash was not deposited in the bank account. Therefore, in the remand report, the AO requested to confirm the addition which was confirmed by the Ld. CIT(A). The Ld. Counsel further submitted that it is customary in the jewellery trade that the sale of old jewellery only total weight shown and no separate specification of items are given in the invoice. The other contention of the AO is that the weight of jewellery sold is much less than the total weight of gold mentioned in the valuation report. For which, Ld. Counsel submitted that assessee’s mother only sold 642.300 grams for Rs. 16,10,567/- and gifted Rs. 16 lakhs to the assessee. Thus the AO is not correct in denying cash gift given by the assessee’s mother which is supported by gift deed with proper witnesses and duly notorized. Thus, Ld. Counsel requested to delete the addition made on account of cash deposit.
6. Per contra, Ld. DR appearing for the Revenue supported the orders passed by the lower authorities and requested to confirm the addition.
7. We have given our thoughtful consideration and perused the materials available on record including paper books filed by the assessee which contains Gift Deed clearly mentions that the Gift given to the assessee on 02.02.2012 which was said to be deposited by the assessee in his bank account, from 04.02.2012 to 31.03.2012, the total sum of Rs. 16,05,000/-. This gift is from the mother only which is within the relatives as defined in section 2(41) of the Act. Further the assesee’s mother in her old age gifted part of the amount from sale of her gold jewellery given as gift to the assessee, which cannot be doubted, since the same is supported by valid notorized Gift Deed with two witnesses and value of the jewells were determined by Registered Valuer. Thus the addition made by the AO is liable to be deleted.
8. In the result, the appeal filed by the assessee is hereby allowed.
Order pronounced in the open court on 06-10-2026
