S.P.S. Thakur v. ITO - Taxpublishers.in

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The Tax Publishers2020 TaxPub(DT) 4384 (Chd-Trib)

INCOME TAX ACT, 1961

Section 69

Where deposit in assessee's bank account was made through cheque from his daughter as gift and further, the assessee explained the source of donor that the said amount was received by his daughter from her mother-in-law on account of accident claim of her former husband; the addition made on account of unexplained deposit was liable to be deleted.

Income from undisclosed sources - Addition under section 69 - Alleged unexplained deposit - Deposit received as gift from daughter---Assessee explained source of donor

AO made addition on account of unexplained deposit. Assessee submitted that such deposit was made through cheque from his daughter as gift. Further, the source of the deposit was also explained that the said amount was received by his daughter, from her mother-in-law through banking channel on account of accident claim of her former husband. However, the assessee could not produce his daughter for statement before the AO as she was settled in USA. AO, therefore, concluded that the assessee could not satisfactorily prove that the said amount was received as gift from his daughter. He accordingly treated the said amount as unaccounted income of the assessee. CIT(A) further, upheld such addition observing that under normal circumstances, the father would not accept gift from his daughter. Therefore, he concluded that the said amount was unaccounted income of the assessee routed through the account of his daughter. Held: Addition on account of unexplained deposit was confirmed by CIT (A) only on the basis of assumption that a father would not take any gift from his daughter, however, as per provisions of section 56, the father and daughter comes in the definition of 'relatives' and there is no bar for giving or taking gift inter se by them. Further, it was not disputed that the amount was transferred to the account of the assessee from bank account of his daughter. It had also not been disputed that the daughter of the assessee was settled in USA, therefore, the assessee could not produce her before the AO. Assessee further explained the source of the donor also that the said amount was received by his daughter from her mother-in-law on account of accident claim of her former husband. Therefore, the addition made on account of unexplained deposit was deleted.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2005-06

IN THE ITAT, CHANDIGARH BENCH