2023 (1) TMI 1205 - AT - Income Tax

Tribunal allows appeal on cash gifts, dismisses bank deposit addition, upholds notice validity. Emergency circumstances considered.

Shri Ashokbhai Amrutbhai Valand Versus ITO Ward-5 (1) (4), Ahmedabad

The tribunal partially allowed the appeal, determining that the cash deposits from relatives were genuine gifts and not subject to doubt. The addition of ... Reopening of assessment u/s 147 - unexplained money u/s 69A - Validity of notice issued - HELD THAT:- It is pertinent to note that to meet the emergency situation of additional expenses by the assessee the assessee has obtained cash not only from assessee’s father and mother but also the close relative i.e. the maternal uncle, maternal aunt as well as paternal uncle and paternal aunt and the said relation cannot be doubted by the Assessing Officer. The gift offered by this relatives are appears to be genuine and therefore, the CIT(A) was not right in confirming the addition of the extent of Rs. 4,00,000/-. Validity of notice - date of approval and date of issuance of notice was identical - As regards, the legal ground of the assessee merely that date of approval is identical to the issuance of notice cannot be treated as the time barring or non-valid notice under Section 148 of the Act. Therefore, the submission to that extent of the assessee is rejected. The appeal of the assessee is partly allowed. Issues:1. Addition of cash deposit to the bank account under Sec 69(A) of the Income Tax Act, 1961 on account of disallowance of gift received from relatives.2. Re-opening assessment by AO under Sec. 148 of the Income Tax Act, 1961 and confirming assessment under Sec. 143(3) r.w.s. 147 of the Income Tax Act, 1961.Issue 1: Addition of Cash Deposit to Bank Account:The appellant's appeal was against the order confirming the addition of cash deposit to the bank account under Section 69(A) of the Income Tax Act, 1961, related to a gift received from relatives. The Assessing Officer made an addition of Rs. 10,42,000 as unexplained money based on the cash deposits during the relevant period. The CIT(A) partly allowed the appeal, accepting some gifts as genuine but confirming an addition of Rs. 3,00,000 from certain relatives. The appellant submitted additional evidence, including gift deeds and proof of agricultural income, to support the claim that the cash received was for obtaining a Visa and were genuine gifts. The tribunal found that the gifts from various relatives, including parents and close family members, were genuine and not to be doubted. The tribunal held that the addition of Rs. 4,00,000 was not justified, as the gifts appeared genuine, and rejected the argument that the notice under Section 148 was invalid due to the identical date of approval and issuance.Issue 2: Re-opening Assessment under Sec. 148:The notice under Section 148 for the assessment year 2010-11 was issued to the appellant for non-filing of the return of income. The appellant argued that the notice was not received within the prescribed time limit, and the date of approval being identical to the date of issuance should render the notice invalid. However, the tribunal rejected this argument, stating that the notice was valid. The tribunal also considered the merit of the gifts received, with the CIT(A) making additions in respect of certain relatives after verifying their genuineness. The tribunal upheld the CIT(A)'s decision on these additions, emphasizing that the gifts from various relatives were genuine and intended to assist the appellant in a time of emergency. The tribunal thus partly allowed the appeal, concluding that the gifts were genuine and the notice under Section 148 was valid.In conclusion, the tribunal partially allowed the appeal, holding that the gifts received from relatives, including parents and close family members, were genuine and not to be doubted. The addition of Rs. 4,00,000 to the bank account was deemed unjustified, and the argument regarding the validity of the notice under Section 148 was rejected. The tribunal emphasized the emergency situation faced by the appellant, which necessitated obtaining cash from relatives, and upheld the genuineness of the gifts received.