The Income Tax Appellate Tribunal (ITAT), Delhi bench, during deleting the addition under section 69A of the income tax act 1961 held that the cash gift through the brother and sister does not be treated as “unexplained.” The taxpayer, Ms. Ritu Jain claimed that towards the poor health of her husband, the taxpayer’s sister had gifted the stated amount from her family savings which would be maintained via any household to meet the incident. The taxpayer said that providing the gift has been confirmed in the affidavit of the donor.
On 18/11/2016 the taxpayer leaned on the press release in which the government has circulated that the small deposits incurred via housewives and others shall not be examined by the Income Tax department towards the fact that the current exemption of the tax would be Rs 2.5 lakhs and indeed referred to the instruction No.03/17 dated 21.02.2017 that was SOP for validation of cash deposits.
Shri Anil Chaturvedi, Accountant Member revealed that in this case, the A.O. made an addition of Rs.3,55,000 via treating gifted amount of Rs.1,80,000 and Rs.1,75,000 through Mrs. Kamlesh Devi and Sh. Rakesh Jain respectively that was unelaborated money under section 69A of the Income Tax Act, 1961 without having any consideration of the Government Instruction No.3/2017 on 21.02.2017 and press release on 18.11.2016 (supra) in which the present exempt limit for income tax is Rs.2.5 lakhs.
In context to that, the taxpayer has released her initial onus by proving the identity, creditworthiness, and genuineness of the transactions. Hence AO could not ask the taxpayer to prove the source. Moreover, the A.O. has not mentioned any defect in the Affidavits furnished through both the donors viz., Mrs. Kamlesh Devi and Sh. Rakesh Jain and, hence, the decision of the Hon’ble Supreme Court in the case of M/s. Mehta Parikh & Co. vs., CIT (supra), depending on the taxpayer is applied to the actualities and affairs of the case.
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The taxpayer told that her husband was suffering from cancer and is in treatment, and various medical expenses needed to be made. His statement is not dishonest. It will be the normal practice compiled within the duration of the medical emergencies. The relatives, friends, and other people of the family give their time and expenditures in need to the patient.
