Amount of Rs. 6 lakh claimed as gift received from parents in law not unreasonably high – ITAT

Amount of Rs. 6 lakh claimed to have been received as gift from parents in law not an excessively or unreasonably high amount – ITAT

In a recent judgment, ITAT Lucknow has held that amount of Rs. 6,00,000/- claimed by assessee to have been received as gift from her parents in law was not an excessively or unreasonably high amount and was acceptable

ABCAUS Case Law Citation:
4907 (2025) (12) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the Commissioner of Income Tax (Appeals) dismissing the appeal of the assessee.

The appellant assessee was an individual and filed her return of income in response to notice under section 148 of the Act, declaring total income of Rs. 3.70 lakhs. During the assessment proceedings on query by the Assessing Officer, the assessee vide its reply submitted that cash deposit of Rs.4,00,000/- in Bank account was gifted by her mother-in-law out of natural love and affection and Rs. 2,00,000/- was gifted by her father-in-law.

However, the Assessing Officer disbelieved the submission of the assessee and completed the assessment and passed assessment order under section 147 read with section 144B of the Act and determined the total income of the assessee making addition of Rs. 6,00,000/- under section 69A of the Act. 

The Tribunal observed that there is well known practice in the households of Indian society that the ladies make regular savings out of funds for house hold expenses.  Further, ladies and their children are known to receive monetary gifts on important social and family occasions. 

The Tribunal opined that the amount of Rs.4,00,000/- claimed by the assessee to have been received from her mother-in-law can be easily believed to have been out of accumulated savings of her mother-in-law, in the specific facts and circumstances of the present case, having regard to these traditions in Indian Society, social and financial status of the persons concerned; and this amount was not excessive or unreasonable in the facts and circumstances of the case. 

The Tribunal further opined that the amount of Rs. 2,00,000/- claimed by the assessee to have been received from her father-in-law was also quite acceptable; because in the facts and circumstances of this specific case; having regard to social and financial state of the persons concerned; possibility of medical emergency, etc. this amount is not excessive or unreasonable. 

The Tribunal observed that it is quite understandable that some reasonable amount of cash is kept at home to meet emergency expenses if and when the occasion arises; as well as for expenses towards medical purposes, education of children, social occasions and other day to day household expenses.  In Indian society at important social occasions, such as festivals, birthdays, anniversaries etc., the family members get cash gifts from relatives, friends and acquaintances.

The Tribunal held that the amount of Rs.6,00,000/-; which was claimed by the assessee to have been received from her parents in law, was not an excessively or unreasonably high amount; and acceptable in the specific facts and circumstances of the case. 

Accordingly, the Assessing Officer was directed to delete the aforesaid addition.

Download Full Judgment Click Here >>

• Penalty u/s 270A deleted as assessee filed revised computation during scrutiny
• Penalty u/s 271B for unfilled column 40 in Tax Audit Report Form 3CD deleted by ITAT
• Merely ex-parte rectifying computation without amending assessment order not make it nullity- ITAT
• Once assessee discharges primary onus, it shifts to AO to bring evidence to contrary – ITAT
• Cost Inflation Index for FY/Tax Year 2026-27 notified by CBDT. See Up-to-date Table of CII