Gifting son cash in lump sum or at intervals is prerogative of father– ITAT deleted addition

How a father support his son either gifting him lump sum cash or at intervals is his prerogative – ITAT deleted addition

In a recent judgment, ITAT Delhi has held that desire of a father how he would support his son either gifting him cash in lump sum amount or at intervals is his prerogative and cannot be doubted by Revenue in the absence of any negative evidence in support of such finding made.

ABCAUS Case Law Citation:
4452 (2025) (03) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) NFAC in partly confirming the addition for cash deposit in his bank account.

The Assessing Officer (AO) finalized the assessment under section 143(3) of the Income Tax Act, 1961 (the Act) by making addition on account of unexplained cash deposit. In appeal addition was restricted. As per CIT(A) the assessee failed to justify the source of such cash deposits made by him. 

Before the Tribunal the assessee submitted that he had deposited the cash in his bank account out of his cash in hand and the cash gifts received from his father who retired from a Public Sector Undertaking. The assessee claimed receipt of gift from his father during the Financial Year on various dates besides a gift by cheque from him.

The Tribunal observed that the withdrawals were made by the father on very many occasions in the year under consideration which had been claimed to have been utilized for making gift in cash to the assessee and in turn the cash deposit made by the assessee.

The case of the Revenue was that had the father gifted any money to the assessee the same ought to have been gifted at a lump sum that too through cheques as had already been done in the case of gift made by the father to the assessee through cheque and therefore, the explanation rendered by the assessee was found to be not justifiable.

The Tribunal opined that the father had gifted the assessee by way of cheque and rest amount by cash at different intervals and such cash gift was questioned by Revenue which was not acceptable as the desire of a father how he would support his son either gifting him lump sum amount or at intervals is his prerogative and cannot be doubted by Revenue in the absence of any negative evidence in support of such finding made.

The Tribunal held that the addition was made by the Revenue without any cogent reason and accordingly quashed the addition. 

Download Full Judgment Click Here >>

• Over 30 approvals u/s 153D within minutes amounted to total non-application of mind
• When disallowance is made u/s 37(1) section 69C is not applicable – ITAT
• ITAT refuses to accept cash book as source of deposit as assessee was not subject to audit
• Mere preparation of income tax notice and send to dispatch not effective issuance
• Agreement validly terminated prior to CIRP not give any enforceable right to corporate debtor