ITAT rejects and disbelieves cash gifts by close relatives at the time of marriage and anniversary as no such evidence was found during search
ABCAUS Case Law Citation
ABCAUS 3420 (2020) (11) ITAT
Important case law relied upon by the parties:
Dhirajlal Girdharlal vs. CIT 26 ITR 736(SC)
Omar Salay Mohamed Sait, 37 ITR 51
Sheo Narain Duli Chand vs. CIT reported in 72 ITR 766
In the instant case, the assessee had challenged the order passed by the CIT(A) in partly sustaining the addition made on account of cash found during the search.
A search was conducted by the CBI at the premises of the assessee’s husband. During the said search, large amount of cash was found from bank lockers and house.
On being asked by the Assessing Officer (AO) to substantiate the cash found, the assessee furnished a list of friends/close relatives who had gifted cash to the assessee.
However, the AO was not satisfied with the explanation given by the assessee holding the same to be after thought and not substantiated with proper evidence. Accordingly, AO made addition to the total income of the assessee.
On appeal the CIT(A) did not approve the submissions of the assessee and directed the AO to re-allocate the income in the hands of the assessee and her husband.
Before the Tribunal, the assessee contended that the AO got swayed mainly by the fact that there had been a search carried out by the CBI.
It was submitted that the observation of the AO that there is a general tendency of near and dear ones to sympathise and come forward in times of crises, was hypothetical and is a general statement.
He submitted that there is no such presumption in law and in fact the assessee had produced all such persons before the CBI in as much as the AO.
Referring to the decision of Hon’ble Allahabad High Court, he submitted that it had been held that there is no presumption that witnesses appearing for an assessee come forward to give false evidence to oblige the assessee’.
It was submitted that various evidences submitted by the assessee were completely brushed aside by the AO in an arbitrary manner and that too without bringing any material on record.
ITAT rejects cash gifts given by close relatives at the time of marriage
The Tribunal observed that the assessee had tried to explain the source being amount received from different family members, close relations and amount received at the time of wedding anniversary and amount received at the time of engagement and marriage of her son.
However, the assessee neither at the level of the AO nor before the CIT(A) was able to produce the so-called jewelers to whom the mother-in-law and mother of the assessee had sold jewellery.
The Tribunal found force in the argument of the Revenue that if some cash portions were real gift, at least some document like gift deed or gift letter or some scribbling to that effect would have been found in the house or in possession of the assessee or her husband. However, nothing of that sort was found.
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The Tribunal stated that the so-called long list containing names of different persons who had given gifts at the time of engagement or marriage of the son or at the time of silver wedding anniversary could not be believed in absence of any iota of evidence found at the time of search and, therefore, concurred with the finding of the CIT(A) on this issue that this was nothing, but, an afterthought.
The Tribunal further opined that the various affidavits and confirmations filed from various close relatives, were nothing but mere self serving documents just to accommodate the assessee to explain the source. It was also strange that not a single transaction was through banking channel and everyone has given cash only to the assessee either for her treatment or for safe custody which was unbelievable.
Accordingly the Tribunal sustained the addition made by the CIT(A) and decided the case against the assessee and in favour of the Revenue