ITAT Allows Rs 2.75 Lakh In Wedding Gifts To Explain Cash Deposits, Upholds Rs 25,000 Addition

The Income Tax Appellate Tribunal (ITAT), Pune, has accepted Rs 2.75 lakh of a bank employee’s Rs 3 lakh cash deposits as wedding gifts and accumulated savings. It has upheld a tax addition of Rs 25,000 because the taxpayer could not provide confirmations for some gifts.

The tribunal has partly allowed the appeal filed by Manisha Madhukar Shatalwar against the Income Tax Department.

ITAT Accepts Rs 2.75 Lakh As Explained

Shatalwar worked with Indian Overseas Bank and declared an income of Rs 3,10,270 in her income tax return for assessment year 2016-17, filed on 1 August 2016.

Her marriage took place on 3 December 2014. She claimed that relatives, family members and friends had given her cash gifts worth Rs 3,19,422 on the occasion. She kept the money and later deposited Rs 3 lakh into her bank account in six instalments of Rs 50,000 each to create a fixed deposit.

The assessing officer treated the entire Rs 3 lakh as unexplained money. The first appellate authority also rejected her explanation, following which she approached the tribunal.

During the appeal, Shatalwar submitted a list of people who had given her wedding gifts. The amounts generally ranged from Rs 100 to Rs 10,000, while a few gifts were between Rs 15,000 and Rs 19,000.

The tribunal noted that cash gifts at weddings were customary in India. It also referred to the provisions of the Income Tax Act, 1961, concerning money received on the occasion of an individual’s marriage, for which no monetary limit was prescribed under the relevant provision.

The tribunal considered the donor list, Shatalwar’s employment with a bank, her income tax return filings, family circumstances and explanation regarding accumulated savings. It accepted Rs 2.75 lakh as explained and deleted the addition to that extent.

ITAT Upholds Rs 25,000 Addition

The tribunal did not accept the full amount because Shatalwar had not furnished confirmations for cash gifts exceeding Rs 10,000. It therefore upheld the remaining addition of Rs 25,000 and partly allowed her appeal.

As per the judgement, Rs 25,000 of the disputed deposit will continue to be treated as unexplained for the assessment year under consideration, while the addition relating to the remaining Rs 2.75 lakh has been deleted.

The ruling concerns assessment year 2016-17 and the provisions of the Income Tax Act, 1961, applicable to that period.