ITAT deletes tax addition on cash deposits for Jaipur resident
The tribunal accepted a gift deed as evidence that a man's mother provided funds from the sale of her gold jewellery.
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) has ruled in favour of a resident of Jaipur, deleting a tax addition of Rs 13,04,900 related to cash deposits, according to a report by The Times of India.
The case began after the Income Tax Department investigated a man for purchasing a property worth Rs 20.23 lakh and depositing Rs 13.04 lakh in cash without filing a return. The Assessing Officer (AO) initially treated these transactions as unexplained income, adding approximately Rs 33.29 lakh to his total income.
The taxpayer's counsel argued that the cash came from his mother, who had sold her old gold jewellery and gifted him Rs 16 lakh. To support this, the man provided a notarised gift deed signed by two witnesses and a valuation report from a registered valuer, which had valued the jewellery at Rs 18,36,230 in 2011.
The AO had previously questioned the explanation because the sale documents did not list individual gold items and noted differences in recorded weights. However, the counsel stated that jewellery is typically sold by total weight in the trade and confirmed the mother sold 642.300 grams of jewellery for Rs 16,10,567.
In an order dated October 6, 2026, the ITAT accepted the explanation, noting the gift was from a relative as defined under Section 2(41). The tribunal observed that the gift was supported by a valid deed and a professional valuation, leading to the removal of the addition for the cash deposits.