Wedding Gifts Can't Be Automatically Treated As 'Unexplained Income' Without Evidence: ITAT

Dr. BRR Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) stated that the fact that marriage gifts were received prior to the date of marriage itself could not lead to the conclusion that the same are not genuine, when a complete lists of persons from whom the gifts were received was duly submitted during the course of assessment proceedings and no specific defect had been pointed out with respect to the lists of persons so furnished by the assessee.

In this case, the assessment proceedings were initiated under section 147 of the Income Tax Act (Act) as the assessee had not filed his return of income within the prescribed time.

During scrutiny, the Assessing Officer observed that the assessee had made substantial cash deposits in his bank accounts, amounting to ₹14,20,000/- in State Bank of India (SBI) and ₹15,00,000/- in HDFC Bank.

The assessee stated that these deposits were from various sources: ₹14,20,000/- from contract income, ₹9,00,000/- from sale of agricultural land, ₹1,00,000/-withdrawn from his wife's account, and ₹5,00,000/- as gifts received on his son's marriage and personal savings.

The deposits-₹14,20,000/- claimed as contract income and ₹4,31,500/- as gifts- were not found to be satisfactorily explained by the Assessing Officer.

Therefore, the Assessing Officer held that ₹18,51,500/- (comprising ₹14,20,000/- of unexplained contract income and ₹4,31,500/- of unexplained marriage gifts) remained unexplained under section 69A of the Act. Accordingly, the said amount was added to the assessee's total income for A.Y. 2011-12.

The Assessee filed an appeal before the CIT (Appeals) which was dismissed.

The assessee submitted that no independent inquiry was made by the assessee to rebut the evidences placed on record by the assessee. The only reason why this amount was added as unexplained income was on the ground that the amount was received prior to the date of marriage.

With regards to list of persons from whom wedding gifts were received, the Tribunal observed that the assessee had given complete list of names from whom the wedding gifts were received. The Assessing Officer has not given any specific finding to rebut the evidences placed on record by the assessee.

Had the evidence been an afterthought, then clearly the assessee could have exercised the option of showing the date of receipt of such wedding gift as having been received on / after the date of marriage, added the bench.

The bench opined that the addition is not sustainable in the hands of the assessee.

In view of the above, the Tribunal allowed the appeal.

Case Title: Manubhai Dahyabhai Bhoi v. Income Tax Officer

Case Number: I.T.A. No.779/Ahd/2025

Counsel for Appellant/ Assessee: Sulabh Padshah

Counsel for Respondent/ Department: Pratik Sharma

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