SATHYANARYANAN SAIGEETHA,TRICHY V. ITO, WARD-1(3), TRICHY

ITA 282/CHNY/2025

AI Insights

The case involves Sathyanarayanan Saigeetha, a homemaker, who appealed against the assessment order of the Income Tax Officer, Ward-1(3), Trichy, for the Assessment Year 2017-18. The primary contention was regarding the source of cash deposits totaling Rs.20,20,537 in her bank account, which the Assessing Officer (A.O) partially disallowed, leading to additions under sections 56(2)(vii) and 69A of the Income-tax Act. The Tribunal examined the explanations and evidence provided by the assessee, particularly focusing on the nature of the deposits and the relationships of the donors.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652998 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R. ANITHA
• Assessee Lawyers: A.S. RAMAKRISHNAN; C.A
• Keywords: Gift
• Section: 143(3)

Judgement Text

"आयकर अपीलीय अिधकरण, ‘सी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0019ी जॉज जॉज क े, उपा एवं \u0019ी जगदीश, लेखा सद' क े सम BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.282/Chny/2025 िनधा रण वष /Assessment Year: 2017-18 Sathyanarayanan Saigeetha, T-1, 4th Floor, Orchid Apartments, Ramakrishna Nagar, Kallukuli, Trichy – 620 020. Vs. The Income Tax Officer, Ward-1(3), Trichy. [PAN: DXOPS 3062L] (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीला थF की ओर से/ Appellant by : Shri A.S. Ramakrishnan, C.A HIथF की ओर से /Respondent by : Ms. R. Anitha, Addl. CIT सुनवा ई की ता रीख/Date of Hearing : 07.05.2025 घोषणा की ता रीख /Date of Pronouncement : 17.06.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2017-18 arises out of the order of Learned Commissioner of Income Tax, Appeal, Addl/JCIT(A), Mysore [hereinafter “Addl. CIT(A)”] dated 18.12.2024 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Income-tax Act, 1961 (hereinafter “the Act”) on 11.12.2016. ITA No.282/Chny/2025 :- 2 -: 2. The assessee is a home maker and filed her return of income declaring total income of Rs. 3,592/-. The assessee has made cash deposit of Rs 20,20,57/- and explained the source of cash deposit as under: 1. Deposit by self out of savings Rs. 2,30,000/- 2. Gift from Brother Sarvana Rajkumar Rs. 3,70,000/- 3. Gift from Aunt P.R. Subhadra Rs. 4,17,789/- 4. Gift from mother P. VAsanth Rs. 2,51,374/- 5. Amount received from husband’s friend S. Sagayaraj Rs. 2,51,374/- 6. Amount received from Husband’s friend Shri K. Sundaram Rs. 2,80,000/- 7. Gift from father S. BAkthavachalam Rs. 2,50,000/- Total Rs. 20,20,537/- The A.O did not accept the explanation of cash deposit of Rs.4,17,789/- received from husband’s aunt P R Subhadra, and added u/s. 56(2)(vii) of the Act in the assessment order passed u/s 143(3) of the Act. The A.O also did not accept the explanation in respect of Rs.2,30,000/- as personal savings, and Rs.5,01,374/- received from Shri S. Sagayaraj and Shri K. Sundaram as loan repayments and made addition u/s 69A of the Act. On appeal, the Ld. Addl. CIT(A) had confirmed the additions. 3. Before, us, the Ld. Authorized Representative (A.R) of the assessee has made the following submissions: “The additions made for Rs. 11.49.163/- and the related source for repayment explained are as under: ITA No.282/Chny/2025 :- 3 -: Name / Source for cash deposits not accepted by A.O Relation with Appellant / Source Amount (₹) P.R. Subadra Aunt of appellant's husband; aged 86 years; a spinster living with the appellant in the absence of other relatives 4,17,789 Savings of the appellant From husband's earnings 2,30,000 S. Sagayaraj Loan given by appellant's husband to his friend, returned 2,21,374 K. Sundaram Loan given by appellant's husband to his friend, returned 2,80,000 6. The appellants husband Sri.P.S.Sathya Narayanana a Non Resident Indian working in Abudhabi, UAE being the only relative for the aged pensioner Smt. P.R.Subadra, is living along with the appellant in India in the absence of any other legal heir, had enough cash savings with her and had extended a sum of Rs. 4,17,789/- to the appellant's husband for repayment of gold loan. Confirmation letter from Smt.P.R.Subadra produced at the time of assessment is attached. 7. The appellant's husband Sri.P.S.Sathya Narayanana is having a NRE account with State Bank of India, Tiruchirapalli Branch with Account No.30332833330. Copy of the Passbook is attached herewith. Periodical remittances made by him to NRE account, were withdrawn by the appellant for family maintenance and the surplus were used for repayment of the gold loan account of the appellant. 8. The appellant had her first bank account with State Bank of India, Tiruchirapalli with Account No. 20268996925 opened on 04.06.2016 at the time of obtaining gold loan from SBI. Copy of the Passbook is attached herewith. 9. As the appellant's husband an NRI, any Bank transaction other than foreign currency was transacted through appellant's bank account. Smt. P.R.Subhadra appellant's husband aunt who is a spinster aged about 86 years and the only relative being appellant's husband, out of natural love and affection had with her brother son Sri.P.R.Sathya Narayanan had gifted a sum of Rs. 4,17,789/-. As per the 4th Proviso, \"brother or sister of either parents of the individual\" will also fall within the definition of relative and will qualify for the exemption. Though the intended gift was to appellant's husband by her aunt, as it was the only SB a/c he had with the ITA No.282/Chny/2025 :- 4 -: appellant was deposited in that. Such deposit has been taken as a taxable income of the appellant's hand, which is highly unreasonable. 10. Hand Loans given by appellant's husband to his friends Sri.S.Sagayaraj of Rs. 2,21,374/- and Sri.K.Sundaram of Rs. 2,80,000/-, were also returned by them by cash. As the appellant alone was having a normal savings account, the loan extended by them could not be repaid to the appellant's husbands friends. As they returned the loan by cash, it was used by the appellant to repay the gold loan obtained by her. Confirmation letters furnished by the Sri.S.Sagayaraj and Sr.K.Sundaram are attached herewith.” 4. The Ld. Departmental Representative (DR), has relied on the orders of lower authorities. 5. We have heard the rival submissions, and perused the materials available on record. The A.O has made addition of cash deposits in the bank account to the extent of Rs.11,49,163/-. The Ld. AR has explained the source of cash deposit as gift received from husband’s aunt of Rs. 4,17,789/- and savings out of husband’s earnings of Rs. 2,30,000/-, and loan repayment received from S.Sagayaraj of Rs.2,21,374/- and from K. Sundaram of Rs. 2,80,000/-. The A.O has treated the amount of Rs.4,17,789/- received from husband’s aunt as gift and added u/s. 56(2)(vii) of the Act. The Ld AR before the AO/Ld. Addl. CIT(A) has explained that the gift was received by the assessee from her husband’s aunt but now explained that the gift was received through her husband. We do not agree with the submission of Ld. AR as the assessee has all along submitted that a sum of Rs 4,17,789/- ITA No.282/Chny/2025 :- 5 -: was received from her husband’s aunt without consideration, but now has changed the stand without adequate proof that gift was meant to be her husband just to avoid the rigour of section 56(2)(vii) of the Act. As the husband’s aunt is not relative as per proviso to section 56(2)(vii) of the Act, the AO has correctly brought the above sum under taxation u/s 56(2)(vii) of the Act. We accordingly confirm the addition of Rs.4,17,789/. As regards to addition of Rs.2,30,000/- as personal savings, and Rs. 5,01,374/- received from Shri S. Sagayaraj and Shri K. Sundaram as loan repayments, made u/s 69A of the Act, the assessee has submitted sufficient evidence in support of her savings and loan advanced and received back, we delete these additions made u/s 69A of the Act. In light of the above, the appeal filed by the assessee is partly allowed. 6. In the result, the appeal filed by the assessee is partly allowed. Order pronounced on 17th day of June, 2025 at Chennai. Sd/- Sd/- (जॉज जॉज क े) (George George K) उपा / Vice President (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 17th June, 2025. EDN/- ITA No.282/Chny/2025 :- 6 -: आदेश क\u0019 \bितिल प अ े षत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b थ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF "