Mother’s gift deed saved son from tax notice

Mr. Ram found himself in conflict with the Income Tax Department after purchasing a property and depositing a substantial sum of cash in his bank account, while also failing to file an income tax return. However, the Income Tax Assessing Officer in Jaipur already possessed information about Mr. Ram's property purchase and cash deposit.

Consequently, the AO issued an income tax notice, urging Mr. Ram to file an income tax return (ITR). Following the notice, Mr. Ram declared an income of Rs 2.14 lakh and filed the ITR. Upon reviewing Mr. Ram's ITR, the AO deemed the case suspicious, ultimately classifying the property investment and cash deposit as unexplained, and initiating proceedings against Mr. Ram.

He was subsequently charged with evading tax on Rs 20.23 lakh of unexplained property investment and Rs 13.04 lakh of unexplained cash deposit.

Feeling aggrieved, Mr. Ram appealed to the Commissioner of Appeals (CIT-A), who decided to grant him partial relief by deleting the tax notice for the unexplained property value of Rs 20.33 lakh, while upholding the tax notice for the unexplained cash deposit of Rs 13.04 lakh. Mr. Ram then filed another appeal with the Income Tax Appellate Tribunal (ITAT) in Jaipur regarding the unexplained cash issue.

On October 6, 2026, the ITAT Jaipur ruled in favor of Mr. Ram, and both the unexplained cash and unexplained property tax notices were subsequently cancelled.

The victory in this case was attributed to the production of a notarized gift deed by Mr. Ram, accompanied by two witnesses, which demonstrated that his mother had gifted him Rs 16 lakh on February 2, 2012. This monetary donation had been deposited into Mr. Ram's bank account in February and March 2012. The origin of this money stemmed from the sale of his mother's old gold jewelry, which had been appraised at ₹18.36 lakh by a registered valuer on March 31, 2011.