ITAT Delhi Deletes ₹30.7 Lakh Tax, Accepts Marriage 'Sagan' As Source Of Demonetisation-Era Deposits
Manu Sharma
26 Jan 2026 3:49 PM IST
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 22 January held that cash deposits during the demonetisation period representing marriage 'sagan' (gifts from friends and relatives) cannot be treated as unexplained income while deleting an addition of Rs. 30.7 lakh made against an individual assessee.
The order was passed by Vice President Mahavir Singh, in an appeal against an order of the National Faceless Appeal Centre dated 3 July 3 2025.
The assessee had filed his return declaring a total income of Rs. 2.73 lakh under the heads salary and other sources. The case was selected for full scrutiny under the Computer Assisted Scrutiny Selection (CASS) system due to cash deposits made during the demonetisation period.
The Assessing Officer completed the assessment on 12 December 2019, determining total income at Rs. 33.43 lakh by treating Rs. 30.7 lakh deposited in the assessee's bank accounts as unexplained cash under Section 69A and taxing it under Section 115BBE. The Commissioner of Income Tax (Appeals) dismissed the assessee's appeal, leading to the ITAT proceedings.
Before the ITAT, the assessee explained that the cash deposited in his account represented gifts (sagan) received on the day of his marriage from 348 relatives, friends, and other invitees “as a token of love and affection.” He submitted a detailed list of contributors along with the amounts, copies of the marriage invitation, and affidavits sworn by his parents and two other individuals confirming the marriage ceremonies and the receipt of cash gifts.
After examining the evidence, the ITAT observed that the documentation sufficiently established the source of the deposits. It held that the explanation offered by the assessee was credible and that the addition of Rs. 30.7 lakh under Section 69A read with Section 115BBE was unsustainable.
The ITAT also noted that “as far as assessment under Section 115BBE of the Act is concerned, the Hon'ble Madras High Court in SMILE Microfinance Ltd. vs. ACIT in WP(MD) Nos. 2078 & 1742 of 2020 dated 19.11.2024 has already settled the issue against the department, confirming that the law applies to transactions on or after 01.04.2017 only.”
Accordingly, it allowed the appeal and directed deletion of the addition of Rs. 30.7 lakh.
For the Appellant: K Sampath
For the Respondent: Manoj Kumar