Father receives Rs 4 lakh as cash gift in son’s marriage and wins income tax case of unexplained income; ITAT Ahmedabad ruling explained

In India, it is pretty standard to give cash as wedding gift. However, when Mr. Manubhai got Rs 4.31 lakh in cash as son's wedding gifts a month before the wedding date this led to tax issues for him. While he argued that he got the said cash gift for the occassion of his son's marriage, the income tax assessing officer said that these cash gifts were allegedly received almost a month before the actual wedding, which goes against the norm of receiving such gifts on or after the wedding day. The tax department accused him of not fully disclosing his full and true income.

Manubhai tried to prove that his son’s marriage was real and even submitted the entire list of guests who gave cash gifts. He also submitted the wedding invitation card and marriage certificate, but the tax officer remained unconvinced, leading to the rejection of his claims and the addition of unexplained income amounts. The tax department said that he had Rs 18.51 lakh in unexplained income, which included Rs 14.2 lakh from contract work and Rs 4.31 lakh from unexplained marriage gifts of his son.

Initially, he filed an appeal against this order of the tax officer with the commissioner of appeals (CIT Appeals), but lost the case. Subsequently, he filed an appeal in ITAT Ahmedabad. On August 12, 2025, the Income Tax Appellate Tribunal (ITAT) Ahmedabad bench granted relief to Manubhai. Thus, his appeal was allowed by ITAT Ahmedabad and he won the case.

Check out the details below to find out why why this dad came out on top against the tax department and what the ITAT Ahmedabad had to say.

How did this case start?

According to ITAT Ahmedabad order dated August 12, 2025, here’s the timeline of events:

• April 11, 2018: He filed an ITR declaring his total income as Rs 4.6 lakh (4,61,800) which included salary and presumptive taxation income under Section 44AD from carrying out contract work.
• AY 2011-12: During scrutiny, the Assessing Officer observed that he had made substantial cash deposits in his bank accounts, amounting to Rs 14,20,000 in State Bank of India (SBI) and Rs 15,00,000 in HDFC Bank.
• AY 2011-12: He stated that these deposits were from various sources: Rs 14.2 lakh from contract income, Rs 9 lakh from sale of agricultural land, Rs 1 lakh withdrawn from his wife’s account, and Rs 5 lakh as gifts received on his son’s marriage and personal savings. For deposits-Rs 14.2 lakh claimed as contract income and Rs 4.31 lakh as gifts-the same were not found to be satisfactorily by the Assessing Officer (AO).
• May 18, 2023: CIT (Appeals) rejects his case and thus he filed an appeal with ITAT Ahmedabad.
• August 12, 2025: ITAT Ahmedabad rules in his favour and overturns CIT (A) order.

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What did ITAT Ahmedabad say about gifts received for son’s wedding?

The ruling was delivered by a bench of Ahmedabad ITAT comprising Dr. BRR Kumar, Vice-President and Siddhartha Nautiyal, Judicial Member. The ITAT Ahmedabad said:

• On going through the evidence placed on record by the assessee (Manubhai) before the Assessing Officer (AO), and the assessment records, it is seen that the assessee had given complete details of invoices and list of parties from whom the contractual income had been earned.
• It is also not disputed that the contractual income was offered to tax under Section 44AD of the Act in the return of income. However, even though complete details of the income break-up along with name of parties were furnished to the Assessing Officer (AO), no independent inquiry was made by the Assessing Officer (AO) to rebut the veracity of the evidence placed on record by the assessee.
• With regards to the list of persons from whom wedding gifts were received, it is seen that the assessee (Manubhai) had given a complete list of names from whom the wedding gifts were received.
• The Assessing Officer (AO) has not given any specific finding to rebut the evidence placed on record by the assessee. Had the evidence been an afterthought, then clearly the assessee (Manubhai) 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.
• However, 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.
• Accordingly, looking into the evidence placed on record and totality of circumstances, we are of the view that the addition is not sustainable in the hands of the assessee.
• In the result, the appeal of the assessee (Manubhai) is allowed.

Mihir Tanna, associate director, S.K Patodia LLP, says: In a given case, two different provisions are discussed (1) Presumptive taxation (2) Gift on occasion of marriage.

As per the income tax provisions, if the assessee has opted for presumptive taxation under Section 44AD, the assessee is not required to maintain the books of account as well as the details of purchases made. The assessee is required to maintain sales only.”

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When asked about wedding gift law, Tanna said: “Income tax law provides that gifts received in excess of Rs 50,000 are to be treated as income, except where gifts are received on the marriage of an individual.”

The definition of individual excludes any person related to the individual. Tanna says: “However, the expression "individual" appearing in income tax Act, relates to the marriage of the individual concerned, i.e., the assessee and not to the marriage of any other person related to him in whatsoever degree, whether as his daughter or son. In a given case, the source of cash deposit was doubted and not the person from which such amount was received. Accordingly, gift provisions were not applied by the assessing officer.”

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What should taxpayers who receive gifts in weddings note in the light of this judgement?

Chartered Accountant Dr Suresh Surana explains: "This judgment highlights the importance of maintaining clear and substantiated documentation for wedding gifts, especially when questioned by the tax authorities. "Here are key takeaways for taxpayers receiving wedding gifts:

• Comprehensive Documentation Requirements - Taxpayers must maintain complete lists of gift-givers with detailed information. The judgment emphasized that the assessee had provided a complete list of persons from whom wedding gifts were received, and no specific defects were pointed out by the Assessing Officer. Some of the key documentation to be maintained by the taxpayers include:
• Detailed gift register with names, amounts, and dates of receipt. Marriage invitation cards and certificates to establish the occasion, Bank deposit records showing the actual receipt of cash gifts
• Disclosure Requirements - Even though wedding gifts are exempt from tax, taxpayers must declare them in their Income Tax Returns under "Exempt Income". This ensures transparency and compliance with disclosure norms while claiming the exemption."