Meenakshi Subramaniam – [2026] 183 taxmann.com 724 (Article)
At one wedding, everyone was frantically looking for the groom. One said, maybe he has gone to the parlour for a facial. Another remarked that he may be getting last-minute stitching changes for his dress. Yet another said, he may have run away, due to butterflies in his stomach. Finally, they found that there was a long line of people in the backyard and the bridegroom, sitting on a chair, was collecting marriage gifts from all on the big day itself. He had heard that the income tax department would deny exemption, if the gifts were collected before or after the wedding!
In an interesting case [Dhruv Sanjay Gupta v. JCIT (181 taxmann.com 233), recently, the Mumbai Tribunal had to rescue the bridegroom, as his marriage gifts were being declared taxable, for not being received on wedding day, itself. The words ‘occasion of marriage’ in Section 56(2) (x) were being pulled, stretched and pulverised in the income tax case to mean that gifts given on marriage day, only, can get tax exemption.
[2025] 181 taxmann.com 233 (Mumbai – Trib.)
Dhruv Sanjay Gupta
v.
Joint Commissioner of Income Tax
The assessee had received Rs. 2,11,35,523/- as gift on occasion of his marriage, out of which Rs. 2 Crores came from Shri Mr Anil Kumar Goel and Rs. 11,35,523/- was got from Shri Siddharth Jatia. The assessee got married on 08.12.2012, fact of which is not in dispute. Assessee claimed that he received the said gifts on the occasion of his marriage. Shri Anil Kumar Goel is his first cousin from the paternal grandfather. The amount of Rs. 2 Crores from Shri Anil Kumar Goel was received by cheque No.603989 dated 08.12.2012 drawn on Royal Bank of Scotland, Chennai branch, India. A memorandum of gift dated 08.12.2012 was executed for the said gift. The cheque for the gift was cleared and credited to the bank account of the assessee on 18.12.2012, i.e., after the date of marriage. The second gift, received rom Shri Siddharth Jatia comprised US$ 21,000 equivalent to Rs.11,35,523/-. It was submitted that Shri Siddharth Jatia is a family friend and is from Singapore. For this gift, a cheque vide No.080096, dated 04.12.2012 drawn on Uco Bank, Singapore was gifted vide a gift deed dated 04.12.2012. The said cheque was cleared on 02.01.2013.
The assessee had filed his return of income on 31.07.2013 reporting total income at Rs. 1,30,15,040/-. in the year under consideration.
The assessee filed an appeal against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, protesting against the assessment order by Joint Commissioner of Income Tax, Range-27(1), Mumbai.
The grounds taken by the assessee were:
- The learned CIT (Appeals) has erred in law and on the facts of the case in sustaining the addition of Rs. 2 crores u/s. 56(2)(vii)(a) of the Income Tax Act without appreciating the fact that the said amount was received as a gift by the appellant from Mr Anil Kumar Goel on the occasion of his marriage.
- The learned CIT (Appeals) has erred in law and on the facts of the case in sustaining the addition of Rs. 11,35,523/- u/s. 56(2)(vii)(a) of the Income Tax Act without appreciating the fact that the said amount was received as a gift by the appellant from Mr Siddharth Jatia on the occasion of his marriage.
- The learned CIT (Appeals) has erred in law and on the facts of the case in sustaining the above additions on conjectures and surmises without appreciating fact that all necessary evidences in relation to the gifts have been submitted to the assessing officer during the course of the hearing.
According to the assessee, the two gifts were received on the occasion of his marriage and therefore, exempted under the proviso to section 56(2)(vii). However, according to the ld. Assessing Officer, these gifts were received by the assessee after the occasion of the marriage, based on dates of clearing of cheques and amount getting credited to the bank account of the assessee. He thus, held that these transactions of gift received by the assessee are sham transactions wherein assessee has been used as a benami to build up his capital.
The claim of the assessee was that ld. Assessing Officer has taken a microscopic view of the meaning “on the occasion of marriage” without going into the intent of the proviso to section 56(2)(vii), since the cheques were realised at a later date which were given by the respective donors and were received by the assessee on the occasion of his marriage. The ld. Assessing Officer observed in his order that there was a meagre balance in the bank account of the donor, Shri Anil Kumar Goel as on 13.12.2012 at Rs. 7,523/-. Also, on 16.12.2012, the balance was only Rs. 8,39,201/-. It was only on 17.12.2012 that the donor received Rs. 1.40 Crores from one, Shri Pinku Bagmar and Rs. 50 lakhs from grandfather of the assessee, i.e., Shri Devki Nandan Gupta.
It was out of these funds that the cheque of gift given to the assessee was encashed and funds got transferred to the bank account of the assessee. According to the ld. Assessing Officer, the funds got transferred much after the date of marriage which occurred on 08.12.2012. He took a view that no person can give a gift of money on a particular day which he does not possess or does not actually have. On the date of cheque i.e. 08.12.2012, Shri Anil Kumar Goel did not have sufficient balance in his bank account to give the gift of Rs. 2 Crores which was actually transferred to the assessee on 18.12.2012 after the receipt of moneys from Shri Pinku Bagmar and Shri Devki Nandan Gupta. Thus, he concluded that the amounts received by the assessee as gifts are not covered under the proviso to section 56(2)(vii), since the same were not received on the occasion of marriage but much later after the marriage.
It was out of these funds that the cheque of gift given to the assessee was encashed and funds got transferred to the bank account of the assessee. According to the ld. Assessing Officer, the funds got transferred much after the date of marriage which occurred on 08.12.2012. He took a view that no person can give a gift of money on a particular day which he does not possess or does not actually have. On the date of cheque i.e. 08.12.2012, Shri Anil Kumar Goel did not have sufficient balance in his bank account to give the gift of Rs. 2 Crores which was actually transferred to the assessee on 18.12.2012 after the receipt of moneys from Shri Pinku Bagmar and Shri Devki Nandan Gupta. Thus, he concluded that the amounts received by the assessee as gifts are not covered under the proviso to section 56(2)(vii), since the same were not received on the occasion of marriage but much later after the marriage.
Assessing Officer noted that the said credit of amount of Rs.11,35,523/-mentioned by the bank is against export advance proceeds USD 4779.85 by Manish Export. Based on this fact, ld. Assessing Officer concluded that it is not a gift received on the occasion of marriage but a sum received by the assessee without any consideration and therefore chargeable to tax.
Regarding the second gift, the Assessing Officer noted that the said credit of amount of Rs.11,35,523/-mentioned by the bank is against export advance proceeds USD 4779.85 by Manish Export. Based on this fact, ld. Assessing Officer concluded that it is not a gift received on the occasion of marriage but a sum received by the assessee without any consideration and therefore chargeable to tax.
The asseee also strongly submitted that identity and credit worthiness of both the donors is established beyond any doubts and genuineness of the transaction is also well established. In respect of gifts from Shri Anil Kumar Goel, he referred to his balance sheet as on 31.03.2013, to demonstrate the net worth which he carried having total investments in equity shares and other assets totalling to Rs. 131,86,35,212/- with a meagre unsecured loan for credit card of Rs. 14,500/-. From this, it was asserted that Shri Anil Kumar Goel is a high networth individual having his own capital of Rs.131.88 crores. He also pointed to his income and expenditure account to reflect the quantum of income earned by him during the year which amounts to Rs.11.41 crores. Thus, he had all the means to give a gift of Rs. 2 crores to his cousin on the occasion of his marriage.
According to the assessee, what the concern of the ld. Assessing Officer is, on the timing of clearance of cheque only. The marriage occurred on 08.12.2012, when the cheque was gifted to the assessee. It got cleared and the amount got credited into his bank account on 18.12.2012, i.e., immediately after 10 days of the marriage ceremony. This brief gap of 10 days is normal to such transaction, when the assessee is occupied with his marriage ceremonial functions and may lead to such time gap for realisation of the amount gifted at the time of marriage.
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