The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition made by the assessing office under section 69 of the Income Tax Act,1961 on the ground of unexplained investment in a bank account.
Anjali Roy, the appellant assessee was an individual and not assessed to tax either in her earlier life or after the assessment year. The assessee was staying in a small village, which was a five-hour journey from Kolkata, and had been assessed to tax only on the ground that during demonetisation, a credit of roughly Rs.10 lakhs was reflected in her account.
The assessing officer made an addition under section 69 of the Income Tax Act by holding that it was an unexplained investment of the assessee in the Bank account. Thus the assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confirming the addition made by the assessing officer.
Dilip Chatterjee and Sourdeep Majumdar, the counsels for the assessee contended that the complete bank details given to the Assessing Officer did not analytically analyze all the details and passed an ex-assessment order under section 144 of the Income Tax Act.
It was also submitted that the assessee belongs to rural life and never had taxable income in her life and her affairs cannot be expected as organized as those of other assesses in the urban area.
P.P. Barman, the counsel for the revenue contended that the amount cannot be stated as available with the assessee for re-deposit during the demonetization period. It was also submitted that the addition made by the assessing officer was as per law and was not liable to be deleted.
The bench observed that she had never been in a tax-payer category in itself is sufficient that she had no unexplained money, rather whatever may be saved from agricultural activity, her husband’s salary throughout her life might had been deposited in the bank account.
The two-member bench comprising Rajpal Yadav (Vice-President) and Rajesh Kumar (Accountant Member) held that the assessee had not made any unexplained investment in the bank account and whatever deposits were made are either out of the past savings or from the loans taken from relatives and the addition made by the assessing officer was against the law and are liable to be deleted while allowing the appeal filed by the assessee.
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