The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that no additions shall be imposed by the assessing officer when the income has been duly explained by the assessee.
The assessee is working as a teacher having income below taxable income and was not required to file his return of income. During the year under consideration, the Assessing Officer noticed in the reopening proceedings that the assessee has purchased immovable property for a consideration of Rs.19,03,395/-, out of which he has paid a cash amount of Rs.1,85,000/-.
On failure of the assessee to explain the same the Assessing Officer proceeded to make the additions of Rs.1,85,000/- to the unexplained money/cash deposit in the bank account and thereby framed the assessment under section 147 read with Section 144 of the Income Tax Act, 1961.
The Authorized Representative for contended that the amount of Rs.1,85,000/- added by the Assessing Officer as unexplained income/cash was his saving from the salary as the assessee is working as a teacher and brought on record form No.16.
The assessee has brought on record the fact that he has taken Rs.75,000/- from his mother who was a pensioner and her bank statement is showing a sufficient balance to lend Rs.75,000/- to the assessee. Furthermore, the savings bank account of the assessee was also maintaining a balance of Rs.2.18 lakhs.
The Single-member bench comprised of Kuldip Singh (Judicial member) held that the Commissioner of Income Tax (Appeal) [CIT(A)] had decided the issue in a hurried manner without giving adequate opportunity of being heard to the assessee.
Therefore, the order passed by the Commissioner of Income Tax (Appeal) was set aside and the Assessing Officer was directed to treat the amount of Rs.1,85,000/- as the explained income of the assessee and delete the addition. Thus, the appeal filed by the assessee was allowed.
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