The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the credits to capital account shown as gift from assessee’s aunt are not unexplained credits. Therefore, the bench deleted the addition made by the lower authorities.
The assessee Amit Prabhudas Patel is a doctor and proprietor of Sarvoday Hospital, Balasinor and also the proprietor of Sarvoday Pharmacy-Medical Store.
The assessment of the assessee under Section 143(3) of the Income Tax Act, 1961 was finalized and determined a total income of Rs.1,14,48,386 upon making an addition on unexplained credits shown in the assessee’s capital account
Aggrieved by the order, the assesee filed an appeal before the Commissioner of Income Tax (Appeals)[CIT(A)], who dismissed the appeal of the assessee. Thus, us the assessee filed a second appeal before the tribunal.
Aseem Thakkar, the Counsel for the assessee submitted that the assessee is holding a joint FDRs along with his aunt Smt. Sushilaben Patel and the said amount was received after her death. Also these were old FDRs which were matured subsequently and upon demise of the aunt was credited in the account of the assessee being the joint holder of the same.
Further it was argued that the amount of FDRs was credited after the death of the assessee’s aunt and the same was not chargeable to tax in view of the fact that the amount in dispute was received from relatives as defined under Section 56 of the Income Tax Act.
Atul Pandey, representing the department, supported the decision of the lower authorities.
The two-members bench of Annapurna Gupta ( Accountant Member) and Madhumita Roy (Judicial Member) after considering the submissions of the both parties observed that the credit is from maturity of old FDRs made by his aunt who was taken care of by the assessee only in the absence of her relative staying abroad
Therefore the bench allowed the appeal filed by the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
