In a recent ruling, the Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) held that the income from the wife’s investment is not taxable at the hands of the husband and deleted the Rs. 12 lakh protective addition made by the department.
The assessee, Brijesh Kumar, filed his income tax return ( ITR ) declaring income of Rs. 1,88,850, which was processed under Section 143(1) of the Income Tax Act, 1961. The case was selected for scrutiny under CASS, and notices under Sections 143(2) and 143(1) along with questionnaires were issued. An assessment order was passed by making an addition of Rs 86,20,000 under Section 69 of the Income Tax Act as an unexplained investment.
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The assessee, who was aggrieved by the above order, appealed before the Commissioner of Income Tax ( Appeals ) [ CIT( A ) ].
The CIT( A ) partially upheld the addition, which includes Rs. 20,50,000 ( claimed as the assessee’s capital ) and Rs. 12,00,000 ( claimed as invested by the assessee’s wife, Munesh Devi ), and the remaining additions were deleted, restricting the addition to Rs. 32,50,000.
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With regard to the additions of Rs. 12 lakhs, it was submitted by the assesee, that the amount was invested by his wife and the tax for the above-mentioned amount has been paid by the assessee’s wife, and thus, the addition made in the hands of the assessee does not sustain as its amounts to double addition.
The bench observed that the protective addition made in the hand of the assessee of Rs. 12 lakhs does not survive as the tax was paid by the wife for the amount invested by the wife.
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The Delhi ITAT, comprising of S. Rifaur Rahman ( Accountant Member ) and Yogesh Kumar U.S., allowed the appeal filed by the assessee.
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