In an assessee-friendly ruling, the Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has deleted an addition made by the income tax department against an 80-year old assessee on the ground that the past savings to the extent of Rs. 2,50,000 cannot be doubted.
The department, during the course of search, found that a fixed deposit for Rs.2,50,000/- was found in the name of the assessee. The assessee was called upon to explain the source of investment and the assessee submitted that it is out of past savings. The explanations made by the assessee was overruled by the department and accordingly, the addition was confirmed.
While allowing appeal filed by the assessee, ITAT Vice-President N V Vasudevan held that the addition must be deleted.
“Since no documentary evidence was filed, the AO treated the sum of Rs.2,50,000/- was unexplained investment which the CIT(A) confirmed. It is the plea of the assessee that the assessee is a 80 years old person and his savings to the extent of Rs.2,50,000/- cannot be doubted. After considering rival submissions, I am of the view that the plea of the assessee in this regard has to be accepted. Admittedly, the fixed deposit in question was issued on 02.06.2010 and matured for payment on 02.06.2012. Considering the income returned by the assessee in the past, I am of the view that the plea of the assessee that the source of funds for making investments in fixed deposit is out of past savings deserves to be accepted. Accordingly, this addition is also deleted,” the Tribunal said.
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