No addition can be made on Cash Deposited to Bank Account from Husband's Savings for pay of Bank Loan: ITAT [Read Order]

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that addition could not be made on cash deposited to the bank account from husband's savings for payment of bank loan.

The assessee, Ramesh Rani Chatwal filed the appeal before the tribunal against the order of Commissioner of Income Tax Appeal {CIT(A)} for the assessment year 2017-18 by challenging the addition made by the AO on the cash deposited to the bank account for pay bank loan.

During the appellate proceedings before the tribunal no one appeared for the assessee. The written submission filed before the bench on behalf of the assessee contended that the cash was deposited in lieu of payment of interest against loan taken from bank. Also, she is a beneficiary of a Loan Against Property from a bank for which stipulated interest gets due on a monthly basis.

Further, it was submitted that to avoid late payment charges and an adverse impact on credit ratings of the assessee, cash deposit was made urgently out of the savings made by the old age lady over the years in the household.

It also includes the amount was out of savings by the husband of the assessee and was also deposited for payment of loan amount.

Moreover, the assessee relied upon the decision of Delhi ITAT in case of Leela Devi VS ITO point out that “housewife's contribution in the family is "immeasurable" and thus money saved over the years by a Housewife, if deposited during the demonetisation period, cannot be deemed to be income assessable under Income Tax”

Om Prakash, Department Representative opposed these submissions and supported the orders of the authorities below.

The tribunal after reviewing the facts observed that without proper verification of the facts AO made additions towards the deposits. Thus, the lower authorities were not justified in making the entire amount deposited in the bank as an unexplained income.

Hence, a single bench of tribunal Kul Bharat Judicial Member deleted the addition made by the assessing officer and allowed the appeal filed by the assessee.

To Read the full text of the Order CLICK HERE

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