No Addition can be made u/s 69 of Income Tax Act on Money kept for Treatment of Grand Mother: ITAT [Read Order]

The Hyderabad bench of Income Tax Appellate Tribunal (ITAT) has recently held that no addition could be made under Section 69 Income Tax Act, 1961 on money kept for treatment of grandmother.

Assesee Yeddula Harsha Vardhan is an individual deriving income from salary as a Joint Managing Director of M/s. Axis Energy Ventures India Pvt. Ltd.

While conducting a search and seizure operation in the residential premises of assessee the department seized  4 lakh rupees belonging to his father, who kept it to meet the medical expenses of his grandmother and mother.

Therafter notice under Section 142(1) of the Income Tax  Act was issued and the assessee explained the source of income of his family and also enclosed the income tax returns of himself.

When the assessment proceedings carried on AO states that at the time of search and seizure operations, the assessee explained that such Rs. 4 lakh belongs to his father and subsequently, changed his version that it belongs to the members of the combined family. Hence the AO made additions under Section 69 of the Income Tax Act.

Aggrieved the assessment order assesee filed appeal before the CIT(A). The CIT(A) confirmed the addition made by the assessing officer.

Thereafter, the assesee filed a second appeal before the tribunal.

When the matter was preferred before the tribunal K.C. Devdas, counsel for the assessee submitted that before the AO, assessee explained about his financial status of family  and medical needs of his mother, father and grandmother.

Further, it was very much needed to  keep some money in cash in view of the old age of the parents of the assessee and the grandmother, it is not abnormal for any man to keep a sum around Rs. 5 lakhs.

Jeevan Lal Lavidiya, counsel for the revenue supported the contentions of the lower authorities.

It was observed by the tribunal that parents and grandmother of the assessee due to their old age, require medical attention.

At the time of the search and seizure proceedings, assessee stated that his "grandmother aged 88 years fell down, surgically operated upon in Yashoda Hospital, Somajiguda and anticipating any medical emergency, his father pooled up money and kept a sum of Rs. 4 lakhs for such purpose."

Hence, the two member bench of Ramakanta Panda, (Accountant Member) and  K.Narasimha Chary, (Judicial Member) allowed the appeal and confirmed that the amount seized from the assessee's residential premise were kept  for the treatment of assesee’s grandmother.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates