The New Delhi bench of Income Tax Appellate Tribunal (ITAT) held that no addition can be made under Section 69A of Income Tax Act, 1961 when the source of cash deposit was duly explained during the assessment.
Ram Kishon, the appellant assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confiming the addition made by assessing officer under Section 69A of Income Tax Act, 1961.
Gurjeet Singh, CA Shri Shaantanu Jain, Sharad Agarwal, and Monika Ghai, the counsels for the assessee contended that assessment officer on account of cash deposit was not sustainable as it was already scrutinized by the assessing officer in the case of the assessee’s wife, Ratni, who was holding joint bank account with the assessee in HDFC bank. It was also submitted that the interest earned on the said amount was offered to tax by Ratni.
Om Prakash, the counsel for the revenue supported the orders of the authorities below and submitted that since the assessee could not explain source of cash deposit.
The Bench observed that the assessee had successfully demonstrated with supporting evidence source of cash deposit to his bank account under consideration and no addition was required to be made in the hands of assessee and therefore the addition was liable to be deleted.
A single member bench comprising of Chandra Mohan Garg (Judicial Member) held that the addition made under Section 69A of Income Tax Act, 1961 was against provisions of law while allowing the appeal filed by the assessee.
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