Personal Savings of Govt Employee cannot be Suspected: ITAT deletes Addition [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal has deleted the addition observing that the personal savings of government employees could not be suspected for several years.

 In the instant case the assessee-PiyushbhaiMangalbhai Patel who was a pharmacist in government hospital filed a return for A.Y. 2010-11, declaring total income at Rs.3,35,490/-. The assessing while processing the return under Section 143(1) of the Income Tax Act 1961 found that the assessee had deposited the total cash of Rs. 15,70,000/- in the State Bank of India. The Assessing Officer made an addition of Rs. 12,70,000/- on account of unexplained cash deposits in the Bank account and Rs. 446 towards undisclosed interest income after considering the reply of the assessee.

P. D. Shah, who appeared for the assessee submitted that the cash of Rs. 15,70,000/- was the minimum balance which was required to show in the account of assessee as the assessee's son was planning to go abroad. He further submitted that the fund was arranged from the Gift from father-in-law and wife, Loan from sister-in-law, and the remaining balance from his personal savings. He also contended that sufficient evidence had also been produced.

Ravindra, on behalf of revenue contented that the cash which was said to be arranged from the personal savings of the assessee should be doubted as it was a huge amount.

The Tribunal Bench of SuchitraKamble deleted the addition and allowed the petition. The Tribunal also observed that the personal saving of a government employee could not be doubted for several years as the assessee had been working with salary as pharmacist in Government Hospital since 1976.

To Read the full text of the Order CLICK HERE

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