In a woman-friendly ruling, the Cuttack bench of the Income Tax Appellate Tribunal (ITAT) has held that the source of money cannot be doubted if the fixed deposits are made out of the savings of the assessee.
The assessee, Ms. Namita Mohanty is a senior citizen living with her family including son and daughter-in-law. Post-search proceedings, the AO made an addition of Rs.13,50,000/- treating the same as unexplained cash deposit against the assessee.
The assessee contended that to make fixed deposit u/s.153A, when no incriminating material was found during the course of search u/s.132 of the act and the addition was made without considering the confirmation for advance received for Rs.4,50,000/- & Rs.5,00,000/- from daughter in law and son as also remaining Rs.4,00,000/- out of saving from income of the assessee.
The Tribunal bench comprising Shri Chandra Mohan Garg, Judicial and Arun Khodpia, Accountant Member pointed out that the CIT DR has not disputed the fact that the assessee is a senior citizen and was earning income and filing the return of income.
“So far as the explanation given by Shri Soumendrakumar Mohanty during post search enquiry is concerned, from para 4 part-1 of the assessment order, we are unable to see that whether Soumendra Kumar Mohanty was asked by way of show cause and his statement was recorded by the AO and it is not clear in which capacity, Sri Mohanty was asked to explain the source of cash used by the assessee for making fixed deposit. We may point out that there is nothing in the assessment order that the explanation given by Sri soumendra Kumar Mohanty was confronted to the assessee in any manner,” the Tribunal said.
Concluding the order in favour of the assessee, the Tribunal held that “we are of the considered opinion that the assessee has submitted all possible and plausible evidences under her control and command to substantiate that she received money of Rs.4,50,000/- and Rs.5,00,000/- from her daughter in law and son and Rs.4,00,000/- out of her own savings, these facts get support from thereturn of income and payment of tax thereon. Thus, no addition can be made in regard to these two creditors in the hands of the assessee. Therefore, use of amount of Rs.4,00,000/- out of savings of assessee for making investment in fixed deposit cannot be doubted in any manner and the entire addition made by the AO cannot be held as sustainable, therefore, we direct the AO to delete the same.”
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