2023 (1) TMI 164 - AT - Income Tax

Tribunal rules in favor of assessee, deletes Rs.8 lakhs as unexplained money under Income Tax Act

The Tribunal allowed the appeal, ruling in favor of the assessee regarding the addition of Rs.8 lakhs as unexplained money under section 69A of the Income ... Unexplained money u/s.69A - amount received from his father - HELD THAT:- We noted that the CIT(A) has not doubted the source of maturity of assessee’s father FDs of Rs.8 lakhs which was withdrawn on 01.11.2016. Admittedly, the assessee made deposit on 10.11.2016 in cash, this amount of Rs.8 lakhs. The only dispute is confirmation, which now the assessee confirmed by filing affidavit of assessee’s father which states This money is received from two of my matured Fixed Deposits. I handed over the above mentioned sum to my son for his needs. From the above, it is clear that the source is explained and even the assessee’s father confirmed having handed over the above sum of Rs.8 lakhs to his son, which ultimately got deposited in assessee’s bank account on 10.11.2016. We find explanation of the assessee as reasonable and assessee could explain the source of this money and hence, the same cannot be treated as unexplained u/s.69A of the Act. Therefore, we delete this addition and allow the appeal of assessee. Issues:- Addition of Rs.8 lakhs as unexplained money u/s.69A of the Income Tax Act, 1961.Analysis:1. Admissibility of Additional Evidence: - The appellant sought to submit additional evidence through an affidavit from the assessee's wife and father, explaining the source of Rs.8 lakhs deposited in the bank account. - The Senior DR opposed the admissibility, arguing that the evidence should have been presented before the lower authorities. - The Tribunal admitted the additional evidence, considering the explanation provided by the father regarding the source of the funds.2. Assessment of Unexplained Money: - The AO had made a total addition of Rs.26 lakhs as unexplained money deposited during the demonetization period. - The CIT(A) accepted the explanation for Rs.18 lakhs received from the wife but questioned the source of Rs.8 lakhs from the father. - The Tribunal noted that the father had withdrawn Rs.8 lakhs from his account and handed it over to the son, which was then deposited in the son's bank account. - The Tribunal found the explanation reasonable and deleted the addition of Rs.8 lakhs, allowing the appeal of the assessee.3. Final Decision: - The Tribunal allowed the appeal filed by the assessee, ruling in favor of the assessee regarding the addition of Rs.8 lakhs as unexplained money. - The order was pronounced in the open court on 21st December 2022 in Chennai.This judgment primarily dealt with the admissibility of additional evidence and the assessment of unexplained money under section 69A of the Income Tax Act, 1961. The Tribunal admitted the additional evidence provided by the father, which clarified the source of the disputed amount. Ultimately, the Tribunal found the explanation reasonable and deleted the addition of Rs.8 lakhs, thereby allowing the appeal of the assessee.