TaxTMI 
TaxTMI 
2026 (8) TMI 701
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....ate Mr. Mohit S. Banker for the respondent. 2.This Tax Appeal is filed by the Revenue under section 260A of the Income Tax Act, 1961 (For short "the Act") against the judgment and order dated 20.12.2023 passed by the Income Tax Appellate Tribunal, Rajkot Bench, Rajkot(For short "the Tribunal") in ITA No. 59/Rjt/2018 for the Assessment Year 2006-2007 raising the following substantial questions of law: "(a) Whether on the facts and circumstances of the case and in law, the learned ITAT has erred in deleting the addition made of Rs. 9,15,56,045/ on account of unexplained investment u/s. 69 of the Income Tax Act, 1961 despite assessee's admission that the income was not offered in the country of source of money and thereby creat....
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....e under section 148 of the Act was issued on 12.03.2013. Pursuant to such notice, assessee filed return of income declaring total income at Rs. 2,21,271/- and claimed exempt income of Rs. 33,22,644/- being dividend income. Assessment order under section 143(3) read with section 147 of the Act was passed on 31.03.2014 finalising the assessment at Rs. 9,28,77,320/- after making addition of Rs. 9,15,56,045/- being unexplained investment under section 69 of the Act and Rs. 10 lacs under section 68 of the Act being unexplained cash credits. It was the case of the assessee that the deposits made in his bank accounts were primarily sourced by the funds transferred by his son and his sister from abroad. 4. CIT(Appeals) by order dated 22.12.2017 ....
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....his son in UK to assessee's NRE account from which investments were made into Mutual Funds. In our considered view, in the instant facts, no addition is sustainable under Section 69 of the Act. 16. In the result, Ground No. 1 of the assessee's appeal is allowed. 17. Ground No. 3 (Addition of Rs. 10 lakh under Section 68 of the Act) is similar to Ground No. 1 of the assessee's appeal. In view of our observations made in Ground No. 1 of the assessee's appeal, Ground No. 3 of the assessee's appeal is also allowed." 7. Learned Senior Standing Counsel Mr. Varun Patel appearing for the appellant Revenue submitted that the source of funds in NRE account was not explained by the assessee and, therefore, the ....
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....aring for respective parties, what is evident from the explanation tendered by the petitioner was that all the investments in Time Deposits and Mutual Funds were made from NRE Accounts. The order impugned indicates that the petitioner had furnished such details which read as under: "i. Time deposits (NRE) of Rs. 51,00,000/- with Kotak Mahindra Bank Limited were made out of his NRE Saving account number 6511210464 with Kotak Mahindra Bank Limited. Assessee submitted bank account statement of his NRE bank account with Kotak Mahindra Bank Limited. ii. Time deposits (NRE) of Rs. 80,00,000/- with HDFC Bank Ltd were made out of his NRE Saving account number 50100158161603 with HDFC Bank Ltd. Assessee submitted copy of certificat....
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....reply of the assessee has not been found satisfactory." 5. Undisputedly, the funds came from NRE Accounts and the source therefore was beyond the reach of the authorities. Even on reading the provisions of section 10(4), it is apparent that such incomes are exempt from being included in the total income. 6. The impugned orders dated 29.03.2022 in all these petitions are, therefore, without jurisdiction. The orders dated 29.03.2022 in the respective petitions are therefore quashed and set aside. Petitions are allowed, accordingly. Rule is made absolute accordingly, with no orders as to costs." 11. Similarly in Special Civil Application No.9497 of 2024 vide order dated 08.10.2024, this Court quashed and set aside notice i....