The Pune bench of the Income Tax Appellate Tribunal ( ITAT ) has set aside the appellate order and deleted the addition made by the Assessing Officer(AO) of considering gold loan amount as unexplained Income under Section 69A of the Income Tax Act, 1961.
The assessee, Ashok Ravsaheb Tambe, had filed his Income Tax Returns (ITR) under Section 139(1) of the Income Tax Act 1961, declaring his total income at Rs. 1,98,650/-. The ITR filed by the assessee was selected for scrutiny and was asked to explain the source and nature of Rs. 7,51,939/- in cash transferred into his bank account at Nashik Merchant Co-op. Bank Ltd. (NMCBL).
The Assessing Officer (AO) considered the cash deposits as unexplained money under Section 69A and taxed them under Section 115BBE of the Income Tax statute, as according to the AO, the assessee failed to explain the nature and source of their cash deposit.
Aggrieved by the order of the AO, the assessee approached the Commissioner of Income Tax (Appeals) [CIT(A)]. Unfortunately, the appeal before CIT(A) did not yield favorable outcomes for the assessee. Aggrieved, the assessee has come before the ITAT.
Prior to the above-mentioned cash deposits were due to the fact that the assessee had secured a gold loan of Rs. 8,50,000/- from the same bank and made equivalent cash withdrawals for his daughter’s marriage on 12-05-2016.
However, due to certain reasons, the assessee had to postpone his daughter’s wedding, and the sum after paying the fees of his daughter’s MBA admission was deposited in the same branch.
The Bench was of the opinion that Though the period of cash deposits coincided with a period of demonetization, the assessee has clearly and sufficiently explained the source available to him to both of the tax authorities listed below.
The bench also considered the case of Shashi Garg Vs PCIT, in which the Supreme Court held that when the source of income was satisfactorily explained by the assessee, the revenue is not entitled to treat the same as unexplained income under Section69 A of the Act.
The bench consisting of G. D. Padmahshali (Accountant Member) and Shri Vinay Bhamore (Judicial Member), reversed the order of AO’s addition of considering gold loan amount as unexplained Income under Section 69A of the Income Tax Act. The bench thus set aside the impugned order and directed the AO to delete the additions made.
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