No Addition u/s 68/69 for cash deposits of amount returned by father/ brother out of gift by assessee

Addition u/s 68/69 deleted for cash deposit in bank of amount returned back by father and brother out of amount gifted by assessee

ABCAUS Case Law Citation:
ABCAUS 2929 (2019) (05) ITAT

The Assessing Officer (AO) AO observed that that there were cash deposits in the Bank account of the assessee, the source of which could not be explained by assessee. Accordingly, the AO treated the said cash deposits as unexplained income u/s 68/69 of the Income Tax Act, 1961 (the Act) and added the same to the income of the assessee.

Against the assessment order, assessee appealed before the CIT(A) stating that the said amount was received from his father and brother to whom he had earlier given the similar amounts. However the CIT(A) dismissed the appeal of the assessee. Aggrieved with the impugned order the assessee went in appeal before the Tribunal.

The Tribunal noted that from the bank account of the assessee it was clear that firstly the assessee had given the above amounts to his father and brother and from the very same amount the amount was received back by the assessee. This factual position had been admitted by the AO in the first remand report submitted to the CIT(A) and also similar position had been also admitted by the AO in the second remand report, who was the AO different to the AO who submitted the first report.

The Tribunal observed that for proving the identity of brother and father of the assessee, not only the assessee had submitted documentary evidence in the shape of copy of ITR, their bank accounts, their PAN and Aadhar Card etc., however, CIT(A) had doubted regarding the creditworthiness of brother and father of the assessee.

The Tribunal on the facys of the case opined that the credit worthiness of the father and brother of the assessee could not be solely determined on the basis of quantum of return of income filed by them but that had also to be seen in the light of the fact that the money they provided to the assessee was earlier provided by the assessee to them, the fact had been admitted in both of the remand reports submitted by the AO before CIT(A).

The Tribunal thus observed that the assessee had placed on record all the documentary evidence to show and prove that the money deposited in the bank account of the assessee had come from the bank accounts of the father and brother of the assessee and also earlier withdrawal made by the assessee and the burden of the assessee was not more than to produce the evidence which has been produced by the assessee.

Therefore, the Tribunal was of the view that on merits the amount credited in cash in bank account of assessee could not be considered as assessable either u/s 68 or u/s 69 of the Act.

Accordingly, it deleted the addition made u/s. 68/69 of the Act made by the AO and upheld by the CIT(A).

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