| The Tax Publishers2020 TaxPub(DT) 3338 (Ctk-Trib) INCOME TAX ACT, 1961
Section 68
Where the assessee explained that cash deposits in bank account were partly out of gift received from her husband and partly were out of business receipts, income from which was offered on presumptive basis under section 44AD then no addition under section 68 was justified. Further, the husband of the assessee S was a regular income tax assessee and for the assessment year 2014-15, he has filed return declaring income of Rs. 2,78,66,138. Therefore, the genuineness of gift received from her husband was not in doubt. Since, the amount has been remitted from the husband's bank account, the assessee had established the identity and creditworthiness of the donor.
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Income from undisclosed sources - Addition under section 68 - Cash deposits - Assessee submitted that amounts deposited in cash in her bank account represented gift from her husband and also part of business receipts
The assessee was an individual deriving income from supply of building of construction materials. The assessing officer found that there were cash deposits to the tune of Rs. 1,31,00,000 to the bank account of the assessee. The assessing officer required the assessee to explain the source of the cash deposits. In reply the assessee stated that on 29-3-2014 and 31-3-2014 the cash deposits of Rs. 50,00,000 and Rs. 75,00,000, respectively totalling to Rs. 1,25,00,000 were received as gifts from her husband. As regards cash deposit of Rs. 4,00,000 on 5-8-2013 and Rs. 2,00,000 on 30-9-2013, it was explained that the assessee had filed income tax return on presumptive basis under section 44AD of the Act, hence, the receipt of said amount has been subsumed in scheme of presumptive taxation and have already been taken into account while declaring income under section 44AD of the Act. AO did not accept the contention of assessee and added the total cash deposits to the total income of assessee as unexplained. Held: AO observed that the cash deposits in assessee's account was the gift received from her husband on different dates but AO did not accept the transaction as genuine and made addition treating the same as unexplained cash deposits. The Commissioner (Appeals) on perusal of the current account of husband, found that there were debit entries of Rs. 54,00,000 and Rs. 75,00,000 on 29-3-2014 and 31-3-2014 respectively. On the same day there were credit entries of Rs. 50,00,000 and Rs. 75,00,000 respectively in the assessee's account maintained in Allahabad Bank. The Commissioner (Appeals) further held that the assessing officer had simply rejected the valid explanation of the assessee without advancing any cogent reasons. Accordingly, he deleted an addition of Rs. 1,25,00,000 out of the total addition of Rs. 1,31,00,000. With regard to remaining cash deposit, CIT(A) held that these were trade receipts earned in course of business and were included while computing assessee's taxable income under section 44AD. Tribunal upheld the CIT(A)'s order.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
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