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Addition deleted as assessee’s income was sufficient to explain source of money
Addition deleted as assessee’s income was sufficient to explain source of money
Sh K Raghava Reddy declared income of Rs 26.7 lakhs. In a search, foreign currency of Rs 6 lakhs was found in assessee’s home. Notice u/s 153A (of Income Tax Act, 1961) was issued. Assessee offered Rs. 2.1 lakhs and his son offered Rs 1.76 lakhs as income. Remaning amount of Rs 1 lakh, found as torn notes was added to assessee’s income. CIT(A) confirmed addition. ITAT deleted addition of Rs 1 lakh as assessee’s income was sufficient to explain source of currency.-500400
1. Assessee individual derived income from remuneration received from M/s. Midwest Granites (P) Ltd as its Chairman.
2. He filed his return of income declaring total income of Rs. 26.7 lakhs.
3. A search was conducted in case of assessee and foreign currency worth Rs. 6 laks was found.
4. A notice u/s 153A (of Income Tax Act, 1961) was issued to the assessee.
5. Assessee offered as income Rs. 2.1 lakhs in AY. 2007-08 and 2008-09, and his son offered Rs 1.76 lakhs in AY. 2008-09.
6. Assessee explained that Rs 1 lakh belonged to his son-in-law.
7. AO rejected the explanations and treated it as un-accounted income of the assessee.
8. Further, the remaining amount of Rs. 1 lakh was found in torn notes.
9. AO made addition of the said amount to assessee’s income.
10. CIT(A) confirmed the additions.
On appeal, the ITAT held as under:
11. In fact, in the impugned assessment year, assessee has declared income of Rs. 26,74,400/-.
12. That being the case, it is hard to believe that the assessee would not have disclosed a petty amount of Rs. 1,02,937/- representing the foreign currency notes.
13. Moreover, considering the amount involved, we are of the opinion that the same cannot be treated as having come from any unexplained source as the income declared by the assessee over the years is sufficient enough to explain the source of the foreign currency of Rs. 1,02,937/-.
14. Accordingly, in our view, the addition of Rs. 1,02,937/- deserves to be deleted. Accordingly, we do so.
Case Reference - Shri K. Raghava Reddy Vs Asst. Director of Income Tax (Inv).
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES "B", HYDERABAD
BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND
SHRI SAKTIJIT DEY, JUDICIAL MEMBER
I.T.A. No. 1903/HYD/2014
(Assessment Year: 2009-10)
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