2023 (9) TMI 327 - AT - Income Tax

Addition u/s 69 - unexplained investment - As per assessee he fully explained since the same has been made from past savings as well as tax-free RBI Relief bonds interest income and hence, it needs to be deleted - HELD THAT - As assessee has explained the source of investment with help of the bank statement, wherein the assessee has explained the source of the investment made by him and exempted interest received - The assessee need not prove the source of the source, however in this case, the assessee has proved the source of the source also about the disputed amount - Therefore, considering these facts,we delete the addition - Decided in favour of assessee.

Summary

Issues involved:
The appeal pertains to Assessment Year 2008-09 and challenges the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, arising from an assessment order u/s 144 r.w.s. 147 of the Income Tax Act, 1961.

Grounds of Appeal:
1. The appeal challenges the legality of the order passed by the Assessing Officer, claiming it is based on presumptions.
2. Dispute over addition of Rs. 2,48,603 u/s 69 as unexplained investment, which the assessee argues is explained by past savings and tax-free RBI Relief bonds interest income.
3. Disagreement with the levy of penal interest u/s 234A, 234B, and 234C of the Act.
4. Request for the flexibility to modify any grounds of the appeal.

Facts and Assessment:
The assessing officer noted investments made by the assessee during FY 2007-08 totaling Rs. 23,98,603. The officer sought explanations for the source of these investments, but the assessee did not respond. Consequently, the assessment order u/s 144 r.w.s. 147 was passed, adding Rs. 23,98,603 as unexplained investment.

Appeal and Decision:
The assessee appealed to the ld. CIT(A), who partially deleted the addition after the assessee provided evidence for Rs. 21,50,000. The remaining Rs. 2,48,603 addition was sustained. The Tribunal heard arguments from both sides, with the assessee justifying the exempted interest as disclosed in the return of income. The Tribunal found the source of the disputed amount was adequately explained with supporting bank statements, leading to the deletion of the Rs. 2,48,603 addition.

Conclusion:
The Tribunal allowed the appeal, deleting the addition of Rs. 2,48,603.