Deepali Kapoor Vs ITO (ITAT Hyderabad)
Section 68 Cannot Apply to Household Support from Husband; Second Credit Explanation Contradictory—₹8.49 Lakh Deleted, ₹17.80 Lakh Remanded
The Assessee filed return for AY 2022-23 declaring NIL income. During scrutiny, AO noticed ₹2.80 crore credited in her capital account. The Assessee stated it was received from her husband. On verification, AO found only ₹2,62,20,000 actually received, leaving an unverified difference of ₹17,80,000, which was added as unexplained cash credit u/s 68. AO also added ₹8,49,650 received from husband towards household expenditure, treating it again as unexplained u/s 68. Total addition: ₹26,29,650. CIT(A) sustained both additions.
Before Tribunal, the Assessee clarified two issues:
(1) ₹8,49,650 – Household Expenditure from Husband
Assessee submitted that her husband (earning ₹61.62 lakh) transferred ₹8.49 lakh to her for routine household expenses. Tribunal held:
- Such family transfers are ordinary domestic support,
- Not in the nature of income-bearing credits,
- Not loans, deposits or capital-forming receipts,
- Hence section 68 does not apply at all.
Since there was no doubt about husband’s creditworthiness and the nature of transaction, Tribunal deleted the entire addition of ₹8,49,650.
(2) ₹17,80,000 – Capital Account Credit Difference
The Assessee gave three different explanations at three stages:
1. Before AO: amount received from husband,
2. Before CIT(A): amount from fixed deposits,
3. Before ITAT: part of professional receipts of ₹19,50,000 offered under section 44ADA.
She relied on deposit of ₹17,55,000 from Cyber Optic (bank entry dated 06.01.2022). Tribunal noted that:
