CIT Vs Vinodkumar Hiralal Raja (Gujarat High Court)
Summary: The Gujarat High Court dismissed the Revenue’s Tax Appeal under section 260A of the Income Tax Act, 1961, challenging the Income Tax Appellate Tribunal, Rajkot Bench order dated 20.12.2023 for Assessment Year 2006-07. The Tribunal had deleted an addition of Rs.9,15,56,045/- made under section 69 as unexplained investment and an addition of Rs.10 lakh made under section 68 as unexplained cash credits.
The assessee had invested Rs.10,61,58,177/- in Mutual Funds during the relevant year. Following notice under section 148 dated 12.03.2013, he filed a return declaring total income of Rs.2,21,271/- and claimed exempt dividend income of Rs.33,22,644/-. The Assessing Officer completed reassessment under section 143(3) read with section 147 on 31.03.2014 at Rs.9,28,77,320/-, including the two disputed additions. The assessee’s case was that deposits in his bank accounts were primarily sourced from funds transferred from abroad by his son and sister.
The CIT(A) confirmed the additions on 22.12.2017, holding that the assessee had failed to establish the genuineness of the transactions and the source of funds with corroborative evidence. The Tribunal, however, relied upon several decisions including Tarun Kumar Sarkar, Shri Vijaykumar Vasantbhai Patel, Iqbal Ismail Virani, Hemant Mansukhlal Pandya, Madhusudan Rao and Smt. Susila Ramasamy. It found that the amounts received in the assessee’s NRE account had been transferred by his son in the U.K. through wire transfer and applied the same reasoning to the funds transferred by his sister. The Tribunal held that, on the facts, no addition was sustainable under section 69 and also deleted the Rs.10 lakh section 68 addition.
