Amount received as consequence of divorce cannot be held as unexplained cash credit u/s 68

Sarita Konda Vs PCIT (ITAT Raipur)

ITAT Raipur held that amount received as a consequence of divorce from the ex-husband could not be held as an unexplained cash credit u/s.68 of the Act, and accordingly cannot be brought to tax u/s.115BBE of the Act.

Facts- During assessment proceeding, AO made additions of (i) addition of amount received by the assessee over the year in consequence to divorce from her ex-husband : Rs.16,31,000/- ; and (ii) amount received towards death claim of her ex- husband : Rs.15,02,867/-.

Thereafter, on a perusal of the record, the Pr. CIT was of the view that the A.O had erred in not treating both the aforesaid additions, viz. (i) addition of the amount received by the assessee over the year in consequence of divorce from her ex-husband: Rs.16,31,000/-; and (ii) amount received towards death claim of her ex-husband : Rs.15,02,867/-, as unexplained credits u/s 68 of the Act, and subjecting the same to tax in her hands under Section 115BBE of the Act. Accordingly, the Pr. CIT vide his order passed u/s.263 of the Act held the order passed by the A.O as erroneous in so far it was prejudicial to the interest of the revenue and directed the A.O to frame a fresh assessment after affording a reasonable opportunity of being heard to the assesse.

Being aggrieved, assessee has preferred the present appeal.

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