Dhanasekaran Ramasamy Vs ITO (ITAT Chennai)
ITAT Chennai held that the amount gifted by the brother cannot be treated as unexplained. Accordingly, addition u/s. 69 of the Income Tax Act deleted to that extent. In the result, the appeal is partly allowed.
Facts- The assessee is an individual and did not file the return of income for AY 2013-14. AO received an information from the office of the DIT (I & CI) Salem that the assessee has contributed an amount of Rs. 74,35,000/- as his share in the purchase of two properties on behalf of the partnership firm M/s Madhuraj Associates in which assessee is one of the partners. Since the assessee did not file the return of income, the AO reopened the assessment by issuing notice u/s. 148 of the Act. Since the assessee did not produce any supporting evidences, the AO proceeded to treat the entire amount of Rs. 74,35,000/- as unexplained investment u/s. 69 of the Act.
CIT(A) confirmed the addition to the tune of Rs. 42,35,000/-. Being aggrieved, the present petition is filed.
Conclusion- Held that with regard to the money received from the brother, we notice that the CIT(A) has given a finding that the bank statements reflect the amount given to the assessee but the same is held to be non-genuine for the reason that there were cash deposits prior to the transfer of money to the assessee. In our view this cannot be the reason for treating the source in the hands of the assessee as unexplained since the banks statement of the brother evidences the money being given to the assessee. Accordingly, we are of the view that the amount gifted by the brother cannot be treated as unexplained.
