Case Law Details
Rammohan Kordale Vs ACIT (ITAT Bangalore)
Introduction: The Income Tax Appellate Tribunal (ITAT) of Bangalore recently made a significant ruling in the case of Rammohan Kordale vs ACIT. The tribunal declared that the money transferred between the assessee’s joint bank accounts cannot be classified as unexplained money under Section 69A of the Income Tax Act.
Analysis: In the proceedings, the AO had initially added an amount of Rs.1,82,952/- to the assessee’s income, categorizing it as unexplained money under Section 69A of the Income Tax Act, 1961. The AO argued that this amount, which had been deposited in a joint account, had no specified source. However, the assessee argued that this was merely an internal transfer between two of his joint accounts. Despite these arguments, the NFAC upheld the AO’s decision, leading the assessee to appeal at the ITAT. The ITAT, after considering the evidence presented, ruled in favor of the assessee. They concluded that as the money was transferred from the assessee’s own account, it couldn’t be considered as unexplained money under Section 69A.
Conclusion: The ruling by ITAT Bangalore provides clarity on the classification of joint account transfers under the Income Tax Act. In a significant decision for assessees with joint accounts, the ITAT has asserted that internal transfers between these accounts cannot be considered unexplained money. This ruling helps in assuring taxpayers that they won’t be wrongfully charged under Section 69A for internal transfers in their joint accounts, which marks a significant development in the realm of income tax legislation.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
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