Case Law Details
Shanthi R. Pai Vs ITO (ITAT Bangalore)
AO made addition of Rs.26,79,000/- on account of cash deposits. Assesee stated that she is a home maker & her husband was employed overseas as Chartered Accountant serving overseas from 1975 to 2008. He used to send money from abroad and also invested in Term Deposits in India in his name and her name. Regarding the cash deposits, assessee stated that sources for the deposit might be interest free loans, which were given by her husband to his friends and relatives have been received back. But the explanation was not supported by any evidence. Assessee filed Medical Certificate of her husband suffering from Dementia. AO held that explanation given by the assessee cannot be accepted and. Entire amount of, Rs.26,79,000/- is treated as unexplained money deposited into bank account.
Same submissions were made on first appeal & NFAC observed that in the absence of any supporting document/evidence, the contention of the assessee is difficult to accept. NFAC gave a reasonable allowance of Rs.5,00,000 for withdrawals and past savings, in view of economic status of the assessee & her husband. Addition was restricted to Rs.21,79,000.
On further appeal, Tribunal held that the assessee is not able to discharge the burden cast upon her to prove the source of deposit of money to the bank accounts to the extent of Rs.21.79 lakhs. Tribunal noted that the assessee only pleaded that the money has been deposited by her husband and he is suffering from dementia as there was a memory failure. The assessee cannot escape by stating that the money has been deposited by assessee’s husband who was suffering from Dementia disorder and continued with that illness and there was memory failure since 2016 and was unable to recall or memorize the past transaction which he did in past. This explanation cannot be satisfactory and no benefit could be given. It is a primary obligation on the part of the assessee to prove the source of credit in to assessee’s bank account, which is not explained in this case.
Tribunal held that NFAC is very reasonable in sustaining only an addition of Rs.21.79 lakhs out of multi crores of rupees deposited into her bank account.
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