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2017 (6) TMI 399 - AT - Income TaxAddition on account of deposits made in the bank account - assessee to explain the source had filed the confirmation from the family members of the assessee but the AO doubted the confirmation by treating the same as a document of settlement between the family members - Held that:- The reason of doubting the said evidence by the AO is that this document pertains to the transaction of giving advance by the assessee to the family members in the Financial Year 2004-05 and thereafter receiving the same back in the Financial Year 2010-11 has been written on a stamp paper purchased on 28.02.2014. Thus it is clear that the AO has misunderstood the document itself contents of which clearly explains and narrates both incidents of advance given by the assessee in the year 2004-05 and the same was refunded to the assessee by the family members in the Financial Year 2010-11. The purpose of giving this confirmation is only for the satisfaction of the taxing authority and not for a proof of settlement to the family members. Accordingly rejecting the said confirmation at the threshold without further examination and verification of the veracity of the confirmation by conducting a proper enquiry is not justified on the part of the AO. Further it is settled proposition of law that in case of deposits in bank the corresponding withdrawal for subsequent deposits can be considered as a proper source of fund in the hand of the assessee. Therefore in case whether there are multiple transaction of deposit and withdrawal on regular basis then only peak credit can be considered for the purpose of making addition on this account. - Decided in favour of assessee.
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