2021 (11) TMI 566 - ITAT BANGALORE - Income Tax

Head Note / Extract:
Addition u/s 69 - unexplained investment - HELD THAT:- Assessee has carried out the construction in two years namely in the years relevant to assessment year 2006-07 & 2007-08. Assessee has spent aggregate amount of ₹ 14.10 lakhs in two years namely ₹ 10.25 lakhs in assessment year 2006-07 & ₹ 3.85 lakhs in assessment year 2007-08. We notice that the Ld. CIT(A) has accepted the claim of salary savings to the extent of ₹ 10.25 lakhs in assessment year 2006-07. Hence, what is required to be explained during the year under consideration is the balance amount of ₹ 3.85 lakhs (₹ 14.10 lakhs (minus) ₹ 10.25 lakhs). It is also an undisputed fact that the assessee has declared salary income of around ₹ 20 lakhs during the year under consideration. Accordingly, we are of the view that there is no reason to disbelieve the claim of the assessee that the above said sum of ₹ 3.85 lakhs was spent out of salary savings. In view of the foregoing discussions, we are of the view that the claim of own funds of ₹ 14.10 lakhs deserves to be accepted. Accordingly, we modify the order passed by Ld. CIT(A) and direct the A.O. to delete the addition of ₹ 14.10 lakhs.