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Facts
The assessee, engaged in derivative trading, did not file an income tax return for AY 2013-14. Proceedings were initiated under Section 147 of the Income Tax Act. The AO noted a cash credit of ₹.6,62,229/- which was drawn from the assessee's son's account. The assessee claimed these funds were from his son's salary savings and he was authorized to operate the account.
Held
The Tribunal held that the addition made by the Assessing Officer and confirmed by the CIT(A) was not justified. Evidence, including the son's salary earnings and bank statements, indicated that the son had sufficient sources to deposit into his account, and the assessee was authorized to withdraw funds.
Key Issues
Whether the addition of ₹.6,62,229/- as unexplained money under Section 69A of the Income Tax Act is justified when the assessee provided evidence of the source of funds from his son's authorized bank account.
Sections Cited
147, 148, 69A
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi&
Year: 2013-14 Subramanian, Vs. The Income Tax Officer, 78, Co-Operative Colony, Vilankurichi, Ward 1(4), Coimbatore 641 035. Erode. [PAN:CERPS9236R] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri R. Sivaraman, Advocate (Virtual) ��थ� की ओर से/Respondent by : Ms. Samatha M. Mullamudi, JCIT सुनवाई की तारीख/ Date of hearing : 08.10.2025 घोषणा की तारीख /Date of Pronouncement : 24.10.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 23.05.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2013-14.
The assessee raised 6 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made under section 69A of the Income Tax Act, 1961 [“Act” in short] by the Assessing Officer.
3. The assessee is an individual and engaged in the business of derivative trading in stock exchange and also earns interest income. The Assessing Officer noted that the assessee has done sales of futures (derivative) in a recognized stock exchange of ₹.2,26,65,890/- during the FY 2012-13 relevant to the AY 2013-14 and did not file his return of income. We note that the Assessing Officer initiated proceedings under section 147 of the Act by issuing notice under section 148 of the Act on 18.09.2019 after following due procedures. In response to the notice under section 148 of the Act, the assessee filed his return of income on 22.03.2021 declaring total income of ₹.95,420/-. On perusal of the details furnished by the assessee, the Assessing Officer noted from the cash flow statement and details of source of investments in the shares during the year under consideration that an amount of ₹.6,62,229/- was drawing from his son’s account Mr. Prasanna Subramanian held with ICICI Bank, Erode and subsequently deposited in his Indian Overseas Bank account. Thereafter, the assessee made drawings through ATM and cheque. The source of the cash deposits of ₹.6,62,229/- in his Indian Overseas Bank accounts remains unexplained. The Assessing Officer noted that the assessee’s son’s account is a single account and accordingly, asked the assessee to furnish supporting documentary evidence to clarify whether the account maintained by assessee’s son with ICICI Bank is a joint account and also submit copy of confirmation of account from Shri Prasanna Subramanian to justify the claim of the assessee. After considering the submissions of the assessee, since the assessee failed to give any explanation about the nature and source of total cash credits of ₹.6,62,229/-, the Assessing Officer treated the same as unexplained money under section 69A of the Act and added to the total income of the assessee. The ld. CIT(A) confirmed the addition made by the Assessing Officer.
The ld. AR Shri R. Sivaraman, Advocate submits that the assessee has given full details to the Assessing Officer, but, no consideration was given by the Assessing officer and drew our attention to page 13 of the paper book. Further, he drew our attention to page 14 of the paper book and submits that son of the assessee was in USA since 2010 and left in 2017. The assessee’s son used to deposit his salary savings to his SB account in ICICI bank Erode Branch. The ld. AR submits that the assessee’s son authorized the assessee to operate the said ICICI Bank account and accordingly, the assessee made drawings from the said ICICI bank through cheque and ATM card and used for his own purposes. The ld. AR argued that the Assessing Officer and the ld. CIT(A) did not give any consideration to the said confirmation as well as affidavit reiterating the same.
The ld. DR Ms. Samatha M. Mullamudi, JCIT relied on the order of the ld. CIT(A) and prayed to dismiss the grounds of appeal raised by the assessee.
6. Heard both the parties and perused the material available on record. We note that the Assessing Officer completed the assessment by holding that the assessee failed to give any explanation about the nature and source of total cash credit of ₹.6,62,229/- and added the same under section 69A of the Act on account of unexplained money. The ld. CIT(A) confirmed the same by recording his reasons vide para 7 of the impugned order. Further, it is noted at page 15 of the paper book, which is a letter dated 18.09.2021 issued by the ICICI Bank stating that the Mandate Holder of ICICI Bank is assessee, which clearly supports the submissions of the ld. AR in stating that assessee’s son used to deposit his salary saving from years to his bank account in India and the assessee is a Mandate Holder used to withdraw and use the same for his purposes. We find the statement of ICICI Bank of the assessee is furnished at page 18 to 21 of the paper book, wherein, it is noted that the deposits were made and consequently withdrawal are also made. We find that the total withdrawals are at ₹.6,36,670/- made at different intervals on different days, which are clear cash withdrawals and ATM withdrawals. Further, page 22 & 23 of the paper book is the bank statement of the assessee of State bank of India, which clearly shows the deposits by the assessee in his account. Having furnished the same before the authorities below, no consideration was given about the nature and source of impugned addition as rightly pointed out by the ld. AR. Further, at page 6 & 7 of the paper book, the ld. AR placed on record the earning salary of assessee’s son in USA for which he drew our attention at Col. 1 about the wages, etc. to an extent of $1,02,739.03 for 2012, which clearly shows that assessee’s son has sources to deposit in his account. Thus, the addition made by the Assessing officer and confirmed by the ld. CIT(A) is not justified and it is deleted. Thus, the grounds raised by the assessee are allowed.
In the result, the appeal filed by the assessee is allowed. Order pronounced on 24th October, 2025 at Chennai.