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Facts
The assessee, an individual, had not filed her income tax return for A.Y. 2019-20. Following information regarding property purchase and TDS, the AO issued a notice under Section 148. The AO completed the assessment under Section 147, making an addition of Rs.12,50,400/- as unexplained money under Section 69A and disallowing deductions under Chapter VIA. The CIT(A) partly allowed the appeal, deleting some additions but sustaining Rs.2,10,000/- under Section 69A and Rs.2,22,527/- of Chapter VIA disallowance.
Held
The Tribunal deleted the sustained addition of Rs.2,10,000/- under Section 69A, accepting it as past savings from both the assessee and her husband, who are government employees. However, the Tribunal upheld the CIT(A)'s decision to allow only 50% deduction of housing loan interest under Section 24(b) as the property was jointly purchased. The Tribunal also confirmed the CIT(A)'s restriction of Section 80C deduction to Rs.1,08,928/- due to lack of evidence from the assessee for the full claim.
Key Issues
Whether the sustained addition of Rs.2,10,000/- under Section 69A for unexplained cash deposit was justified; Whether the 50% restriction on housing loan interest deduction under Section 24(b) was correct; Whether the restriction of deduction under Section 80C was valid due to lack of evidence.
Sections Cited
147, 148, 69A, 24(b), 80C, Chapter VIA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
अपीलाथ� की ओर से/Appellant by : Mr. S. Kumarasubramanian, Advocate ��थ� की ओर से/Respondent by : Ms. Sita Krishnamoorthy, J.C.I.T. सुनवाई की तारीख/Date of Hearing : 09.06.2025 घोषणा की तारीख/Date of Pronouncement : 12.06.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
This appeal by the assessee is filed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2019-20, dated 17.12.2024.
The grounds raised
by the assessee are as follows:
1. The order of the Commissioner (Appeals) is opposed to law on the facts and in the circumstances of the case.
2. The CIT(A) erred in allowing appeal in part only and sustaining addition of Rs.2,10,000/- under Section 69A and Rs.1,78,593/- under Chapter VIA.
:-2-: ITA. No.:565/Chny/2025 3. It is submitted that the assessee has explanation and evidences for the above confirmation of the addition. 4. For these and such other grounds that may be adduced at the time of hearing, it is prayed that the order of the CIT(A) be remitted back to the file of the CIT(A) for revisiting the issue afresh and for passing a fresh order and oblige.
The brief facts of the case are that the assessee is an individual had not filed her return of income for the A.Y. 2019-20. As per the information that the assessee had purchased immovable property at Thiruvottiyur along with the TDS statement of employer i.e. Govt. Stanley Hospital. In response to notice u/s.148 the assessee filed her return of income on 29.04.2023 declaring total income of Rs.1,88,100/-. Later the AO issued statutory notices to the assessee for scrutiny assessment and the assessee filed certain details. The assessee submitted that the salary income earned was Rs.6,11,976/- during the impugned A.Y. 2019-20. Further the assessee submitted that she had jointly purchased a house property along with her husband for Rs.43.50 Lakhs, for which the assessee had borrowed Rs.32.00 Lakhs from LIC Housing Finance ltd and the balance amount out of borrowings from relatives and from their past savings. The assessee filed the bank statement before the AO. On perusal of the submissions of the assessee, the AO find that the assessee did not file any evidence in support of her explanation with reference to source of cash deposits made and hence the assessment was concluded u/s.147 of the Act dated 18.02.2024, by making an addition of Rs.12,50,400/- u/s.69A of the Act as unexplained money along with disallowing the claim of deduction Chapter VIA to the tune of Rs.4,02,160/-.
Aggrieved by the order of the AO assessee preferred an appeal before the ld.CIT(A),NFAC, Delhi. Before the ld.CIT(A) the assessee filed the details of :-3-: ITA. No.:565/Chny/2025 the borrowings along with their Aadhar and PAN to the tune of Rs.10,40,000/- and the balance amount of Rs.2,10,000/- has been claimed as past savings of the family. Further, the assessee furnished the details and certificate of housing loan interest in support of the other claims. On perusal of the submissions of the assessee, the ld.CIT(A) deleted the additions to the extent of Rs.10,40,000/- as explained source of cash deposit and sustained the balance amount of Rs.2,10,000/- as unexplained money for want of evidence. Further, in respect of other deductions claimed by the assessee, the ld.CIT(A) deleted the disallowance of Rs.1,79,633/- and the balance disallowance of Rs.2,22,527/- was sustained by passing an order dated 17.12.2024.
Aggrieved by the order of the ld.CIT(A) the assessee preferred an appeal before us.
The Ld.AR for the assessee submitted that both the assessee and her husband has been working in Government organization and the cash deposited to the tune of Rs.2,10,000/- was out of our past savings and hence prayed for deleting the addition of the same, which was sustained by the ld.CIT(A). The ld.AR further submitted that the house property was purchased jointly with her husband and the certificate of interest payment was furnished before the ld.CIT(A) during the appellate proceedings. However, the ld.CIT(A) has erred in allowing only 50% of the interest payment as deduction u/s.24(b) of the Act and hence prayed for allowing the entire amount of interest payment as deduction. Further, ld.AR submitted that the assessee is eligible for deduction u/s.80C of the Act to the extent of Rs.1,50,000/- and therefore prayed for allowing the deduction balance amount of Rs.41,072/-.
:-4-: ITA. No.:565/Chny/2025
The Ld.DR supported the orders of the lower authorities and prayed for dismissing the appeal of the assessee.
We have heard rival submissions and perused the materials on record and gone through the orders of the lower authorities. It is admitted that both the assessee and her husband are employed in the Government organization. The assessee had jointly purchased the house property with her husband for consideration of Rs.43,50,000/- during the impugned assessment year and borrowed an amount of Rs.32.00 Lakhs from LIC Housing finance ltd. The AO had made an addition of an entire amount of cash deposit into her bank account of Rs.12,50,400/- as unexplained money u/s.69A of the Act. However, the ld.CIT(A) deleted Rs.10.40 Lakhs as explained source of cash deposit and sustained the addition of balance Rs.2.10 Lakhs. We note that both the assessee and her husband are employed in Govt. organisations and having income form salaries from their service. Hence, the explanation given by the assessee that the amount of Rs.2.10 lakhs cash deposit was made out of past savings is acceptable. In the peculiar circumstances of the case, we are inclined to delete the addition of Rs.2.10 lakhs, by setting aside the order of the ld.CIT(A) by allowing the related grounds of appeal of the assessee.
In respect of the deduction claimed u/s.24(b) of the Act, the assessee herself stated that the property has been purchased jointly with her husband. Hence, the 50% deduction of interest on housing loans allowed by the ld.CIT(A) holds a merit. Therefore, we do not find any infirmity in the order of the ld.CIT(A) in confirming the disallowance of 50% of interest on housing loan in :-5-: ITA. No.:565/Chny/2025 the hands of the assessee. Thus, we dismiss the related grounds of appeal filed by the assessee.
The next ground of the assessee is in respect of disallowance of deduction claimed u/s.80C of the Act by restricting the amount to Rs.1,08,928/- as against the claim of Rs.1,50,000/-. We find that the assessee has not filed any evidence in support of the claim of deduction either before the ld.CIT(A) or before us. In the present circumstances of the case, we are confirming the order of the ld.CIT(A) in restricting the deduction to Rs.1,08,928/- by dismissing the related grounds of appeal raised by the assessee. Since, the ld.AR has not pressed other grounds of appeal, we refrain from adjudicating the same.
In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the open court on 12th June, 2025 at Chennai.