SUDHIR RAMCHANDRAJI MANTRI,JALNA vs. ASSESSMENT UNIT, INCOME TAX DEPARTMENT, JALNA

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ITA 526/PUN/2025Status: DisposedITAT Pune03 September 2025AY 2022-23Bench: DR.MANISH BORAD (Accountant Member), SHRI VINAY BHAMORE (Judicial Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's salary was not fully encashed, and the accumulated amount was earning interest. Since all transactions were recorded in the books and the source of investment was explained, the addition made by the AO under Section 69 of the Act was deleted. The CIT(A)'s finding was set aside.

What were the facts?

The assessee, an individual, declared income for AY 2012-13 and was selected for scrutiny. The AO observed that the assessee received interest income from his wife's proprietorship firm, M/s. Sudhir Agencies, where the assessee was an employee. The AO made an addition of Rs.44.00 lakh for unexplained investment.

What were the issues?

Whether the addition of Rs.44.00 lakh for unexplained investment is justified when the interest income arose from accumulated salary which was explained and recorded in the books.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 144B,Section 44AD,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE

Before: DR.MANISH BORAD & SHRI VINAY BHAMORE

For Respondent: Shri Akhilesh Srivastva
Hearing: 30.07.2025Pronounced: 03.09.2025

आदेश / ORDER

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

1.

The captioned appeal at the instance of assessee pertaining to A.Y. 2022-23 is directed against the order dated 11.12.2024 of National Faceless Appeal Centre (NFAC) Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 18.03.2024 passed u/s.143(3) r.w.s144B of the Act.

2.

When the appeal was called for, none appeared on behalf of the assessee. We therefore proceed to adjudicate the appeal with the assistance of ld. DR and the material available on record.

4.

Brief facts of the case are that the assessee is an individual and for A.Y. 2012-13 income of Rs.17,04,000/- declared in the return e-filed on 28.07.2022. Case selected for scrutiny through CASS. During the course of assessment proceedings, ld. Assessing Officer (AO) observed that assessee has received interest of Rs.5,15,257/- from Chhaya Sudhir Mantri. Ld. AO was not satisfied with the source of investment on which interest income has been received and concluded the proceedings making addition of Rs.44.00lakh in the hands of assessee towards unexplained investment,

5.

Aggrieved assessee preferred appeal before ld.CIT(A) but failed to succeed. Now the assessee is in appeal before this Tribunal.

6.

We have heard ld. DR and perused the record placed before us. Addition for unexplained investment of Rs.44.00 lakh has been raised before us by the assessee. We observe that the assessee is employed with M/s. Sudhir Agencies. Proprietor Chhaya Mantri who is assesssee’s wife and for the year under consideration salary of Rs.13.00 lakh has been received. In the preceding years salary of Rs.7.00 lakh, Rs.15.00 lakh and Rs.12.00 lakh has been received as salary and duly offered to tax in the income-tax return. However, the salary given to the assessee is not encashed fully within the year and major portion of salary gets accumulated in the books of M/s.Sudhir Agencies, of which assessee’s wife Chhaya Sudhir Mantri is sole proprietor.

Sudhir Ramchandraji Mantri Now such accumulated balance from salary receivable, the assessee kept on receiving interest year by year. For the year under consideration, assessee has received interest on such accumulated balance at Rs.5,37,871/- . Ld. AO has raised suspicion about the source of investment on which such interest income has been received. We fail to find any justification in the action of the AO as well as the finding of ld.CIT(A) because the assessee has been showing the salary income on year to year basis. Accumulated amount of salary income available with M/s.Sudhir Agencies is also giving interest income on year to year basis. All transactions are duly recorded in the books. M/s.Sudhir Agencies has declared income u/s.44AD of the Act. Under these given facts and circumstances, since the source of investment giving raise to the interest income has been duly explained, we fail to find any justification in the addition of Rs.44.00 lakh made u/s.69 of the Act. The same is hereby deleted. Finding of ld.CIT(A) is set aside the grounds of appeal raised by the assessee on merits are allowed. Remaining ground are either general/consequential in nature which need no adjudication.

7.

In the result, the appeal filed by the assessee is allowed.

Order pronounced on this 03rd day of September, 2025.

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