ITAT grants additional relief to assessee on unexplained income viewing her senior citizen status and homeopathy practice

ITAT grants additional relief to assessee on unexplained income viewing her senior citizen status and homeopathy practice

Directs the assessing officer to reduce the income amount

The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) has provided an additional relief of Rs. 7 lakh to the assessee with respect to the cash balance classified as unexplained income. It also considered her 30 years of homeopathy practice, previous tax returns, and status as a senior citizen.

The assessee filed her Income Tax Return (ITR) for the Assessment Year 2015-2016, declaring a total income of Rs. 3,05,160.

During the course of the assessment, the Assessing Officer (AO) observed that after the demonetization period, the assessee showed a cash balance of Rs. 16,49,312. Accordingly, the AO treated the cash balance of Rs.13,44,155 as unexplained cash credits (after giving credit of Rs.3,05,160 declared by the assessee).

The AO held that it constituted unexplained income of the assessee, who filed an appeal before the Commissioner of Income Tax (Appeals). The CIT(A) dismissed her appeal on the ground that she had not been able to explain the source of the cash balance declared in the ITR.

However, the tribunal took note of the assessee's 66 years of age and her extensive experience practicing homeopathy. The assessee also provided a Certificate of Registration as a homeopathic doctor issued by the State Homeopathic Council of Madhya Pradesh.

ITAT also observed that the assessee had filed the tax returns for the Assessment Years 2016-2017 and 2017-2018, and the ITR had been accepted, after scrutiny.

The tribunal held, “Considering the aforesaid facts, in the interest of justice, further relief of Rs.7 lakhs is granted to the assessee, and the AO is directed to reduce the income by the aforesaid amount.”