Kalpana Misra vs ITO Ward 28(1)

The appeal in ITA No.5270/Del/2026 for AY 2019-20, arises out of the order of the Id National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as 'Id. CIT(A)', in short] dated 13.03.2026 against the order of assessment passed u/s 147 r.w.s. 144 r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 22.03.2024 by the Assessing Officer, Assessment Unit, Income Tax Department (hereinafter referred to as 'Id. AO').

The only effective issue to be decided in this appeal is as to whether the Id CIT(A) was justified in confirming the addition of Rs. 35,70,000 on account of unexplained investment in time deposits and interest income of Rs. 68,078 in the facts and circumstances of the instance case.

I have heard the rival submissions and perused the materials available on the chart. The assessee is a housewife. The ld AO based on the information available in the insight portal, sought to reopen the case of the assessee on the ground that there were certain time deposits made with the Axis Bank Limited by the assessee to the tune of Rs. 35,70,000 and interest income earned by the assessee to the tune of Rs. 68,078. Since no return of income was filed by the assessee, the ld AO concluded that the income of the assessee had escaped assessment because the aforesaid escaped income was much above the maximum amount not chargeable to income tax. After following the due procedure, notice u/s 148 of the Act stood issued to the assessee on 30.03.2023. In response thereto, no return of income was filed by the assessee. Thereafter, notice u/s 142(1) of the Act stood issued to the assessee and reassessment was completed on 20.03.2024 u/s 147 r.w.s. 144 r.w.s. 144B of the Act determining total income of the assessee at Rs. 36,38,078 comprising of the following additions:-

This action of the ld AO was upheld by the ld CIT(A).

The assessee before the ld CIT(A) submitted that entire monies for making investment in fixed deposits were received by the assessee from her husband, Mr. Anurag Mishra, through bank transfers. The bank statement of husband was also placed on record. It was submitted that husband of the assessee was employed with Axis Bank Limited in a big position drawing substantial amount of salary drawn to the tune of Rs. 38,14,521 (gross salary). These contentions and explanations with documentary evidences were not appreciated by the ld CIT(A). I find that assessee had placed on record the copy of income tax return acknowledgement of her husband, Mr. Anurag Mishra together with copy of Form No. 16 of Mr. Anurag Mishra and bank statements of Mr. Anurag Mishra. The bank statements of the assessee which is also held with Axis Bank were also placed on record. From the perusal of the bank statements of both Mr. Anurag Mishra and the assessee, it is very clear that the husband of the assessee had made periodic fund transfers by online mode to the assessee. The net amount received from husband during the FY 2018-19 was Rs. 29,67,406 (45,62,000 -15,94,594) and out of this, a sum of Rs. 27,01,300 was invested by the assessee in fixed deposits. First of all, there is no investment made by the assessee to the tune of Rs. 35,70,000 as stated by the ld AO in the assessment order. The assessee maintains flexi savings bank account wherein the surplus funds are periodically invested in fixed deposits and as and when there is a requirement for the assessee for effecting certain payments from the said flexi savings bank account, the fixed deposits are matured periodically and the proceeds credited in the savings bank account. On perusal of the entire bank statements of the assessee, it is very clear that no deposits to the tune of Rs. 35,70,000 was made by the assessee at all. Instead, the assessee had made deposits only to the tune of Rs. 27,01,300 which is sourced from monies received from husband by way of online transfer out of husband’s salary account. Hence, the entire source of making investment in fixed deposits stand properly established and explained and no part of it could be treated as unexplained warranting any addition in the hands of the assessee. Hence, the addition made on account of unexplained investment in fixed deposits to the tune of Rs. 35,70,000 is hereby deleted for the above mentioned reasons.

With regard to interest income of Rs. 68,078, the said interest had emanated out of funds received by the assessee from her husband as gift and not as loan. This fact is not disputed by the assessee before me. Hence, the interest income earned which were sourced out of monies received from husband need to be clubbed in the hands of husband in terms of Section 64 of the Act, which was not done in the instant case. Hence, in the interest of justice and fair play, I direct the ld AO to assess the sum of Rs. 68,038 on account of interest income to be clubbed and added in the hands of husband Mr. Anurag Mishra and delete the same in the hands of the assessee herein. Accordingly, the grounds raised by the assessee in that regard are allowed.

In the result, the appeal of the assessee is allowed in the above mentioned terms.