The Pune Bench of the Income Tax Appellate Tribunal (ITAT) held that cash deposited by a husband in his wife’s bank account cannot be separately added to the wife’s income under Section 69A of the Income Tax Act when the husband has sufficient disclosed income and accepts that the money was deposited out of his income.
Gauri Jayendra Navale had filed her income tax return declaring total income of Rs. 38,02,630. During assessment proceedings, the Assessing Officer made an addition on cash deposited in her bank account after rejecting her explanation that the amount represented a gift received from her husband, Jayendra Navale.
The AO considered the gift unreasonable and afterthought and treated the cash as unexplained money under Section 69A. The CIT(A)/NFAC upheld the addition.
The dispute was connected with the separate appeal of her husband. Jayendra had declared total income of Rs. 93,67,280 for the same assessment year.
He explained that he had earned commission income from Samruddha Jeevan Multistate Multipurpose Co-Op. Society Ltd. and had gifted money to his wife. His Profit and Loss Account showed Rs. 91,74,500 under “sales” which he claimed represented commission income. He also relied on his cash book and gift deed.
The assessee’s counsel argued that the money deposited in wife’s account came from her husband’s disclosed income and could not again be taxed in her hands as unexplained money.
The revenue counsel relied on the orders of the AO and CIT(A)/NFAC. In the husband’s case, they argued that no confirmation from the co-operative society was produced and no TDS had been deducted on the alleged commission income.
The two-member bench comprising Vice President R.K. Panda and Judicial Member Astha Chandra observed that Jayendra had sufficient income to make the gift to his wife. The tribunal had already accepted his explanation that the commission income was disclosed and that the gift came from his available income.
The tribunal held “Making addition in the hands of the wife is not justified since the husband has accepted to have deposited the money.” The tribunal set aside the CIT(A)/NFAC order and directed the Assessing Officer to delete the addition. Both the husband’s and wife’s appeals were allowed.
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Jayendra Rohidas Navale vs ITO
CITATION : 2026 TAXSCAN (ITAT) 1249Case Number : ITA No.111/PUN/2026Date of Judgement : 14 August 2026Coram : R. K. PANDA And ASTHA CHANDRACounsel of Appellant : Pramod S ShingteCounsel Of Respondent : Rajesh Gawali
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