ITAT Quashes Rs 11 Lakh Addition Quashed Over Ignored Evidence and Genuine Medical Withdrawals

The ITAT Ahmedabad allowed the appeal of a HUF, holding the Rs 11 lakh addition invalid since proper evidence of withdrawals and the mother’s illness was furnished. It found CIT(A) failed to examine records, and bank details clearly supported the assessee’s explanation.

The assessee, Sumatibhai M. Shah, is a Hindu Undivided Family (HUF) that earns its income from other sources, capital gains and businesses. The assessee filed its income tax return (ITR) for the Assessment Year 2017-18, declaring an income of Rs 2.30 lakh. The case got selected for investigation. As a result of the probe, an addition amounting to Rs 11 lakh was made to the assessee’s income.

The aggrieved assessee filed an appeal before the ITAT Ahmedabad. During the hearing, the assessee claimed that enough money was withdrawn from the bank for the needs of the whole HUF family and all the relevant details were also duly submitted to the CIT(A) as per Rule 46A, but the same were ignored. Further claimed that the withdrawals in question were made due to the illness of her mother.

When the tribunal analysed the facts of the case, it noted the assessee had provided enough and proper details (including cash book and bank statements from Citibank and the State Bank of India) in support of her mother’s illness. Moreover, the total withdrawals from assessment years 2014-15 to 2017-18 were also clearly shown. Also, all the impugned withdrawals aligned with the bank records, including those of HUF members. Meaning, it was explicit that the CIT(A) had not properly examined the documents. Therefore, the addition made by the tax authorities is not valid. As a result, the assessee’s appeal is allowed.