Pune ITAT rules husband’s disclosed income not taxable in wife’s hands

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has ruled that Rs 71.56 lakh deposited in a wife's bank account cannot be taxed as unexplained income when the husband had already disclosed and paid tax on the amount. The order, pronounced on 14 August, came in the case of Gauri Navale and her husband Jayendra Navale for assessment year 2016-17.

The Assessing Officer had treated the deposit as unexplained money under Section 69A after Gauri said it was a gift from her husband. The officer questioned the source because the paying society had not deducted tax at source. The ITAT, however, held that Jayendra's financial records showed sufficient income and capital to make the gift, and taxing the same amount again would amount to double taxation.

The tribunal also deleted a protective addition of Rs 71.56 lakh made against Jayendra, noting that the commission income had been disclosed and taxed. The ruling reinforces that income moved between family members is not automatically taxable in the recipient's hands if the source is already explained.