2013 (12) TMI 634 - AT - Income Tax

Addition u/s 68 The assessee s bank account has been credited with Rs. 44,24,500 and later on this amount was transferred to the account of directors - Held that - Following decision in assessee s own case for the A.Y. 2007-08 The assessee was merely an employee - The amount was deposited in his bank account by the directors or family members of the business concern The amount was transferred to the bank account of the directors of the family concern - The assessee was merely a benamidhar of the bank account in his name - The money deposited belonged to the directors or family members of the business concern The real owners of the money were directors or the family members of the business concern - The facts and circumstances are identical with the facts of the assessee for the earlier A.Y.2007-2008 - The issue is restored to the file of the AO to verify the entries in the bank account of assessee with the bank accounts of S/Shri Chimanlal Jamnadas Sheth and Ketan Sheth or any other family members of the directors of the business concern.

Summary

Issues:
Validity of assessment order challenging huge addition under section 68.

Analysis:
The appeal was against the CIT(A)'s order dated 10.10.2012 for the assessment year 2009-2010. The main contention was the validity of the assessment order due to a significant addition of Rs.44,24,500 under section 68. The assessee, an employee of a family business, argued that the credited amounts in their bank account were transferred to family members of the business directors. Similar additions in the previous assessment year were reconciled, leading to deletion of the entire addition. The Tribunal dismissed the Revenue's appeal for the earlier year due to tax effect. The assessee submitted a reconciliation statement for the current year, urging no sustained addition. The Tribunal reviewed documents and previous orders, noting that the addition was deleted in the earlier year as the amounts were transferred to the directors' bank accounts. The assessee claimed to show the transfers from their account to the directors' accounts, treating their account as benami. The Tribunal found the assessee merely acted as a benamidhar, with the real owners being the directors or family members of the business. Therefore, any addition should be made in the hands of the actual owners. The issue was remanded to the AO to verify transfers and make additions accordingly, providing both parties a fair opportunity.

The Tribunal concluded by allowing the appeal for statistical purposes.