2015 (1) TMI 361 - AT - Income Tax

Addition of unexplained investment in bank account u/s 69 - Held that - Following the decision in Smt. Premilaben A. Jariwala, (Prop. Vigneshwar Fabrics) Versus Asstt. Commissioner of Income, Central Circle-4, Surat 2014 (12) TMI 837 - ITAT AHMEDABAD wherein it has been rightly held that the contentions of the assessee is correct that these deposits were made in the bank account during the AY 2005-06 and therefore addition cannot be made for unexplained investment thus, the addition of ₹ 15,73,515/- in the case of Shri Amit N. Kapadia and ₹ 20,55,587/- in the case of Smt. Geetaben N. Kapadia is set aside by holding that the deposits were made in the bank accounts during the AY 2005-06 and therefore addition cannot be made during the year under appeal for unexplained investment - in the case of Smt. Geetaben N. Kapadia, the Authorized Representative of the assessee has made absolutely no submissions for the additions made in the following bank account No. 0041-093100-001, thus, the order of the CIT(A) in respect of the addition of ₹ 2,02,067/- is upheld Decided in favour of assessee, Shri Amit N. Kapadia and partly in favour of other assessee.

Summary

Issues:
- Appeals against orders of Commissioner of Income Tax (Appeals) dated 13.12.2010.
- Addition made by Assessing Officer on account of unexplained investment in bank accounts of the assessees.

Analysis:
1. Issue of Unexplained Investment in Bank Accounts:
- The appeals were filed against orders confirming additions made by the Assessing Officer for unexplained investments in bank accounts.
- In the case of Shri Amit N. Kapadia, the Commissioner upheld the addition, citing lack of creditworthiness proof and absence of bank account details.
- Similarly, in the case of Smt. Geetaben N. Kapadia, the addition was confirmed due to insufficient evidence regarding creditworthiness and source of funds.
- The Authorized Representative argued that the deposits were made in the previous financial year, supported by bank statements, and relied on a tribunal decision for deletion of similar disallowance.
- The Departmental Representative did not challenge this argument during the proceedings.
- The Tribunal found that the deposits were made in the Assessment Year 2005-06, not the current assessment year, and deleted the additions.
- The Tribunal directed the Assessing Officer to consider these deposits for the correct assessment year as per law.

2. Decision and Outcome:
- The Tribunal allowed the appeal in the case of Shri Amit N. Kapadia and partly allowed the appeal in the case of Smt. Geetaben N. Kapadia.
- The addition of &8377; 15,73,515/- for Shri Amit N. Kapadia and &8377; 20,55,587/- for Smt. Geetaben N. Kapadia was deleted.
- However, the addition of &8377; 2,02,067/- for Smt. Geetaben N. Kapadia in a specific bank account was confirmed.
- The Tribunal pronounced the order on 19.9.2014, setting aside the lower authorities' orders and providing clarity on the treatment of the deposits for the correct assessment year.

This detailed analysis covers the key issues and the Tribunal's decision regarding the unexplained investments in the bank accounts of the assessees, highlighting the arguments presented, the tribunal's findings, and the final outcome of the appeals.