2023 (11) TMI 733 - AT - Income Tax

Addition u/s 69A - unexplained deposits/credit entries - HELD THAT - As money belongs to assessee also as the assessee failed to file satisfactory explanation or reply in regard to the deposits/credit entries in his saving bank accounts is treated as assessee's unexplained income in term of Section 69A of the Income tax Act, 1961 and added to the returned income of the assessee. In first appeal, the ld. CIT(A) has confirmed the action as narrated above. The Bench has meticulously gone through the entire episode in this case and where his grievance is that the Assessing Officer was not justified in making assessment in his hands and not making the same in the hands of the actual owner of the money. The Bench feels that the object of the Court is to provide adequate justice to the assessee and it will be in the interest of equity and justice to restore the matter to the file of the AO to decide it afresh but providing adequate opportunity of being heard to the assessee. The Assessee is also directed to submit all the necessary details / submissions including the submissions produced before us before concerning the issue before the AO to dispel the doubt in the case. Hence, the appeal of the assessee is allowed for statistical purpose.

Summary

Issues Involved:
1. Initiation of proceedings under Section 148 of the IT Act.
2. Addition of Rs. 10,649,030 under Section 69A of the IT Act.
3. Unexplained cash deposits in the assessee's bank accounts.
4. Consideration of evidence and entries in the bank accounts.

Summary:

1. Initiation of Proceedings under Section 148:
The assessee contested the initiation of proceedings under Section 148 of the IT Act and the subsequent assessment order under Section 143(3) read with Section 147. The Tribunal noted that the Assessing Officer (AO) issued the notice under Section 148 on 29.09.2016 after obtaining necessary permissions and recorded reasons for the same. The assessee was required to file the return of income within 30 days of receiving the notice.

2. Addition of Rs. 10,649,030 under Section 69A:
The AO made an addition of Rs. 10,649,030 as unexplained income under Section 69A, which the assessee challenged. The AO's examination revealed cash deposits in the assessee's bank accounts with Bank of Baroda and Punjab National Bank. The assessee claimed that the deposits belonged to Shri Amit Goyal, who denied this in his affidavit. The AO concluded that the deposits were unexplained and belonged to the assessee, based on several factors including the assessee's contradictory statements and lack of supporting evidence.

3. Unexplained Cash Deposits:
The Tribunal observed that the assessee failed to provide satisfactory explanations or evidence to substantiate the source of the cash deposits. The AO noted that the bank accounts were in the name of the assessee and linked to his PAN, and the assessee himself issued cheques periodically. The AO treated the cash/credit entries as the assessee's unexplained income.

4. Consideration of Evidence and Entries in Bank Accounts:
The Tribunal found that the factual observations of the AO were not rebutted by the assessee. The assessee's claims, including the involvement of Shri Amit Goyal and others, were not supported by adequate evidence. The Tribunal noted the contradictory stands taken by the assessee regarding the ownership of the bank transactions and the interest earned from the accounts. The Tribunal upheld the addition of Rs. 10,649,030 as unexplained income.

Conclusion:
The Tribunal dismissed the appeal, confirming the addition of Rs. 10,649,030 as unexplained income under Section 69A. However, the Tribunal restored the matter to the file of the AO for fresh adjudication, providing the assessee an opportunity to submit necessary details and evidence. The Tribunal clarified that this decision should not be construed as reflecting on the merits of the dispute, which should be adjudicated independently by the AO in accordance with law. The appeal was allowed for statistical purposes.