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Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by assessee is directed against order of NFAC dated 25.8.2023 passed u/s 250 of the Income-tax Act,1961 ['the Act' for short] for the assessment year 2012-13.
The assessee has deposited cash of Rs.31.64 lakhs to its account with Axis Bank, Jamakhandi. Therefore, notice u/s 148 of the Act was issued on 30.3.2019 after recording reasons as per order sheet and after obtaining approval from the Principal CIT Belagavi vide F.No.6/Pr.CIT/BGV/2018-19 dated 29.3.2019. No reply from the assessee even after 30 days from the date of issue of notice u/s 148 of the Act was received. Consequently, on the basis of ld. A.R’s information, assessment was framed u/s 144 r.w.s. 148 of the Act and there was addition of Rs.31.64 lakhs. Against this assessee went ITA No.816/Bang/2023 Prakash Malleshappa Chanal, Jamakhandi Page 2 of 5 in appeal before ld. CIT(A), who has confirmed the addition. Against this assessee is in appeal before us.
We have heard the rival submissions and perused the materials available on record. The assessee has relied on the order of the Mumbai Bench of Tribunal in the case of Arun I. Keshwani in dated 30.5.2023, wherein held as under: 8. “We heard the parties and perused the materials on record. The reason for reopening as has been extracted in the earlier part of this order is that during the search conducted in Ahuja group, there were unaccounted cash transactions and accommodation entries and the loan transaction of the assessee is one such accommodation entry. We notice that the Assessing Officer, in the order of assessment had extracted certain portions of the statement recorded from Shri Jagdish B Ahuja, where he had confirmed maintenance of parallel books of account and giving the accommodation entries. However we do not find any specific finding from the statement recorded which the Assessing Officer has linked the impugned loan transaction with the statement recorded. We also notice that while making the addition under section 69A, the Assessing Officer has emphatically concluded that during the year, assessee has returned the loan and has received cash against the same without bringing any concrete evidence except the modus operandi of the transaction as has been explained in the statement given by Shri Jagdish Ahuja. It is also noticed that the factual finding given by the Assessing Officer that the assessee has repaid the loan during the year is not correct since from the perusal of records we notice that the assessee has taken the loan on 19/11/2008 through cheque (pages 43 and 47 of paper book). From the perusal of records it is also noticed that the assessee has paid interest after deducting tax at source on the same (page 47 of paper book). It is also noticed that the assessee has repaid the loan on 16/09/2009 along with interest (page 50 of paper book). The assessee has also furnished the ledger confirmation from Ahuja Properties & Associates, the bank statement of Ahuja Properties & Associates alongwith their ITRs (pages 55 – 64 of the paper book). Therefore we see merit in the submissions of the ld AR that the assessee has discharged the onus of proving the genuineness of the transaction. The co-ordinate bench in the case of Sarvajit Patel (supra) has considered a similar issue of loan taken from Ahuja group and has given a finding that the Assessing Officer failed to disprove the contentions of the assessee and accordingly, held the appeal in favour of the assessee. In assessee's case here, the documents evidencing the impugned transactions have been submitted before the lower authorities, which fact has not been analysed by the lower authorities and that nothing has been brought on record by the Revenue to controvert the contentions of the assessee. Further, the addition in this case has been made under section 69A, which reads as under:-
Prakash Malleshappa Chanal, Jamakhandi Page 3 of 5 "69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Income-tax Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year."
From the plain reading of the section it is clear that when the assessee is found to be the owner of money bullion etc., that is not recorded in books and that the assessee offers no explanation about the nature and source then the said money bullion etc., may be deemed to be the income of the assessee u/s.69A. In the case under consideration we notice that the assessee has recorded the impugned transactions in the books of accounts and has also provided explanations/evidences explaining the source of the loan transaction. Given this and considering other facts and evidences we are of the considered view that the AO is not correct in treating the loan transaction as an income u/s.69A. We according delete the addition made and allow the appeal in favour of the assessee.
In the result, appeal is allowed in favour of the assessee.”
3.1 Further, he relied on the order of the coordinate bench of Bangalore in the case of Teena Bethala in & 1384/Bang/2019 dated 28.8.2019, wherein held as under:
14.3.1 I have considered the rival contentions and perused the material on record; including the judicial decision cited and placed reliance upon. From a perusal of the order of assessment, it emerges that the AO at para 1.2 thereof has listed out the cash deposits, to the extent of Rs.l3,00,000/-, made in the assessee' bank account with Federal Bank on various dates. It is also noticed that these deposits are made in the previous year relevant to Assessment Year 2012-13 i.e.the year under consideration. In my view, the AO has neither made out any case for addition under section 69A of the Act nor given a reasoned finding as to how the amount of Rs.33,23,425/- has been added thereunder. As per the order of assessment, the AO has only mentioned that the information is received from the Investigation Wing of the Department that cash deposits were made in the assessee's bank account.
Prakash Malleshappa Chanal, Jamakhandi Page 4 of 5 14.3.2 In the facts and circumstances of the case, as narrated above, it is essential that the provisions of section 69A of the Act be extracted hereunder:-
"69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and 1384/Bang/2019 and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Income- tax Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.".
14.3.3 On a reading of section 6gA (supra), it is clear that the onus is upon the AO to find the assessee to be the owner of any money, bullion, jewellery or valuable article and such money, bullion, jewellery or valuable article was not recorded in the books of account, if any, maintained by the assessee for any source of income. In these circumstances, the AO can resort to making an addition under section 69A of the Act only in respect of such monies / assets / articles or things which are not recorded in the assessee's books of account. In the case on hand, the cash deposits are recorded in the books of account and are reportedly made on the receipt from a creditor. Further, the PAN and address of the creditor as well as ledger account copies of the creditor in the assessee's books of account have also been field before the AO. In these circumstances, it is evident that the AO has not made out a case calling for an addition under section 69A of the Act. Probably, an addition under section 68 of the Act could have been considered; but then that is not the case of the AO. The assessee, apart from raising several other grounds, has challenged the legality of the addition being made under section 69A of the Act. In support of the assessee's contentions, the learned AR placed reliance on the decision of the ITAT - Mumbai Bench in the case of DCIT Vs. Karthik Construction Co. in dated 23.02.2018, wherein the Bench at para 6 thereof has held that addition under section 6gA of the Act cannot be made in respect of those assets / monies / entries which are recorded in the assessee's books of account. In my considered view, the aforesaid decision of the ITAT - Mumbai Bench (supra) is squarely applicable to the facts of the case on hand, where the entries are recorded in the assessee's books of account. In this view of the matter, I am of the opinion that the addition of Rs.33,23,425/- made under section 69A of the Act is bad in law ITA Nos.1383 and 1384/Bang/2Oi9 in the facts and circumstances of the case on hand and therefore delete the addition of Rs.33,23,425/- made thereunder. The AO is accordingly directed.
In the result, the assessee's appeal for Assessment Year 2012-13 is partly allowed.”
3.2 It is an admitted fact that assessee had deposited Rs.31.64 lakhs to bank account with Axis Bank, Jamakhandi on various dates. The assessee has not furnished any details to ld. AO at the time of assessment and assessment was completed ex-parte. Before ld. CIT(A) also assessee has not furnished any details. In our opinion, it is appropriate to remit the issue to the file of ld. AO with direction to assessee to produce all details about source of deposit to the bank account with Axis Bank to the satisfaction of ld. AO.
In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 5th Dec, 2023