RAKESH JAIN,DEHRADUN vs. ITO, WARD- (2), DEHRADUN

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ITA 3757/DEL/2018Status: DisposedITAT Dehradun23 June 2023AY 2012-135 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal directed the Assessing Officer to verify if Sh. Virendra Singh had declared the Rs. 9,80,000/- in his income tax returns and balance sheet. If confirmed, no addition can be made in the assessee's hands.

What were the facts?

The assessee's employee facilitated cash deposits totaling Rs. 9,80,000/- into the bank account of a third party, Sh. Virendra Singh. The assessee claimed the sum belonged to Sh. Virendra Singh, but the Assessing Officer and CIT(A) treated it as the assessee's unexplained income.

What were the issues?

Whether the sum of Rs. 9,80,000/- deposited in a third party's account, facilitated by the assessee's employee, constitutes the assessee's unexplained income.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DEHRADUN CIRCUIT BENCH: DEHRADUN

Hearing: 19.06.2023Pronounced: 23.06.2023

This is an appeal against the order dated 09.02.2018 passed by learned Commissioner of Income Tax (Appeals) [hereinafter referred to as the learned CIT(A)], Dehradun, pertaining to assessment year 2012-13.

2.

The only issue raised by the assessee in the original grounds of appeal is as to whether the learned CIT(A) was justified in confirming the addition made in the sum of Rs.9,80,000/- in respect of cash deposit made in the bank account of Sh. Virendra Singh by the employee of the assessee.

3.

We have heard the rival submissions and perused the materials on record. The assessee is an individual and had filed its return of income for assessment year 2012-13 on 28.09.2012 declaring return income of Rs.4,58,740/-. The assessee is a proprietor of Rakesh Filling Station. The assessee has also disclosed agricultural income of Rs.72,500/- in his return of income.

Pursuant to the Tax Evasion Petition (TEP) received by the Income Tax Department, it was found that there were some cash deposits made in the bank account of Sh. Virendra Singh (friend of the assessee) through Sh. Hardwari Lal (employee of the assessee). The case of the assessee was reopened by the Assessing Officer by issuing notice under section 148 of the Act on 09.03.2017. In response to the said notice, the assessee filed a return of income dated 08.08.2017 offering the same income as was disclosed originally in the return of income under section 139(1) of the Act.

4.

It is not in dispute that sums of Rs.18,00,000/- and Rs.9,80,000/- were deposited in the bank account of Sh. Virendra Singh through the employee of the assessee, Sh. Hardwari Lal. The assessee has owned up the deposit of money in the sum of Rs.18 lakhs made in the bank account of Sh. Virendra Singh belonging to him. However, with regard to the remaining sum of Rs.9,80,000/-, the assessee stated that the said sum belongs to Sh. Virendra Singh and that Sh. Hardwari Lal had merely assisted Sh. Virendra Singh to deposit the cash in the bank account of Sh. Virendra Singh.

Learned Assessing Officer, however, disregarded the explanation of the assessee and proceeded to treat the sum of Rs.9,80,000/- deposited in the bank account of Sh. Virendra Singh as amount belonging to the assessee, which remained unexplained and accordingly brought to tax the same as income of the assessee. This action of learned Assessing Officer was upheld by learned CIT(A).

5.

Before us, learned AR vehemently pleaded that this sum of Rs.9,80,000/- has already been owned and considered by Sh.

Virendra Singh in his income tax return, which is supported by the tax audit report filed thereon. In this regard, we find that similar submissions was made by the assessee before learned CIT(A) also, which is evident from para 8 of the order of learned CIT(A), but no finding has been given thereon.

6.

In our considered opinion, this matter requires factual verification as to whether Sh. Virendra Singh has owned up this sum of Rs.9,80,000/-, as belonging to him in his balance sheet, and has filed his income tax return accordingly or not. The learned Assessing Officer is accordingly directed to examine/verify the said fact with the Assessing Officer of Sh. Virendra Singh, in the manner known to law. If on verification of the balance-sheet and income tax returns and tax audit report of Sh. Virendra Singh, it is found that he had included the impugned amount of Rs.9,80,000/- as an amount belonging to him, then no addition can be made in the hands of the assessee herein. With these directions, the original grounds raised by the assessee are allowed for statistical purposes.

7.

In view of the aforesaid direction on the original grounds of appeal, we do not deem it fit to adjudicate the additional ground raised by the assessee and the same is hereby left open.

8.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in Open Court on 23rd June, 2023

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