GOPINATH NEELAPPA VENKATAPUR,HAVERI vs. INCOME TAX OFFICER, WARD-1 , HAVERI

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ITA 1729/BANG/2025Status: DisposedITAT Bangalore22 July 2026AY 2017-187 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee had provided sufficient explanation regarding his business operations and the source of funds, including affidavits and customer details. Therefore, the matter was remitted back to the AO for fresh adjudication.

What were the facts?

The assessee did not file an income tax return for AY 2017-18. The Assessing Officer (AO) added cash deposits of Rs. 95,14,000 and fixed deposits of Rs. 14,00,000 as unexplained income, disbelieving the assessee's claim of being a commission agent for vehicle bidding.

What were the issues?

Whether the cash deposits and fixed deposits made by the assessee were adequately explained as income from his alleged business of vehicle bidding, and whether the assessment was time-barred.

Which sections of the Income-tax Act were involved?

Section 147,Section 148A,Section 148,Section 142(1),Section 69A,Section 149(1)(a),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY

For Appellant: Shri Vinay Kulkarni, A.R
Hearing: 29.04.2026Pronounced: 22.07.2026

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 20.6.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1077287500(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2017-18.

2.

The assessee has raised the following grounds of appeal:-

1.

The assessment unit erred on facts and in law in making an addition of cash deposits of Rs.95,14,000 despite explaining the sources of deposits made into the bank account. 2. The order shall need to be set aside as the assessment is barred by the time limit stipulated under section 149(1)(a).

ITA No.1729/Bang/2025 Gopinath Neelappa Venkatapur, Haveri Page 2 of 7 3. The addition of Rs.95,14,000 shall be deleted as the, assessment unit passed the order without considering the corresponding debits in the bank account which is in support of the nature of business carried out by the appellant hence the very addition is against the spirit of Section 69A.

3.

The brief facts of the case are that the assessee did not file his return of income u/s 139 of the Act for the AY 2017-18. However, the information suggest that the income to the extent of Rs.1,10,04,759/- had escaped assessment within the meaning of Section 147 of the Act. Accordingly, an order u/s 148A(d) of the Act was passed on 27.3.2024 and notice u/s 148 of the Act was issued to the assessee. In response to the said notice, the assessee filed his return of income on 24.5.2024 declaring total income of Rs.1,38,080/-. Thereafter, notice u/s 142(1) of the Act was issued along with the specific questionnaire to the assessee directing to furnish the documentary evidences of income earning activities, bank account statement, nature and source of cash deposits during the financial year 2016-17. The assessee in response to the said notices submitted his reply. During the course of assessment proceeding, the assessee claimed that he worked as a commission agent by making online bidding and facilitating the customers to purchase the seized vehicles specifically tractors via L&T Finance, John Deere Finance, Kotak Mahindra Bank, HDFC Bank and received the commission of Rs.3,000/- to Rs.5,000/- for final sale of each vehicle. It is also submitted that the assessee was bidding by using his brother’s account on the bidding platform “Car trade exchange” and “Car Dekho” rather than through any formal authorization from financial institutions. The AO disbelieved the contention of the assessee by holding that as the assessee failed to furnish the requested documents to justify the cash deposits in his bank account, the total cash deposited amounting to Rs.95,14,000/- was treated unexplained income and added to the total income of the assessee.

ITA No.1729/Bang/2025 Gopinath Neelappa Venkatapur, Haveri Page 3 of 7

3.1 Further, the assessee had also made a fixed deposit of Rs.14,00,000/- during the relevant assessment year. As the assessee failed to furnish the requested documents to justify the time deposits in his bank account and hence in the absence of any documentary evidence, the total time deposits amounting to Rs.14 lakhs was treated as unexplained money and added to the income.

3.2 In addition to the above, assessee had received interest of Rs.90,759/-. Since the assessee had correctly declared the said interest in the return of income filed in response to notice u/s 148 of the Act, the AO held that no further addition is made on this count. Thus, the AO completed the assessment proceedings on a total assessed income of Rs.1,10,52,080/- while passing order u/s 147 r.w.s. 144 of the Act dated 12.2.2025.

4.

Aggrieved by the assessment order passed u/s 147 r.w.s. 144 of the Act dated 12.2.2025, the assessee preferred an appeal before the ld. CIT(A)/NFAC.

5.

The ld. CIT(A)/NFAC with regard to the addition u/s 69A of the Act amounting to Rs.95,14,000/- as unexplained money, held that although the assessee submitted list of various parties, however, it does not ipso facto establish the source and nature of cash deposited in the bank account. Merely furnishing of names or list of alleged purchasers does not discharge the assessee’s burden under law. Further, it is held that the assessee failed to furnish confirmations from these parties or any supporting documents that could substantiate the claim of genuine transactions. Further, no material evidences was brought on record to establish the nexus between the cash deposits and the alleged business activity. Further, the fact that assessee made cash withdrawals from the same account does

ITA No.1729/Bang/2025 Gopinath Neelappa Venkatapur, Haveri Page 4 of 7 not by itself establish the business nature of cash deposits unless corroborated by substantive evidence regarding the genuineness of the transaction. Thus, in the absence of satisfactory explanation and documentary evidence, the ld. CIT(A)/NFAC held that the addition made by the AO treating the cash deposit of Rs.95,14,000/- as unexplained money u/s 69A of the Act was justified and accordingly the grounds as raised by the assessee were dismissed.

5.1 Further, with regard to addition of Rs.14 lakhs made u/s 69A of the Act on account of fixed deposit, the assessee during the course of appellate proceedings, submitted a letter from the bank wherein it is stated that the FD are made from the unutilized portion of the OD against deposit for a period of 7 to 14 days only and accordingly the ld. CIT(A)/NFAC directed the AO to verify the correctness of the letter and if the letter is found in order, the source of FD stand explained and the addition would be deleted. Thus, the ld. CIT(A)/NFAC partly allowed this ground of appeal.

6.

Again, aggrieved by the order of ld. CIT(A)/NFAC, the assessee has filed the present appeal before this Tribunal. The assessee has also filed 2nos. of paper books each comprising 46 pages containing therein written submission, bank statements, summary of transactions made in banks, affidavit of the assessee as well as of his brother, details of customers with few Aadhar cards and RC copies.

7.

Before us, the ld. A.R. of the assessee vehemently submitted that the assessee is engaged in the business of bidding for second hand vehicles through online auction portals and get commission in the range of Rs.3,000/- to Rs.10,000/- for successful bid vehicle. Further, the ld. A.R. submitted that ld. CIT(A)/NFAC grossly erred in not accepting the modus operandi of the business of the assessee, especially when the list of various parties along with address, mobile

ITA No.1729/Bang/2025 Gopinath Neelappa Venkatapur, Haveri Page 5 of 7 numbers were given along with the breakup of vehicle registration numbers, total cost of vehicle payment received from customers and accordingly prayed that appeal of the assessee may be allowed in the interest of justice.

8.

The ld. D.R. on the other hand, vehemently submitted that assessee is not a registered commission agent and also the assessee admitted that he was operating through his brother’s login credential on auction platform and did not have any formal authorization from the financial institutions, which casts serious doubt on the veracity of the assessee’s version. Further, the ld. D.R. submitted that as the identity, creditworthiness of the parties and genuineness of the transaction could not be established by the assessee, the authorities below have rightly added the same as unexplained money u/s 69A of the Act.

9.

We have heard the rival submissions and perused the materials available on record. The assessee by way of written submission stated that the assessee is engaged in the business of bidding for second hand vehicles through online auction portals such as “Car trade exchange” and “Car dekho”. The assessee places bids for seized vehicles auctioned through such platforms using the login credentials of his brother Shri Lingaraj Neelappa Venkatapur. Generally, the assessee bids for tractors seized and auctioned by financial institutions such as L&T Finance, John Deere Financial India Pvt. Ltd., Kotak Mahindra Bank & HDFC Bank. The assessee’s customers being farmers used to deposit cash with the assessee and assessee used to deposit the same cash in his OD account with Corporation Bank (Now Union Bank of India) and Canara Bank. Subsequently, on the bid being successful, the assessee used to transfer the amount either to the financial institutions or to the defaulted borrower’s account whose vehicles were seized for the

ITA No.1729/Bang/2025 Gopinath Neelappa Venkatapur, Haveri Page 6 of 7 purpose of auction. In case the bid was not successful, the assessee used to withdraw the cash and return the same to the customers. It is also submitted that the assessee used to get commission in the range of Rs.3,000/- to Rs.10,000/ per successful bid vehicle. Before us, the assessee filed an affidavit stating the above and also stated that he is using login credential registered in the name of his elder brother on the online platforms of “Car dekho” & “Car trade exchange”. Further, the assessee in his affidavit submitted that during the FY 2016-17, he had facilitated the sale of 44 vehicles from which he derived approximate gross income of Rs.4,40,000/- only. Further, before us, the elder brother of the assessee also filed an affidavit stating that he had permitted his brother Sri Gopinath to use his login ID solely for the purpose of bidding for vehicles on the said platforms in the financial year 2016- 17. Further, it is stated that bidding and related transactions were carried out through said Login by using assessee’s bank accounts and funds and the assessee’s brother bank account was never used for any such transactions. Lastly, the brother of the assessee stated that he had not derived any income, benefit or consideration from the said bidding or vehicle transactions. We take a note of the fact that the assessee again before us had also filed detailed chart giving breakup of name of customers, address, mobile numbers, registration numbers as well as cost of vehicle along with few copies of RC and Aadhar of his customers. This being so, we are of the considered opinion that the assessee has properly explained the modus operandi of his business which should not be doubted. Having held so, in the interest of justice, equity and fair play, we deem it fit and proper to remit the entire issue to the file of the AO to decide in accordance with the above observations. The assessee is also directed to explain the number of transactions (number of vehicles) sold during the year under consideration along with the evidences produced before us to substantiate the genuineness of the

ITA No.1729/Bang/2025 Gopinath Neelappa Venkatapur, Haveri Page 7 of 7 transactions. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. It is ordered accordingly.

10.

In the result, appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on 22nd July, 2026

(Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member

Bangalore, Dated 22nd July, 2026. VG/SPS

Copy to:

1.

The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order

Asst. Registrar, ITAT, Bangalore.

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