RAMYA TUMKUR GURUCHANNABASAPPA,BENGALURU vs. ITO, WARD INTL. TAXATION 1(1) , BENGALURU

Briefly stated, the facts show that a notice under section 148 of the Act was issued to the assessee on 28 March 2023. The notice was issued on the basis that the assessee had time deposits of ₹1,55,00,000 with State Bank of India, reportable transactions of ₹1,83,25,770, bank interest of ₹86,638 from Vijaya Bank, interest of ₹13,938 from Oriental Bank of Commerce, and an outward remittance of ₹5,37,482.

Thereafter, notices under section 142(1) of the Act were issued to the assessee seeking details and supporting documents. A show-cause notice dated 5 January 2024 was also issued, but the assessee did not respond. The Assessing Officer therefore passed a draft assessment order making an addition of ₹3,38,25,770. The assessee filed objections before the Dispute Resolution Panel, which issued directions on 28 November 2024. The Panel directed the Assessing Officer to delete an addition of ₹3,28,25,770. Pursuant to those directions, the Assessing Officer retained an addition of ₹10,00,000. As regards income from other sources under section 56, the Assessing Officer noted bank interest of ₹1,05,176. The Panel also directed deletion of the addition relating to unexplained expenditure of ₹5,37,462. The final assessment order was passed on 19 December 2024, retaining the addition of ₹10,00,000, being the difference between the draft addition of ₹3,38,25,770 and the amount directed to be deleted by the Panel.

Aggrieved by the final assessment order, the assessee is in appeal. The learned authorised representative filed a paper book containing 13 pages, including the remand report dated 22 October 2024 submitted before the Dispute Resolution Panel and the assessee’s rejoinder dated 4 November 2024. He submitted that the Panel had, in substance, deleted the entire addition. However, due to an error in the Panel’s direction, the Assessing Officer retained an addition of ₹10,00,000. Referring to the draft assessment order and the findings of the Panel, he

The learned departmental representative supported the order of the Assessing Officer.

We have carefully considered the rival submissions and perused the orders of the lower authorities. The draft assessment order dated 2 February 2024, placed in the paper book, shows that the Assessing Officer made an addition of ₹3,38,25,770 under section 69 of the Act. This comprised time deposits of ₹1,55,00,000 and reportable transactions of ₹1,83,25,770. In paragraph 3.1 of its directions dated 28 November 2024, the Dispute Resolution Panel directed the Assessing Officer to delete the addition of ₹3,28,25,770. The Assessing Officer therefore treated the difference of ₹10,00,000 as sustainable and retained that amount. We find that the mention of ₹3,28,25,770 instead of ₹3,38,25,770 in the Panel’s direction is merely a typographical error. In substance, the Panel directed deletion of both additions of ₹1,55,00,000 and ₹1,83,25,770. Once both additions were directed to be deleted, no amount remained to be retained. Accordingly, we direct the Assessing Officer to delete the addition of ₹10,00,000.

Accordingly, ground No. 3 of the Assessee’sappeal is allowed.

All other grounds are consequential in nature and are therefore dismissed.

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