PIYUSH BAVANJIBHAI VIRADIA,AHMEDABAD vs. THE ITO, WARD-2,INT.TAXN., AHMEDABAD

Brief facts relating to the case are that the assesse is a Non- resident Indian. Order u/s.147 r.w.s. 144C(13) of the Act was passed by making addition of Rs.1.50 Crores on account of time deposits made in the HDFC Bank account of the assessee the source of which remained unexplained and Rs.7,26,547/- being unexplained credits in Kotak Mahindra bank account of the assessee. Originally a draft order was passed u/s.144C(1) of the Act proposing the said additions noting no explanation being filed by the assessee, in response to the queries raised by the AO for explaining the source of the time deposits and credits in his bank account. The assessee objected to the draft order before the Dispute Resolution Panel (‘DRP’) who, in turn, rejected assessee’s objection and directed the AO to make the additions proposed. Accordingly, the order was passed by making addition on the two counts as noted above.

Ld. Counsel for the assessee drew our attention to the order of the DRP pointing out that before the DRP, the assessee had contended that the time deposits of Rs.1.50 Crores in its HDFC Bank account had been sourced from the deposits made in his HDFC Bank NRE account where all income earned by the assessee outside India was deposited. The copy of bank statements were also filed to the DRP to substantiate the explanation, but,

Before us, Ld. Counsel for the assessee contended that the assesse was a non-resident settled in USA and it was logistically difficult for the assessee to procure the statements from the bank itself, since, the bank required authority letter from the assessee and the assessee was unable to procure the same during the pendency of the proceedings before the Revenue authorities. He contended that the said bank statements have now been procured from the bank itself, duly stamped, and the assessee was now in a position to corroborate its explanation with a genuine copy of bank statement of its NRE A/c. Copy of the statement so procured from the bank was placed before us.

With respect to the other issue of credit in the Kotak Mahindra Bank account of the assessee of Rs.7,26,547/- remaining unexplained, he drew our attention to the finding of the DRP at page no.17 of the order noting that the assessee had produced bank statement of Kotak Mahindra Bank pertaining to earlier period i.e.

Before us, Ld. Counsel for the assessee contended that the fact of the matter was that the credits pertained to amounts received by the assessee from various parties and did not pertain to interest from NRE account. He drew our attention to the copy of the bank statement of Kotak Mahindra Bank placed before us at paper book page no.30 reflecting credits of Rs.7,26,547/- on account of amounts deposited on various dates received by way of NEFT from Bank of Baroda Fortap and NEFT from Mandhana Industries Limited. He contended that correct facts pertaining to the issue had not been appreciated by the authorities below and if given an opportunity, the assessee would explain all the facts relating to the issue to the authorities below.

Noting the contentions of the Ld. Counsel for the assessee as above and finding that the additions have been made merely for the reason that the original copy of the bank statement corroborating the assessee’s explanation of source of time deposits in bank was not filed to the DRP or the facts were not properly appreciated by the DRP and the assessee having now procured all the genuine documents, in the interest of justice, we consider it fit to restore the issue back to the file of the AO. The AO is directed to reappreciate the issue, give due opportunity of

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