SHYAM SUNDAR MURARKA,MAIN ROAD vs. ITO WARD3(1), MAIN ROAD

ITA 306/RAN/2025Status: DisposedITAT Ranchi30 September 2026AY 2014-201524 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had fully explained the source of deposits totaling ₹1,35,48,160/- by providing sufficient explanations, which the Assessing Officer and the Commissioner of Income Tax (Appeals) did not rebut with any discrepancies. The Tribunal disagreed with the CIT(A)'s findings, noting that the assessee had not denied receiving the amount, all transactions were through banking channels, and none were doubted by the AO. The Tribunal also corrected the AO's assertion that no return was filed, stating that an original return was filed on 30.07.2014. The Tribunal found that simply because interest was not charged on the transactions, it could not be concluded that the source of the deposits was unexplained. The Tribunal considered the assessee's reliance on various case laws, including those stating that if the source of income is adequately explained, no addition can be made under Section 69A. Consequently, the Tribunal deleted the addition made under Section 69A. The Tribunal did not expressly leave any issue undecided.

What were the facts?

The assessee, Shyam Sundar Murarka, is in appeal against the order of the NFAC, Delhi, for Assessment Year 2014-15. The Assessing Officer (AO) initiated reassessment proceedings under Section 147 of the Income Tax Act, 1961, believing income had escaped assessment. The AO noted a deposit of ₹1,35,48,160/- in the assessee's bank account, with ₹26,200/- in cash and ₹1,35,21,960/- as credits from other sources, for which the assessee had not filed an ITR for AY 2014-15 (relevant to FY 2013-14). The AO treated this amount as unexplained under Section 69A. The assessee filed a return of income declaring ₹2,55,730/- and provided explanations regarding share dealings, commodity trading, interest, and gifts. However, the AO found the explanation for the bank deposits unsatisfactory, particularly a transaction involving ₹1,00,00,000/- credited and transferred on the same day between Shri Mayur D. Chavda and Shri Suchit Chandrakant Patel, which the assessee failed to substantiate with documentary evidence.

What were the issues?

1. Whether the proceedings initiated under Section 147 of the Income Tax Act, 1961, are valid? (Question of law and fact) 2. Whether the addition of ₹1,35,48,160/- as unexplained credit in the bank account under Section 69A of the Income Tax Act, 1961, is justified, despite the assessee claiming the sources were explained? (Question of law and fact) Assessee's contentions: - The proceedings under Section 147 are bad in law and facts. - The NFAC erred in confirming the addition of total credits in the bank account as unexplained under Section 69A, despite the sources being well explained. - The assessee claimed the deposits were out of opening cash in hand and current year's withdrawals, and that the transactions were made through banking channels. The assessee also submitted that the AO wrongly stated that no return was filed, as an original return was filed on 30.07.2014. The assessee relied on CIT v. Agile Properties (P.) Ltd., Ram Kishan Vs ITO, Narender Kumar Vs ITO, CIT Vs Shri Jawahar Lal Oswal & others, and H.M. Kashi Parekh & Co. Ltd vs. CIT, arguing that if the source of income is adequately explained, no addition can be made under Section 69A. Revenue's contentions: - The revenue relied on the orders of the lower authorities. The NFAC confirmed the AO's view that the assessee failed to prove the identity, genuineness, and creditworthiness of the parties, and lacked legally admissible evidence. The NFAC also relied on the Supreme Court judgments in CIT vs. Durga Prasad More and Sumati Dayal vs. Commissioner of Income tax, emphasizing the test of human probabilities.

Which sections of the Income-tax Act were involved?

Section 147,Section 69A,Section 148,Section 151,Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI

Before: SHRI RATNESH NANDAN SAHAY & SMT. RAJANI GUDURI

For Appellant: Shri Devesh Poddar, Advocate
For Respondent: Shri Sandipan Khan, Sr.DR
Hearing: 03/09/2026Pronounced: 30/09/2026

PER: BENCH

1.

This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [in short, the ld. CIT(A)] dated 31/07/2025 for the Assessment Year (AY) 2014-15, wherein the assessee has raised following grounds of appeal:

"

1.

The order of the Commissioner of Income Tax (Appeals), NFAC, Delhi is bad in law and facts.

2.

The Learned Commissioner of Income Tax (Appeals), NFAC, Delhi erred in confirming proceeding u/s 147 of the Income Tax Act, 1961. 3. The Learned Commissioner of Income Tax (Appeals), NFAC, Delhi erred in not considering the submission made and confirming addition of t

The order continues below.

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