DEPUTY COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION, CIRCLE GURGAON, HARYANA vs. DEVINDER ARORA, HARYANA

Shri Vikram Singh Sharma, representing the department submits that the Assessing Officer (AO) in the assessment order dated 19.05.2023 inter alia made addition of Rs.1,87,17,709/- u/s69A r.w.s. 115BBE of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’) in respect of unexplained credits in HDFC Bank Account of the assessee. The ld. DR submits that no submissions were made by the assessee before the AO to explain source credits in the aforesaid bank account, in fact the assessee did not respond to any of the notices including notice u/s.148 of the Act issued by the AO. The assessee filed additional evidences before the 1

Per contra, Ms. Ananya Kapoor, appearing on behalf of the assessee submits that the assessee is a non-resident. The notices issued by the AO were never served on the assessee, therefore, the assessee could neither respond the notice issued u/s.148 of the Act or the subsequent notices issued u/s.142(1) of the Act. The assessee had explained this fact before the CIT(A) and had filed additional evidences under Rule 46A of the Income Tax Rules, 1962 before the CIT(A). The additional evidences filed by the assessee inter alia includes HDFC Bank Statements, fixed interest statement, tax clearance certificate, employment letter, passport details, assessment order for AY 2019-20 etc. The CIT(A) after appreciating facts and examining the documents files by the assessee admitted additional evidences and forwarded the same to the AO for comments. The AO in remand report made comments in respect of documents furnished by the assessee to counter addition made in respect of:

Admittedly, in absence of participation by the assessee in assessment proceedings, the AO completed the assessment u/s.144 r.w.s. 144C(iii) of the Act, inter alia making addition of Rs.1,87,17,709/-u/s.69A of the Act in respect of credits in assessee’s HDFC Bank Account. The assessee filed additional evidences in First Appellate Proceedings before the CIT(A), the CIT(A) sought remand report which has been reproduced in the impugned order at pages 29 to 35. A perusal of the remand report reveals that the AO has made comments on the documents furnished by the assessee with respect to addition of time deposits Rs.3,00,000/-, investment in equity shares Rs.3,13,189/- and interest Rs.9,67,158/- but has not offered any comments in respect of documents furnished by the assessee to explain credits of Rs.1,87,17,709/-in his HDFC bank account. Thus, there is no violation of Rule 46A of the Income Tax rules, 1962 as alleged by the Department.

The assessee has furnished account statement of his HDFC Bank NRE saving account, wherein amounts aggregating to Rs.1,87,17,709/- were credited, at page 215 to 236 of the paper book. The First Appellate Authority after examining assessee’s bank account has recorded that the source of credits in assessee’s bank account is predominately form salary Rs.64,52,126/-, maturity proceeds of earlier fixed deposits Rs70,74,370/- and repayment of loans given to his family members in the same year Rs.33,60,000/-, apart from dividends, interest, etc. These findings of the CIT(A) are unrebutted. Thus, the assessee discharged its onus in proving source of credits in his HDFC Bank account.

We see no reason to interfere with the well-reasoned order of the First Appellate Authority. The grounds raised by the Department assailing findings of the CIT(A) are without merit, hence, dismissed. In the result, impugned order is upheld and appeal of the Revenue is dismissed.