RAMACHANDRA PRADEEP,BANGALORE vs. INCOME TAX OFFICER, INTERNATIONAL TAXATION, CIRCLE-1(1), BANGALORE

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ITITA 651/BANG/2025Status: DisposedITAT Bangalore31 July 2025AY 2015-1610 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that grounds 2, 3, 4, 5, 8, and 9 were general and not pressed, hence dismissed. The solitary surviving issue pertained to the addition of Rs. 50,03,600/-. The Tribunal found that the assessee was a member of the HUF, which sold a property for Rs. 3,15,00,000/-. A part of the sale consideration, Rs. 51,85,000/-, was paid in cash on 25.01.2015. The assessee's father, as the GPA holder, received this cash and deposited Rs. 50,00,000/- into the assessee's bank account on 27.01.2015. The HUF, with PAN AAPHA4505F, had offered the capital gains from this sale in its return of income for AY 2016-17, disclosing the full value of consideration as Rs. 3,15,00,000/-. The Tribunal concluded that the sale consideration belonged to the HUF and the addition made in the hands of the assessee was unwarranted. The Tribunal also noted that the father, as GPA holder, had categorically stated the facts of receiving cash and depositing it. Therefore, the addition of Rs. 50,03,600/- under section 69A was directed to be deleted. The addition of bank interest of Rs. 1,45,836/- was also correctly made. Grounds 6 & 7 of the appeal were allowed.

What were the facts?

The assessee, Mr. Ramachandra Pradeep, a non-resident, is in appeal against an assessment order for AY 2015-16 passed by the Income Tax Officer, Ward (International Taxation) – 1(1), Bangalore, under section 147 read with section 144C(13) of the Income Tax Act, 1961. This order was passed on the directions of the Dispute Resolution Panel (DRP). The assessment was reopened under section 147, with a notice under section 148 issued on 05.04.2022 after due procedure under section 148A. The reopening was based on the deposit of Rs. 50,03,600/- in cash into the assessee's bank account on 27.01.2015. The assessee contended that the amount belonged to his Hindu Undivided Family (HUF), which had sold a property for Rs. 3,15,00,000/- and received Rs. 51,85,000/- in cash on 25.01.2015. The DRP confirmed the addition of Rs. 50,03,600/-.

What were the issues?

1. Whether the Assessing Officer erred in initiating assessment proceedings by issuing a notice under section 148 of the Act beyond the time limit prescribed under the First Proviso to section 149(1) of the Act. - Assessee's contention: The notice under section 148 was issued beyond the prescribed time limit. - Revenue's contention: Not recorded. 2. Whether the Jurisdictional Assessing Officer erred in law by issuing a notice under section 148 of the Act, whereas the provisions of the Act require assessment notices to be issued only by a Faceless Assessing Officer. - Assessee's contention: Notices should have been issued by a Faceless Assessing Officer. - Revenue's contention: Not recorded. 3. Whether the Assessing Officer erred in passing the impugned Assessment Order beyond the limitation stipulated in section 153(2) of the Act. - Assessee's contention: The assessment order was passed beyond the statutory time limit. - Revenue's contention: Not recorded. 4. Whether the Assessing Officer and the DRP erred by treating the amount of sale consideration deposited into the Appellant's bank account, received from the sale of a property belonging to his HUF, as Unexplained Money under section 69A of the Act. - Assessee's contention: The amount deposited was sale consideration received by the HUF from property sale and should not be treated as unexplained money in the assessee's hands. - Revenue's contention: Supported the orders of the AO and DRP, confirming the addition.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 149(1),Section 144C(13),Section 153(2),Section 69A,Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES “C,” BANGALORE

For Respondent: Dr. Divya K. J –CIT
Hearing: 31.07.2025Pronounced: 31.07.2025

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES “C,” BANGALORE Before Shri Prashant Maharishi, Hon’ble Vice President & Shri Keshav Dubey, Hon’ble Judicial Member ITA No.651/Bang/2025 (A.Y.2015-16) Ramachandra Pradeep vs. Income Tax Officer No. 67, Srinidhi, 3rd A Cross Ward (International Taxation) – 1(1) BMTC Building, 5thBlock. 9th B Main, ISRO Layout Koramangala Bangalore – 560078 Bangalore - 560095 Karnataka PAN: BEYPP7659K (Applicant) (Respondent) Assessee Represented by: Sri Prakash Shridhar Hedge, CA Department Represented by: Dr. Divya K. J –CIT Date of Hearing:31.07.2025 Date of Pronouncement 31.07.2025 O R D E R Per Prashant Maharishi, Vice President: 1. Captioned appeal is filed by Mr. Ramachandra Pradeep[ Assessee/ Appellant] against assessment order passed by The Income Tax Officer Ward International taxation 1 (1), Bangalore [ The Ld. AO] passed u/s 147 RWS 144C (13) of The Income -tax Act, 1961 [ The Act] dated 17/01/2025 for the A.Y. 2015-16 on direction of The Dispute Resolution

2 ITA No.651/Bang/2025 Ramachandra Pradeep Panel-2 Bangalore [ The ld. DRP ] on draft of the assessment order dated 11/03/2024, raising following grounds of appeal: -

“1. That the learned Assessing Officer ('AO') and the Honourable Dispute Resolution Panel ('DRP') erred on facts and circumstances of the case and in law as far as the Assessment Order is prejudicial to the interest of the Appellant. 2. That the AO has erred in initiating the assessment proceedings by issuing notice under section 148 of the Act beyond the time limit prescribed under the First Proviso to section 149(1) of the Act. 3. That the Jurisdictional Assessing Officer ('the JAO') erred in law by issuing notice under section 148 of the Act whereas the provisions of the Act require the assessment notices to be issued only by the Faceless Assessing Officer. 4. That the JAO erred in law by initiating the assessment proceedings under section147 of the Act without following the process required under the provisions of the Act. 5. That the AO has erred in passing the impugned Assessment Order beyond the limitation stipulated in section 153(2) of the Act. 6. That the AO and the DRP erred by treating the amount of sale consideration deposited into the Appellant's bank account which was received from the sale of a property belonging to his Hindu Undivided Family (HUF'), as Unexplained Money under section 69A of the Act. 7. That the AO and the DRP erred in ignoring the copy of the Sale Deed of the property and the Income Tax Return ('ITR') of the HUF though it is evident from the same that the HUF had received a part of the sale consideration in cash and the entire sale consideration is offered to tax in the hands of the HUF.

3 ITA No.651/Bang/2025 Ramachandra Pradeep 8. That the AO and the DRP erred by ignoring the ITR filed by the Appellant in response to the notice issued to him under section 148 of the Act. 9. That the AO erred by computing the interest under section 234A of the Act and234B of the Act even when the Appellant is not liable to pay any income tax. That the Appellant craves leave to add to and/or to alter, amend, rescind, modify, the grounds herein above or produce further documents before or at the time of the hearing of this appeal.” 2. Except Ground Nos. 6 & 7 all other grounds are general and not pressed, hence dismissed. Thus, the solitary surviving issue is the addition of Rs. 50 Lakhs in the hands of the assessee which was deposited by the assessee in his bank account on 27.01.2015.

3.

Brief facts of the case show that, assessee is a non- resident, whose case was reopened under section 147 of the Income Tax Act, 1961 (“the Act”) and notice under section 148 of the Act was issued on 05.04.2022 after following the due procedure under section 148A of the Act. The reason for reopening the assessment is that the assessee has deposited a sum of Rs.50,03,600/- in his Vijaya Bank Account in cash. The assessee was issued necessary notices, and no reply was furnished. However, assessee later 3

4 ITA No.651/Bang/2025 Ramachandra Pradeep submitted a reply that the amount belongs to the Hindu Undivided Family (“HUF”). HUF sold the property for Rs.3,15,00,000/-and as per the sale deed dated 24.09.2015 the HUF received a sum of Rs.51,85,000/- in cash on total sale consideration of Rs.3,15,00,000/- on 25.01.2015. This is also on the date of the sale agreement entered into by the assessee. The assessee is HUF has four Coparceners/Members, who has sold part of the land admeasuring 8327 Sq. ft to Sri Jagannatha Gupta and others. The cash consideration received on 25.01.2015 was deposited in Vijaya Bank Account No. 6037 of the assessee in cash on 27.01.2015. Therefore, the above amount is received by the assessee from HUF. The HUF is also assessed to tax Vide PAN:AAPHA4505F which has filed return of income for the A.Y. 2016-17 on 18.10.2016 wherein in the computation of total income the capital gain is offered in details of Long Term Capital Gain at Part-B

5 ITA No.651/Bang/2025 Ramachandra Pradeep of Schedule CG where Full Value of the consideration of Rs.3,15,00,000/- are shown.

4.

The Ld. AO after considering the explanation of the assessee in the draft assessment order made an addition of Rs.50,03,600/-. With respect to the Bank interest of Rs.1,45,836/- appearing in the return filed by the Vijay Bank was also added. Thus, the draft assessment order under section 144C(1) of the Act was passed on11.03.2024 proposing the above addition of Rs.50,03,600/- under section 69A of the Act and Rs.1,45,836/- as income from other sources.

5.

Against the draft assessment order, assessee preferred an objection before the Ld. Dispute Resolution Panel- 2, Bengaluru (“the Ld.DRP”) on 29.03.2024 which issued a direction on 26.12.2024. On the issue of the addition of Rs.50,03,600/- the Ld.DRP confirmed the addition holding that assessee has not submitted any new evidence and further the father of the assessee who is the “Kartha” of the HUF who has stated that he is the General Power of Attorney holder and after 5

6 ITA No.651/Bang/2025 Ramachandra Pradeep receiving the sale consideration in advance by cash from the buyer deposited in the son’s account (assessee) in Vijaya Bank does not show with documentary evidences the flow of cash. Accordingly, the Ld.DRP rejected the objection of the assessee. Consequently, assessment order under section 147 r.w.s. 144C (13) of the Act was passed on17.01.2024 determining the total income of the assessee at Rs.51,49,436/-. Assessee is aggrieved and is in appeal before us.

6.

We have heard the Ld. Authorized Representative and the Ld. CIT (DR). The Ld.Authorized Representative reiterated his submission made before the Ld. Lower Authorities and relied upon the paper book furnished containing 55 pages. He referred to the sale deed dated 24.09.2015, return of income filed by HUF, bank statements of the assessee and submissions made before the Ld. Lower Authorities.

7.

Ld. Departmental Representative supported the orders of the Ld. AO and directions of the Ld.DRP. 6

7 ITA No.651/Bang/2025 Ramachandra Pradeep 8. We have carefully considered the rival contentions and perused the orders of the Ld. Lower Authorities. The facts clearly shows that Ramachandra Pradeep is a Member of HUF along with Shri A. Rmachandra (Father of the assessee), Smt. Rukmini Ramachandra (Mother of the assessee) and Dr. Deepti Ramachandra (Sister of the assessee). The HUF as per sale deed dated 27.09.2015 sold a property admeasuring 8327 Sq. ft at a total consideration of Rs.3,15,00,000/- to Sri S. Jagannatha Gupta and others. The part of the sale consideration of Rs.51,85,000/- is paid by the buyer in cash to the seller on 25.01.2015, the date on which the sale agreement was entered into. The father of the assessee Shri A. Ramachandra, the General Power of Attorney holder received the above sum of Rs.51,85,000/- in cash on 25.01.2015. 26.01.2015 happens to be a holiday on account of Republic Day. On 27.01.2015 in the bank account of the assessee with Vijaya Bank, the father of the assessee deposited cash of Rs.50,00,000/- in Vijaya bank account No.

8 ITA No.651/Bang/2025 Ramachandra Pradeep 6037. The sale consideration of Rs.3,15,00,000/- belongs to the HUF i.e.A. Ramachandra (HUF) having PAN:AAPHA4505F furnished return of income for the A.Y. 2016-17 on 18.10.2016 with having jurisdiction of Income Tax Officer, Ward -4(3)(3), Bangalore declaring the total income of Rs. 25,79,460/-. In the return of income in Schedule CG, Long Term Capital Gain is shown wherein the transaction of sale of property having full value of consideration received of Rs.3,15,00,000/- are disclosed. Thus, it is apparent that the amount of sale consideration of Rs.3,15,00,000/- included in the above cash belongs to the HUF. Thus, the addition made in the hands of the assessee is unwarranted. Further, when the father of the assessee who is the General Power of Attorney holder has categorically stated that the amount is received on sale of property by him in cash documented in sale deed and same is deposited on the next working day in the bank account of the assessee, where is the questionof showing flow of the funds.

9 ITA No.651/Bang/2025 Ramachandra Pradeep Therefore, Ld. AO and Ld.DRP are not correct in making addition in the hands of the assessee. Further, the amount of Rs.3,600/- deposited in cash also does not warrant any addition under section 69A of the Act. Thus, the addition of Rs.50,03,600/- is directed to be deleted.

9.

With respect to the addition of bank interest of Rs.1,45,836/-is below the sum chargeable to tax but it is correctly added to the income of the assessee in the result, Ground Nos. 6 & 7 of the appeal are allowed.

10.

In the result, appeal of the assessee is partly allowed.

Order pronounced in the open court on 31st July 2025.

Sd/- Sd/- (KESHAV DUBEY) (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE PRESIDENT Bangalore; Dated: 31st July 2025 Giridhar, Sr.PS

10 ITA No.651/Bang/2025 Ramachandra Pradeep Copy to: 1. The Applicant. 2. The Respondent. 3. The CIT(A) Concerned. 4. The DCIT concerned. 5. The Sr. DR, ITAT, Bangalore. 6. Guard File.

Asst.Registrar ITAT, Bangalore

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