SHRI PRABHAKAR TUKARAM CHAVAN,DHULE vs. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE - 1, NASHIK

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ITSSA 10/PUN/2022Status: DisposedITAT Ahmedabad10 January 2023AY 2017-183 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 13.15 lakhs was not justified and directed its deletion. The Tribunal noted that the search dated 17.01.2018 led to the discovery of the bank passbooks of the assessee's family members/account holders, and the contents of these passbooks are presumed to be correct under Section 292C of the Act. However, the Tribunal found no reason to conclude that the assessee had opened all these bank accounts and made the deposits in his relatives' names. The Revenue's representative could not pinpoint any specific material, including deposit slips, to support the assessee's involvement in depositing the sums into his family members' accounts. Therefore, the Tribunal found no reason to sustain the addition. The appeal was allowed.

What were the facts?

The assessee, Shri Prabhakar Tukaram Chavan, filed an appeal for Assessment Year 2017-18 against the order of CIT(A), Pune-12, dated 30.12.2021. The appeal arose from proceedings under Section 153 read with Section 143(3) of the Income Tax Act, 1961. The dispute concerns an addition of Rs. 13.15 lakhs made by the lower authorities as unexplained cash deposits. The departmental authorities found bank passbooks of eight relatives of the assessee, showing deposits totaling Rs. 13.15 lakhs. The Revenue did not accept the assessee's explanation that the balances belonged to the account holders. The assessee did not appear for the hearing, and the case proceeded ex-parte. The search that led to the discovery of these passbooks was dated 17.01.2018.

What were the issues?

1. Whether the addition of Rs. 13.15 lakhs as unexplained cash deposits in the hands of the assessee is justified, turning on the interpretation of Section 68 of the Income Tax Act, 1961. Assessee's contentions: The assessee's explanation that the balances in the bank accounts of his eight relatives belonged to those account holders was not accepted by the Revenue. (No specific authorities or precedents were mentioned in the judgment for the assessee's arguments, as the assessee was ex-parte). Revenue's contentions: The Revenue contended that bank passbooks found during a search, belonging to the assessee's relatives, indicated deposits totaling Rs. 13.15 lakhs. The Revenue declined to accept the assessee's explanation that the balances belonged to the account holders and strongly endeavored to support the impugned addition.

Which sections of the Income-tax Act were involved?

Section 153,Section 143(3),Section 68,Section 292C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B” : PUNE

Before: SHRI SATBEER SINGH GODARA & DR. DIPAK P. RIPOTE

Hearing: 09.01.2023Pronounced: 10.01.2023

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B” : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER I.T.(SS)A.No.10/PUN./2022 Assessment Year 2017-18 Shri Prabhakar Tukaram Chavan, 01, Mali Lane The DCIT, Shripur, District Dhule. Central Circle-1 vs. PIN – 425 405. Maharashtra Nashik. PAN AAPPC3667A (Appellant) (Respondent) For Assessee : -None- For Revenue : Shri B. Koteswara Rao Date of Hearing : 09.01.2023 Date of Pronouncement : 10.01.2023 ORDER PER SATBEER SINGH GODARA, J.M. This assessee’s appeal for Assessment Year 2017-18 arises against CIT(A), Pune-12, Pune’s order dated 30.12.2021 passed in Din & Order No.ITBA/APL/S/250/2021- 22/1038276618(1), in proceedings u/s.153 r.w.s.143(3) of the Income Tax Act, 1961 (in short "the Act").

Case called twice. None appears at assessee’s behest. He is accordingly proceeded ex-parte.

2.

It emerges during the course of hearing with the able assistance come from the Revenue side that we hardly need to delve deeper in the relevant factual matrix so far as the assessee’s sole substantive ground challenging correctness

2 I.T.(SS)A.No.10/PUN./2022 Shri Prabhakar Tukaram Chavan, Dhule. of unexplained cash deposits addition of Rs.13.15 lakhs made in both the lower authorities respective orders is concerned. This is for the precise reason that the departmental authorities had found bank pass books in the name of his eight relatives namely elder brother, sister in law, elder brother’s son, younger brother, younger brother’s wife, son of younger brother, daughter and son in law, indicating deposits involving varying sums, totalling to Rs.13.15 lakhs. The Revenue’s stand all along has declined to accept the assessee’s explanation that the said balance in the concerned cooperative bank accounts belong to the account holders only. Mr. Koteswara Rao also made a very strong endeavour to support the impugned addition made in assessee’s hands for this precise reason alone.

3.

We have given our thoughtful consideration to the foregoing rival stands and find no merit in Revenue’s arguments. We make it clear that the search in question herein dated 17.01.2018 had indeed led the department to the foregoing assessee’s family members/account holders’ passbooks whose contents are presumed to be correct u/s.292C of the Act. That being the case, we hardly see any reason in Revenue’s stand that the said presumption would further lead us to the conclusion that it was the assessee who

3 I.T.(SS)A.No.10/PUN./2022 Shri Prabhakar Tukaram Chavan, Dhule. had opened all the said bank accounts followed by deposits made in their respective names. Learned CIT-DR could not pinpoint any specific material, including the concerned deposit slips, which could throw light on the assessee’s having deposited the impugned sums in his family members’ accounts. Faced with the situation, we see no reason to sustain the impugned addition of Rs.13.15 lakhs. The same is directed to be deleted. Ordered accordingly.

4.

This assessee’s appeal is allowed.

Order pronounced in the open Court on 10.01.2023.

Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 10th January, 2023

VBP/-

Copy to

1.

The appellant 2. The respondent 3. The Ld. CIT(A) concerned. 4. The CIT concerned 5. D.R. ITAT, Pune “B” Bench, Pune 6. Guard File. //By Order//

Assistant Registrar, ITAT, Pune Benches, Pune.

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