What did the Tribunal hold?

For AY 2005-06, the Tribunal allowed the assessee's explanation for certain deposits. For AYs 2006-07 and 2007-08, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the AO for fresh adjudication.

The assessee declared certain income, but the Assessing Officer (AO) made additions for unexplained bank deposits. The CIT(A) deleted some additions but confirmed others based on peak bank balance.

What were the issues?

Whether the AO's additions for unexplained bank deposits were justified and whether the assessee was provided adequate opportunity to explain the sources of funds.

Pritesh Dinesh Adani, Ichalkaranji vs ITO | ITAT Pune 2019

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI R.S. SYAL

For Appellant: Shri M.K. Kulkarni

For Respondent: Shri Vishwas Munde

आदेश / ORDER

PER R.S.SYAL, VP :

These three appeals by the assessee relate to the assessment years 2005-06, 2006-07 & 2007-08.

There is a delay of 84 days in presenting each of the appeals before the Tribunal. The assessee has filed an affidavit giving reasons in support of the condonation of delay, with which I am satisfied. As such, the delay is condoned and the appeals are admitted for hearing on merits.

2 ITA Nos.88 to 90/PUN/2019 Pritesh D. Adani

A.Y. 2005-06 :

Briefly stated, the facts of the case are that the assessee

filed his return declaring total income of Rs.42,220/- which was

processed u/s.143(1) of the Act. Thereafter, re-assessment

proceedings were initiated. The Assessing Officer (AO)

observed that certain amounts were deposited in the bank

account. The assessee submitted that a sum of Rs.75,000/- was

received from his mother, in support of which a confirmation

letter was filed. As regards the other amount of Rs.32,800/-, the

assessee submitted that he received this amount from his

grandfather in three instalments, for which also some

confirmation was filed. Not convinced, the AO made additions

of Rs.75,000/- and Rs.32,800/-. The ld. CIT(A) deleted these

two additions, but directed the AO to assess a sum of

Rs.87,932/- as undisclosed peak capital in the hands of assessee.

Having heard both the sides and gone through the relevant

material on record, it is seen that the assessee gave explanation

about deposits of Rs.75,000/- and Rs.32,800/- received from his

mother and grandfather respectively. Not only that, the assessee

also furnished confirmation letters and the source of money

3 ITA Nos.88 to 90/PUN/2019 Pritesh D. Adani

received by such persons which was given to the assessee.

Considering the totality of the facts and circumstances in the

instant case, I am of the considered opinion that the assessee

successfully explained the source of deposits in the bank to this

extent. This ground is, therefore, allowed.

No sustainable legal argument supported by any cogent

evidence was advanced in support of initiation of re-assessment

proceedings. Such ground, therefore, stands dismissed.

A.Yrs. 2006-07 & 2007-08 :

The facts for the A.Y. 2006-07 are that the AO initiated re-

assessment proceedings in the same manner as for the preceding

year. The assessee submitted the source of deposit by explaining

that a sum of Rs.2,18,000/- was received from Shri P. D. Shah in

FD account and no explanation was tendered for a further sum of

Rs.45,293/-. In addition, the assessee explained the source of

cash deposit of Rs.40,000/- towards gift received from

grandfather. Not convinced, the AO made the additions of

Rs.40,000/- and Rs.2,63,293/- (Rs.2,18,000 + Rs.45,293). The

facts for the A.Y. 2007-08 are that the assessee explained the

source of cash deposit in the bank towards Rs.28,000/- as having

4 ITA Nos.88 to 90/PUN/2019 Pritesh D. Adani

been received from grandfather and furnished no explanation for

cash deposit of Rs.7,783/-. The AO made these two additions.

The ld. CIT(A), for both the years under consideration,

deleted the additions made by the AO. He, however, held that

peak bank balance was to be added, which for the A.Y. 2006-07

was determined at Rs.3,38,994/- and for the A.Y. 2007-08 at

Rs.3,17,621/-. The assessee is aggrieved by the confirmation of

additions to this extent.

Having heard both the sides and gone through the relevant

material on record, it is observed that the assessee gave

explanation about the source of some cash deposits in the bank

account and for others items of deposit, the assessee could not

give any justification. The ld. AR contended that no proper

opportunity was granted by the authorities below for explaining

the source of such cash deposits for both the years. It was,

therefore, prayed that one more opportunity be given. Without

going into the merits and considering the totality of the facts and

circumstances of the extant appeals, I am of the considered

opinion that ends of justice would meet adequately if the

impugned order on this score is set-aside and the matter is

5 ITA Nos.88 to 90/PUN/2019 Pritesh D. Adani

remitted to the file of AO. I order accordingly and direct the AO

to decide the issue afresh on merits of additions after allowing a

reasonable opportunity of being heard to the assessee.

As regards the grounds against the initiation of re-

assessment proceedings, the ld. AR did not advance any legally

sustainable arguments backed by any cogent evidence. Such

grounds are, therefore, dismissed.

10.

In the result, the appeal for the A.Y. 2005-06 is partly

allowed and for the later two years are partly allowed for

statistical purposes.

Order pronounced in the Open Court on 25th July, 2019.

Sd/- (R.S.SYAL) उपा�य� उपा�य�/ VICE PRESIDENT उपा�य� उपा�य�

पुणे Pune; �दनांक Dated : 25th July, 2019 सतीश

6 ITA Nos.88 to 90/PUN/2019 Pritesh D. Adani

आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत / Copy of the Order is forwarded to : अ�ेिषत आदेश आदेश आदेश अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / 3. The CIT (Appeals)-2, Kolhapur 4. The Pr.CIT-2, Kolhapur िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / 5. DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. 6. // True copy // आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार आदेशानुसार

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

Date 1. Draft dictated on 24-07-2019 Sr.PS 2. Draft placed before author 24-07-2019 Sr.PS 3. Draft proposed & placed -- JM before the second member 4. Draft discussed/approved -- JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *

PRITESH DINESH ADANI,ICHALKARANJI vs. INCOME-TAX OFFICER, WARD - 3, ICHALKRANJI

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

Recent GST High Court judgments