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Facts
The Revenue appealed against the CIT(A)'s order deleting the addition of cash deposits made in an individual bank account. The AO added the amount under Section 69A of the Act, stating the account was not reflected in the return filed in HUF status. The assessee claimed the deposits were made in their HUF's bank account.
Held
The Tribunal held that the assessee had inadvertently provided their individual PAN instead of the HUF PAN to the bankers. It was noted that the entire business income belonged to the HUF, and the bank accounts were disclosed in the HUF's return. Therefore, the addition made in the individual's hands was not sustainable.
Key Issues
Whether cash deposits in an individual's bank account, which is claimed to belong to the HUF and disclosed in its return, can be added as unexplained money in the individual's hands.
Sections Cited
69A, 147, 144B, 46A
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: HON’BLE SHRI MANU KUMAR GIRI & SHRI HON’BLE S.R. RAGHUNATHA
आदेश / O R D E R
PER MANU KUMAR GIRI (Judicial Member):
These two appeals by the Revenue are directed against orders of even dated 23.01.2025 passed by the Ld. Commissioner of Income- tax (Appeals), NFAC Delhi [in short 'the Ld. CIT(A)'] for assessment years 2018-19 and 2019-20, respectively, raising following grounds:
& 903/Chny/2025 A. Kulanthaivel :- 2 -:
Grounds of appeal for AY 2018-19:
“(1) The order of the Ld. CIT(A) is opposed to law on the facts and in circumstances of the case.
(2) The Ld. CIT(A) erred in deleting the addition of the cash deposits of Rs.4,66,49,320/- which belongs to the assessee's individual bank account in the corporation bank CC A/c No.560361000009745 which does not belong to the bank account of the assessee in HUF status.
(3) The Ld. CIT(A) failed to appreciate the fact that banking regulations clearly stipulate procedures for filing details/documents for opening bank account for various types of accounts such as Individual, HUF, Firm and Company etc.
(4) The Ld. CIT(A) failed to observe the fact that the bank account (No. 560361000009745) of corporation bank in which the alleged cash deposit transactions have been made by the assessee has not been mentioned under "Bank details" in the return of income filed for the assessment year 2018-19 in the status of HUF.
(5) The Ld. CIT(A) failed to observe the fact that the assessee's claim that the credit including cash deposit transactions of the assessee in the individual bank account were disclosed in the return of HUF is not substantiated by the assessee with corroborative evidences/supporting documents.
(6) The Ld. CIT(A) failed to observe the fact that the assessee has not made any attempt to justify how the secured loans of Rs.9,94,83,718/- appearing in the balance sheet of HUF has relevance with the cash deposits found in the assessee's individual account.
(7) The Ld. CIT(A) failed to observe the fact that the assessee has not submitted any supporting documents to explain the source of the cash transactions as per the entries in the cash book of his business concern of Sri Velmurugan Modern Rice Mill.
(8) The Ld. CIT(A) erred in admitting the additional evidence of certain pages of financial statements submitted by the assessee without remanding the same to the AO in violation of Rule 46A of IT Rules, 1962.”
& 903/Chny/2025 A. Kulanthaivel :- 3 -:
Grounds of appeal for AY 2019-20:
“(1) The order of the Ld. CIT(A) is opposed to law on the facts and in circumstances of the case.
(2) The Ld. CIT(A) erred in deleting the addition of the cash deposits of Rs.17,98,85,344 /- which belongs to the assessee's individual bank account in the corporation bank CC A/c No.560361000009745 which does not belong to the bank account of the assessee in HUF status.
(3) The Ld. CIT(A) failed to appreciate the fact that banking regulations clearly stipulate procedures for filing details/documents for opening bank account for various types of accounts such as Individual, HUF, Firm and Company etc.
(4) The Ld. CIT(A) failed to observe the fact that the bank account (No. 560361000009745) of corporation bank in which the alleged cash deposit transactions have been made by the assessee has not been mentioned under "Bank details" in the return of income filed for the assessment year 2019-20 in the status of HUF.
(5) The Ld. CIT(A) failed to observe the fact that the assessee's claim that the credit including cash deposit transactions of the assessee in the individual bank account were disclosed in the return of HUF is not substantiated by the assessee with corroborative evidences/supporting documents.
(6) The Ld. CIT(A) failed to observe the fact that the assessee has not made any attempt to justify how the secured loans of Rs.9,16,77,587/- appearing in the balance sheet of HUF has relevance with the cash deposits found in the assessee's individual account.
(7) The Ld. CIT(A) failed to observe the fact that the assessee has not submitted any supporting documents to explain the source of the cash transactions as per the entries in the cash book of his business concern of Sri Velmurugan Modern Rice Mill.
(8) The Ld. CIT(A) erred in admitting the additional evidence of certain pages of financial statements submitted by the assessee without remanding the same to the AO in violation of Rule 46A of IT Rules, 1962.”
& 903/Chny/2025 A. Kulanthaivel :- 4 -:
In both the appeals facts are identical hence adjudication in AY 2018-19 will apply mutatis mutandis to for AY 2019-20.
Briefly stated facts of the case in AY 2018-19 are that the AO received information that the assessee has made cash deposit of Rs.4,66,49,320/- in Corporation Bank a/c No.5603610000097, but the said bank account is not reflected in the above bank account details.
The AO added the same u/s 69A of the Act. The assessee preferred an appeal before the ld. CIT(A) against the assessment order u/s.147 r.w.s. 144B of the Act dated 04.03.2024 making addition u/s 69A of the Act.
The ld. CIT(A) after hearing and noting the submissions of the assessee, has deleted the addition. The findings of the ld.CIT(A) is as under:
“5.5 The appellant submitted written submission on 23.12.2024 as below:
1. 1. The above appeal is reposted for hearing on 31.12.2024. 2 The appellant Sri. A. Kulanthaivel died on 18.04.2024.
3. The only issue involved in the above appeal is additions of Rs.4,66,49,320/- u/s 69A of the Act which represents cash deposits made in Corporation Bank CC Account No:560361000009745.
4. The facts of the case is that the above assessment has been framed in the individual status of the assessee, but the assessee has filed the return in his HUF status wherein the above bank account is duly reflected.
& 903/Chny/2025 A. Kulanthaivel :- 5 -:
5. In connection with the above appeal proceedings the following documents are enclosed: a. A copy of letter dated 12.05.2022 filed with ITO, Peramalur along with enclosures (Encl-1). b. A copy of letter dated 22.11.2023 filed with assessment unit, NFAC, New Delhi (Encl2).
6. As could be seen from the page no.13 of the assessment order dated 04.03.2024 the AO has gone on the footing the above bank account referred to in para 2 abiove is not reflected in the above bank account details. In page no 12 of the assessment order the balance sheet as on 31.03.2018 is duly extracted by the AO. In the above balance sheet the secured loan appears at an figure of Rs.9,94,83,718/-. The breakup for the above secured loans find a place under the secured loan in the schedule to the balance sheet and the above details is appearing in page 4 of the financial statements. The above financial statements was filed in the course of the assessment proceedings and it forms part of assessment records. The AO without considering the above factual position has made a addition of Rs.4,66,49,320/- which has resulted in high pitched demand of Rs.7,82,09,422/-. As could be seen from the enclosures filed the entire tally data for the FY 2017-18 has been uploaded in the course of the assessment proceedings.
7. The reasons for giving the individual PAN no to the bankers in respect of the bank accounts operated has also been explained in the letter dated 23.11.2023 filed with NFAC, Delhi.
There is no income for the assessee in the individual status. The entire business income belongs to the HUF of the assessee which is assessed in PAN no: AAGHK5619B 9. The assessee to satisfy the KYC norms of the bank was obliged to give the individual PAN card since the HUF PAN card does not have the photo of the assessee. 10. The appeal may be completed on the basis of the above facts and submissions. 11. The Assessee will furnish further details, if any required in connection with the finalization of the above appeal proceedings.
5.6 I have carefully considered the facts and evidences on record. The appellant Sri. A. Kulanthaivel died on 18.04.2024. The only issue involved in the present appeal is addition of Rs.4,66,49,320 u/s 69A of the Act which represents cash deposits made in Corporation Bank CC Account No:560361000009745. The facts of the case is that the above assessment has been framed in the individual status of the appellant, but the appellant has filed the return in his HUF status & 903/Chny/2025 A. Kulanthaivel :- 6 -: wherein the above bank account is duly reflected. As could be seen from the page no.13 of the assessment order dated 04.03.2024, the AO has gone on the footing the above bank account is not reflected in the above bank account details. In page no 12 of the assessment order, the balance sheet as on 31.03.2018 is duly extracted by the AO. In the above balance sheet, the secured loan appears at a figure of Rs.9,94,83,718. The breakup for the above secured loans finds place under the secured loan in the schedule to the balance sheet and the above details is appearing in page 4 of the financial statements. The above financial statements was also filed in the course of the assessment proceedings. 5.7 The appellant has wrongly given his individual PAN i.e AHRPK7764 instead of HUF PAN i.e AAGHK5619B to the bankers while opening bank accounts for business of M/s Sri Velmurugan Modern Rice Mill. The appellant submitted that to satisfy the KYC norms of the bank, he was obliged to give his individual PAN card since the HUF PAN card does not have the photo of the appellant. It is seen that there is no income for the appellant in the individual status and that the entire business income belongs to the HUF of the appellant which is assessed in PAN no: AAGHK5619B it is seen that in the course of assessment proceedings, the appellant has submitted the copy of the income tax return filed in his HUF capacity in the above PAN No. in which return all the bank accounts of the appellant which is the subject matter of assessment in the assessment order dated 04.03.2024 has been duly disclosed.Along with the financial statements, all schedules to the balance sheet has also been furnished. 5.8 In view of the above facts and discussion, as the appellant has filed the return in his HUF status wherein the Corporation Bank CC Account No:560361000009745is duly reflectedand cash deposit ofRs.4,66,49,320 is also accounted in the books of the HUF, I am of the considered view that the addition of Rs 4,66,49,320 as unexplained money u/s 69A of the Act in the hands of the appellant is not sustainable and is directed to be deleted. The appeal on Ground Nos 2 to 11 as thus treated as allowed.
Conclusion: In the result, appeal of the appellant is allowed.”
The ld. DR submitted that the assessee’s claim that the credit including cash deposits transactions of the assessee in the individual & 903/Chny/2025 A. Kulanthaivel :- 7 -: bank account were disclosed in the return of HUF is not substantiated by the assessee with corroborative evidences.
5. The ld. AR, Mr. T. S. Lakshmi Venkataraman FCA, vehemently supported the findings given in the impugned order. The ld. Counsel reiterated the arguments as mentioned at para 5.5 of the ld. CIT(A).
6. We have gone through the rival submissions, materials on record and the orders of the authorities below. We find that the assessee has inadvertently given his individual PAN i.e AHRPK7764 instead of HUF PAN i.e AAGHK5619B to the bankers while opening bank accounts for business of M/s Sri Velmurugan Modern Rice Mill. We also find that there is no income for the assessee in the individual status and the entire business income belongs to the HUF of the assessee having PAN No. AAGHK5619B. As noted by the ld.CIT(A) that from the copy of ITR filed in HUF capacity having PAN No. AAGHK5619B, wherein all the bank accounts of the assessee are placed, perusal of the schedule to secured loans, sundry creditors and loans creditors, all the bank accounts are find mentioned. Further, we are also of the view that there is no violation of Rule 46A of the Income Tax Rules, 1962.
Therefore, we do not wish to interfere with the order of the ld. CIT(A)
& 903/Chny/2025 A. Kulanthaivel :- 8 -: hence, we affirm the same and dismiss the appeal of the revenue. Our above order is equally applicable to the for AY 2019-20. Hence, we also dismiss the appeal of the revenue for AY 2019-20.
In result, both the appeals of Revenue are dismissed.
Order pronounced on 02nd day of September, 2025 at Chennai.