BALAKRISHNAN RAMANATHAN,GOBICHETTIPALAYAM vs. ITO, WARD-2(1), ERODE

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ITA 2279/CHNY/2024Status: DisposedITAT Chennai03 February 2025AY 2011-12Bench: HON’BLE SHRI ABY T. VARKEY (Judicial Member), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)3 pages

AI SummaryRemanded

Facts

The assessee did not file an income tax return, and his case was reopened due to cash deposits in his savings bank account. He claimed these deposits belonged to a HUF engaged in textile and petrol bunk business, which had already accounted for these transactions. The AO rejected this, estimated income, and framed an assessment u/s 143(3) r.w.s. 147, which the CIT(A) confirmed due to lack of evidence.

Held

The Tribunal noted the assessee submitted additional documents for the HUF, including returns, financials, and bank balances. Observing that similar additions for a later AY were deleted by the CIT(A) and that the bank transactions appeared accounted for in the HUF books, the Tribunal restored the assessment to the AO for limited verification. If the bank account was already accounted for by the HUF, no separate addition should be made to the individual's income.

Key Issues

Whether cash deposits in an individual's bank account, claimed to be part of a HUF's business income already accounted for, can be assessed as the individual's income, and the sufficiency of evidence to substantiate the source of cash deposits.

Sections Cited

143(3), 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, CHENNAI

Before: HON’BLE SHRI ABY T. VARKEY, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2011-12 arises out of the order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-8, Delhi [CIT(A)] dated 25-06-2024 in the matter of an assessment framed by the Ld. AO u/s 143(3) r.w.s. 147 of the Act on 10- 10-2019. The registry has noted delay of 5 days in the appeal which stands condoned. 2. Upon perusal of assessment order, it could be seen that the assessee did not file its return of income. Since the assessee deposited cash in savings bank account, the case was reopened wherein the assessee was directed to substantiate the source of the same. The assessee admitted salary income of Rs.1.20 Lacs. The assessee stated that the cash deposits in ICICI Bank Account and other Savings Bank Account relates to HUF Account who was doing textile business and petrol bunk business in the name of B. Ramanathan (HUF). The transactions in the bank accounts were stated to be accounted for in the hands of HUF. The assessee also stated that the bank mentioned PAN of individual assessee instead of PAN of HUF. Since the requisite details were not forthcoming form the assessee, Ld. AO rejected the same and estimated income of 8% against total cash deposits and framed the assessment. The Ld. CIT(A) confirmed the same for want of sufficient documentary evidences from the assessee, in that regard. Aggrieved, the assessee is in further appeal before us.

The Ld. AR placed on record a paper-book which contains return of income and computation of income of HUF for this year. The financial statements as well as tax audit report of HUF has also been placed on record along-with summary of closing bank balances. The Ld. AR also stated that similar addition was made by Ld. AO in the hands of the individual-assessee for AY 2017-18 which was deleted by Ld. CIT(A) vide order dated 18-12-2024 by accepting the similar explanation of the assessee. We are of the view that all these documents would be vital to strengthen the claim of the assessee. Apparently, the impugned bank transactions have been accounted for in the books of HUF. Therefore, we restore the assessment back to the file of Ld. AO for limited purpose of verification of the said fact. If the said bank account has already been accounted for by HUF, no separate addition would be made in the hands of the assessee. We order so. No other ground has been urged in the appeal.