SATBIR MAHATO,KOLKATA vs. ITO, WARD 24(3), HOOGHLY

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ITA 1155/KOL/2023Status: DisposedITAT Kolkata17 March 2025AY 2009-104 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 ₹14,06,250/- sustained by the CIT(A) in the hands of the assessee was uncalled for and unwarranted. The Tribunal noted that it was undisputed that the cash deposited in the assessee's bank account belonged to Shri Devesh Upadhyaya, who opened the account using the assessee's PAN and operated it for providing accommodation entries. Shri Devesh Upadhyaya, in his statement recorded under Section 131, admitted that the cash belonged to him and was used for accommodation entries. Furthermore, the Tribunal observed that in Shri Devesh Upadhyaya's assessment framed under Section 143(3) read with Section 147, his income was assessed at 0.10% of the total cash deposits. Therefore, since the income was already assessed in the hands of Shri Devesh Upadhyaya, the addition sustained in the assessee's hands was not justified. The Tribunal set aside the order of the CIT(A) on this issue and directed the AO to delete the addition.

What were the facts?

The assessee, Satbir Mahato, is in appeal against the order of the National Faceless Appeal Centre, Delhi (NFAC), dated 31.0.2023, for Assessment Year 2009-10. The assessee's case was reopened under Section 147 of the Income Tax Act, 1961, due to cash deposits into his bank account. The Assessing Officer (AO) noted that the assessee claimed the cash belonged to Shri Devesh Upadhyaya, who used the assessee's PAN to open and operate an ICICI Bank account. Shri Devesh Upadhyaya admitted in a statement recorded under Section 131 that the cash, aggregating to ₹18.75 crores, belonged to him and was used for accommodation entries. The AO estimated income at 8% of the total deposit, making an addition of ₹1.50 crore. The CIT(A) partly allowed the appeal, deleting ₹1,35,93,750/- and sustaining an addition of ₹14,06,250/-.

What were the issues?

1. Whether the addition of ₹14,06,250/- sustained by the CIT(A) in the hands of the assessee is justified, considering that the cash deposits and accommodation entries were admitted to be by Shri Devesh Upadhyaya, and his income was assessed accordingly. Assessee's Contention: The assessee argued that the entire cash deposited in the bank account belonged to Shri Devesh Upadhyaya, who used the assessee's PAN to open and operate the account for providing accommodation entries. The assessee contended that since Shri Devesh Upadhyaya admitted this and his income was assessed on these deposits, the addition in the assessee's hands is unwarranted. Revenue's Contention: The revenue, through the AO and DR, sought to uphold the addition sustained by the CIT(A), implying that the assessee was liable for the deposits made in his name, irrespective of the ultimate beneficial owner.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 131,Section 133(6),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Somnath Ghosh, AR
For Respondent: Shri Bonnine Debbarma, DR
Hearing: 06.03.2025Pronounced: 17.03.2025

(Assessment Year:2009-10) ITO, Ward 24(3) Satbir Mahato Aaykar Bhavan, Hooghly, C/o. S.N. Ghosh & Associates, Khadina More, G.T. Road, Advocates, 2, Garstin Place, 2nd Floor, Suite No.203, Off Hare 3rd Floor, P.O. chinsurah, Vs. Street, Kolkata-700001, P.S. Chinsurah, Dist-712101, West Bengal West Bengal (Respondent) (Appellant) PAN No. AWKPM4651K Assessee by : Shri Somnath Ghosh, AR Revenue by : Shri Bonnine Debbarma, DR Date of hearing: 06.03.2025 Date of pronouncement : 17.03.2025 O R D E R Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 31.0.2023 for the AY 2009-10.

2.

At the time of hearing, the assessee only pressed the issue raised on merit which is against the order of ld. CIT (A) confirming the addition of ₹14,06,250/- as against the addition of ₹1,50,00,000/- made by the ld. Assessing Officer.

3.

The facts in brief are that the assessee filed the return of income on 18.05.2016, declaring the total income of ₹18,600/-. The case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on the ground that the assessee deposited huge cash into his bank account. Accordingly, the statutory notices were issued along with questionnaire, which were duly served upon the assessee. The

4.

In the appellate proceedings, the ld. CIT (A) after following the decision of the various co-ordinate Benches partly allowed the appeal by deleting the addition to the tune of ₹1,35,93,750/- and sustaining the addition to the extent of ₹14,06,250/- at 0.75% of total accommodation entries provided. Now, the assessee is in appeal before us challenging the part confirmation of the order of the ld. Assessing Officer.

5.

After hearing the rival contentions and perusing the materials available on record, we find that undisputedly the cash was deposited in the assessee’s bank account in ICICI bank account which belonged

6.

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

Order pronounced in the open court on 17.03.2025.

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