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Facts
The assessee deposited Rs. 4,98,000/- and Rs. 1,30,000/- in their bank account, claiming it as a loan from relatives for a visa application. The visa was not approved, and the amount was returned. The lower authorities confirmed the additions as unexplained cash credits.
Held
The Tribunal held that the assessee provided affidavits from relatives and bank statements to support the loan claim. The issue of the PAN number was also addressed, directing the new PAN to be used for all purposes. The additions made by the lower authorities were found to be unjustified.
Key Issues
Whether the credits in the bank account were genuine loans from relatives, and whether the appeal was infructuous due to an incorrect PAN number.
Sections Cited
147, 148, 143(3)
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Income Tax Appellate Tribunal, CHANDIGARH
Before: SH. SANJAY GARG
ORDER The present appeal has been preferred by the assessee against the order dated 21.03.2025 of the Commissioner of Income Tax (Appeals) NFAC, Delhi [in short ‘the CIT (Appeals)] ‘pertaining to 2010-11 assessment year.
The assessee in this appeal is aggrieved by the action of ld.CIT (Appeals) in confirming the addition made by the Assessing Officer (in short ‘the AO’) of Rs.6,28,000/- on ITA 737/CHD/2025 A.Y. 2010-11 2 account of unexplained cash credits deposited in the bank account of the assessee.
The brief facts of the case are that an amount of Rs.4,98,000/- and Rs.1,30,000/- was found deposited in the bank account of the assessee. On being asked to explain the source of aforesaid deposits, the assessee explained that the said amounts were deposited by the assessee after getting the same as loan from the relatives. The assessee was aspiring and making efforts to seek Visa for going abroad and for that purpose, assessee had to show sufficient bank balance in his bank account. The assessee, therefore, had taken the aforesaid amount from his relatives Shri Gurmukh Singh and Peepal Singh, however, since Visa application of the assessee was not approved, therefore, the aforesaid amount was returned back by the assessee to his relatives. However, the lower authorities did not get satisfied with the aforesaid reply of the assessee and made the impugned additions.
This is the second round of litigation before this Tribunal. In the earlier round of litigation, it was pleaded before the Tribunal that lower authorities have rejected the contention of the assessee, mainly on the ground that the assessee could not furnish the evidence that the said
ITA 737/CHD/2025 A.Y. 2010-11 3 amount received from the relatives was returned back in the subsequent year. Therefore, the matter was restored by the Tribunal to the file of the AO with a direction to pass the order afresh after considering the evidence of the assessee in this respect. In the sed aside proceedings, the assessee did not appear and furnish the evidence of returning back the amount to his relatives. Therefore, the AO re-affirmed the additions made by him earlier.
Before the ld.CIT (Appeals), it was pleaded that infact, none of the notices sent by the AO were received by the assessee. It was further brought to the knowledge of the ld.CIT (Appeals) that infact, the assessee was earlier residing in House No. 1292, Sector 33-C, Chandigarh and that at that time, the assessee had applied for PAN number and PAN No. BMOPS9567B was allotted to the assessee. However, the said PAN Card was misplaced and the assessee being a young boy of 18 years was not aware about the technicalities of the Income Tax matters/PAN number. The assessee, thereafter, shifted to House No.1312, Phase-10, Mohali and as advised, the assessee applied for new PAN number and a new PAN number CDOPS9875E was allotted to the assessee. It was submitted before the CIT (Appeals) that the AO had sent the notices of hearing at the ITA 737/CHD/2025 A.Y. 2010-11 4 address/details as mentioned in the PAN data of the old PAN number. Therefore, none of the notices of hearing came to the notice of the assessee. Apart from that, the assessee relied upon the evidence in the shape of affidavits and bank statements of his relatives to prove that the aforesaid amount was received by the assessee from his relatives. The copies of affidavits of Shri Gurmukh Singh S/o Lal Singh and Shri Peepal Singh S/o Shri Makhan Singh have also been placed on the file, wherein, they both have affirmed that they own sufficient agricultural land and also maintained bank accounts and further that they had given amount of Rs.4,98,000/- and Rs.1,30,000/- respectively to the assessee. Even the amount of Rs.1,30,000/- was transferred by Shri Peepal Singh through banking channel to the bank account of the assessee. It has also been affirmed by Shri Peepal Singh in his affidavit that the assessee wanted to go to England alongwith his son and further, that his own son was now in England.
5.1 The ld. AR of the assessee has submitted that the assessee was a young boy of 18 years at that time and that the amount taken from his relatives was returned by the assessee later on after withdrawal from the bank account. That since the amount was returned in cash, therefore,
ITA 737/CHD/2025 A.Y. 2010-11 5 there was no documentary evidence available of returning the same through banking channel. He has further relied upon the affidavits of the relatives of the assessee and submitted that the aforesaid affidavits duly prove that the amount in question was taken as a loan by the assessee. He has further submitted that even otherwise, the assessee did not have any other source of income at that time and there was no question of any unexplained income of the assessee.
The ld. DR, however, has submitted that as per the certificate given on the Paper Book, the ld. AR of the assessee has not mentioned that the aforesaid affidavits of relatives were produced before the lower authorities. She has brought my attention to the Index Certificate of the Paper Book and submitted that the authority mentioned ‘before whom the documents placed in the Paper Book were submitted’ is ‘ITAT’ only. At this, ld. AR of the assessee submitted that infact the aforesaid affidavits were duly furnished before the ld.CIT (Appeals). That there was an inadvertent mistake in not mentioning the name of the CIT (Appeals) in the Index Certificate. She has brought my attention to appeal opening Form 35 before CIT (Appeals), wherein the description of the aforesaid documents i.e.
ITA 737/CHD/2025 A.Y. 2010-11 6 affidavits of the relatives and bank statement of relatives relied upon by the assessee before the ld.CIT (Appeals) has been duly mentioned. Therefore, it is duly established on the file that these affidavits were available before the CIT (Appeals).
6.1 So far as the issue relating to the PAN number is concerned, the ld.CIT (Appeals) has dismissed the appeal of the assessee as infructuous on account of mentioning of the new PAN number and not earlier PAN number. I do not find justification on the part of the ld.CIT (Appeals) in this respect. Admittedly, the old PAN number has been surrendered by the assessee, however, the said PAN number has not been deactivated by the Income Tax authorities. Since the assessee has been granted a new PAN number which also shows the correct details/address of the assessee, therefore, it is directed that the new PAN number of the assessee i.e. CDOPS9875E will be taken as a valid PAN number for all purposes i.e. not only for the purpose of adjudication of this appeal but also for any future correspondence. It is directed that the old PAN number of the assessee will be treated to have merged with this new PAN number. However, my above observations will not have any effect or bearing on any correspondence, assessment or ITA 737/CHD/2025 A.Y. 2010-11 7 other proceedings etc., whatsoever, issued at old PAN number. This direction is issued only to remove future confusion and related complications on this issue.
It is pertinent to mention here that the identity of the assessee has not been disputed. The assessee has also owned up the impugned transactions. If the assessee has been allotted two PAN numbers and the assessee insists that his new PAN number may be retained and the old PAN number may be deactivated, there is nothing wrong in that, rather, it will remove the future confusions and complications. The appeal before the ld.CIT (Appeals) was preferred by the assessee in his own name but by mentioning new PAN number and that itself does not invalidate the appeal filed before the ld.CIT (Appeals). Therefore, the impugned order of the ld.CIT (Appeals) holding that the appeal of the assessee was infructuous is set aside.
7.1 So far as the merits of the additions are concerned, as discussed above, the assessee has duly furnished the affidavits of his relatives who have duly affirmed that they had given the amounts in question to the assessee for depositing in the bank account so as to show assessee's
ITA 737/CHD/2025 A.Y. 2010-11 8 financial worthiness to the concerned authorities for the purpose of approval of his Visa to migrate abroad.
Considering the overall facts and circumstances of the case, I do not find any justification on the part of the lower authorities in making the impugned addition and the same is, accordingly, ordered to be deleted.
In the result, appeal of the assessee stands allowed.