ISHWAR PRASAD,SHAHDARA, DELHI vs. ASSESSING OFFICER, VIKAS BHAWAN,DELHI

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 16.02.2024, for assessment year 2017-18 2. The short issue in appeal is with regard to addition of Rs.17,89,000/- u/s. 69A of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’). The Assessing Officer made addition of Rs.17,89,000/- on account of cash deposits in Current account no.1045744394 with Central Bank of India. 3. Shri Nitin Kanwar appearing on behalf of the assessee submits that the assessee is senior citizen aged around 77 years. The assessee was running a kirana (AY 2017-18) shop under the name of style of M/s Rangilal Ishwar Prasad. He carried business up to 30.06.2011. The assessee transferred proprietorship of M/s. Rangilal Ishwar Prasad to his son Amit Singhal w.e.f. 01.07.2011. To substantiate his contention, the ld. Counsel for the assessee referred to Form DP-1 filed by Amit Singhal before the Department of Trade and Taxes Govt. of NCT of Delhi requesting for change in the ownership of proprietorship firm. He submitted that Current Account No.1045744394, wherein alleged cash deposits of Rs.17,89,000/- has been made and added in the hands of the assessee is attached to the proprietorship business in the name of M/s Rangilal Ishwar Prasad. The amount credited in said Current account is from sale proceeds. The said account has already been reflected in the return of income filed by Amit Singhal who is now proprietor of M/s Rangilal Ishwar Prasad. The assessee had filed an affidavit before the CIT(A) stating that the assessee is operating only one saving bank account no. 1214069532 with Central Bank of India branch Dilshad Garden, Delhi. The said affidavit is at page 297 of the paper book. He further referred to letter dated 13.01.2020 issued by Central Bank of India (at page 298 of the paper book) wherein the bank has mentioned that Current account no. 1045744394 was opened under proprietorship by Ishwar Prasad, on 08.12.2016 Shri Ishwar Prasad had given an application for change in signature and proprietorship in the aforesaid current account. From 26.12.2016 onwards Current Account No. 1045744394 was transferred to Amit Singhal proprietor of M/s. Rangilal Ishwar Prasad. The ld. Counsel for the assessee further submitted that though proprietorship of the business had changed hands in Financial Year 2011-12, but the assessee continue to operate Current account for convenience till December 2016. However, it is an undisputed fact that in the return of income for AY 2017-18 the current account has been reflected in the return of income filed by Amit Singhal. The assessee has placed on record ITRs of (AY 2017-18) Amit Singhal for AY 2015-16 to AY 2017-18 and AY 2023-24 at pages 78 to 261 of the paper book. The ld. Counsel for the assessee submitted that if the addition is made in the hands of the assessee this would result in double addition, one in the hand of Amit Singhal and second in the hands of the assessee.

The ld. Counsel for the assessee without prejudice to the primary submissions raised alternate contention that no addition could have been made u/s.69A of the Act in impugned assessment year as no tax rate was prescribed for said section.

Per contra, Shri Sanjay Kumar representing the department vehemently defending impugned order submits that as per assessee’s own contention, the assessee was operating bank account during the period relevant to assessment year under appeal, therefore, addition has been rightly made in the hands of the assessee.

Both sides heard, orders of the authorities below examined. As per contentions of the assessee, amount reflected in Current account no.1045744394 has already been offered to tax by son of the assessee Amit Singhal, now proprietor of M/s Rangilal Ishwar Prasad. The same amount cannot be added in the hands of the assesseee as well. The matter is restored back to the AO for the limited purpose to verify as to whether in the return of income for AY 2017-18, the son of the assessee Amit Singhal having PAN AUVPS 3940 E has reflected the current account no. 1045744394 in his return of income/computation of income. If, it is so, addition in hands of the assessee qua deposits in said current bank account cannot be made.