Loading judgment…
Facts
The appeal was filed by the assessee against the order of the CIT(A) confirming additions made by the Assessing Officer for AY 2005-06. The assessee claimed the source of investment was from HUF funds, and the return of income was filed for the first time in AY 2011-12. The revenue argued that a specific bank account did not belong to the HUF.
Held
The Tribunal noted that the existence of the HUF was accepted in a previous appeal. The assessee claimed the funds deposited in the bank account were out of HUF income. Given that the HUF's existence is undisputed and it possesses substantial agricultural land, the deposits are considered to be from the HUF's agricultural income, which explains the investment.
Key Issues
Whether the additions made on account of unexplained investment are to be confirmed when the source of funds is claimed to be from HUF agricultural income, the existence of which is accepted.
Sections Cited
250 of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “PATNA” BENCH, PATNA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
The captioned appeal by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeal), Patna-3 [hereinafter referred to as “the Ld. CIT(A)”] vide order no. ITBA/APL/S/250/2022-23/1045027357(1) dated 30.08.2022 passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2005-06.
None represented on behalf of the assessee and Shri Ashwani Kr. Singal, JCIT appeared on behalf of the revenue.
It was submitted by the Ld. DR that the additions are in respect of undisclosed investment made by the assessee. It was the submission that the assessee has claimed the source of the fund for the investment to be out of HUF fund. It was the submission that the assessee has filed his return of income for the first time in Assessment Year 2011-12 only. It was the submission that the best case scenario in the case would be to confirm the addition of Rs.24,79,237/- representing the unexplained deposit in the bank account no. 1143 with Reserve Bank Employee’s Co-operative and Thrift and Credit Society Ltd. which is alleged to belong to the HUF but nothing has been shown that the said account belonged to the HUF. It was the submission that the unexplained investment could be treated as being sourced from this fund and consequently, the benefit of telescoping may be granted to the assessee.
We have heard the rival contentions and have perused the material available in the paper book. A perusal of the order of the Tribunal in the assessee’s case in dated 03.07.2014 clearly shows that the existence of the HUF has been accepted. The assessee has never claimed that the bank account no. 1143 belonged to the HUF. His claim is that the funds deposited in the said bank account were out of the HUF’s income. The fact that the HUF’s existence is no more disputed and it is also seen that the HUF has substantial agricultural land as has been evidenced in the paper book filed, we are of the view that the amount of Rs.24,79,237/- would have to be treated as the funds of the HUF. The assessee has also been claiming that the sources of the investment are out of the funds of the HUF. As it is noticed that the deposit of Rs.24,79,237/- on various dates in the bank account no. 1143 is substantially out of the agricultural income of the HUF, these funds are available for making this investment which has treated as undisclosed investment. This being so, the additions as made by the Assessing Officer and as confirmed by the Ld. CIT(A) stands deleted as the sums are explained.