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Facts
The Assessing Officer made an addition of Rs.13,98,500/- as unexplained cash deposits under section 69A of the Income-tax Act, 1961, made during the demonetization period. The assessee, Anil Kumar HUF, contended that these deposits were made in an account belonging to Ravi Dev Enterprises, a sole proprietorship of Anil Kumar Individual, a separate taxable entity, despite the HUF's PAN being linked inadvertently during account opening.
Held
The tribunal, following its own precedent in the assessee's case for an earlier assessment year, remitted the matter back to the Assessing Officer. The tribunal observed an inherent error in the assessment proceedings due to the dispute regarding the actual identity of the bank account holder, directing the AO to pass a fresh order after giving the assessee an opportunity of being heard.
Key Issues
Whether cash deposits made during demonetization by Anil Kumar Individual's proprietorship concern can be attributed to Anil Kumar HUF, and the correct identity of the bank account holder.
Sections Cited
69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ : NEW DELHI
Order : 18.07.2024 ORDER This appeal by the assessee is directed against the order of the ld. CIT (Appeals)/National Faceless Appeal Centre (NFAC) dated 12.12.2023 for the assessment year 2017-18. 2. Grounds of appeal
taken by the assessee read as under :- “1. It is contended that the Assessing Officer has erred in making the addition of Rs.13,98,500/- as unexplained cash deposits during the demonetization period.
2. It is contended that the two cash deposits on 10.11.2016 and 11.11.2016 aggregating to Rs.13,98,500/- were made in Axis Bank Account Number 912020020658201 of Ravi Dev Enterprises a sole proprietary of Anil Kumar Individual who is a separate taxable entity.
3. It is contended that the Assessing Officer has transgressed his jurisdiction in making the aforesaid addition of Rs.13,98,500/-.
4. It is contended that Rave Dev Enterprises is the proprietary of Anil Kumar Individual (PAN : AGGPK2735C) and not the appellant and the appellant does not have any business income. 5. It is contended that the demand raised of Rs.15,20,900/- which includes an interest of Rs.4,40,545/- needs to be reworked.” 3. There is a delay of 61 days in filing the appeal. Reasonable cause attributable is that the assessee has suffered from cancer which led to the delay. Upon hearing both the parties and perusing the records, I condone the delay. 4. Briefly stated the facts are that in this case, AO made addition of Rs.13,98,500/- on account of cash deposit made during the demonetisation period under section 69A of the Income-tax Act, 1961 (for short ‘the Act’). 5. Upon assessee’s appeal, ld. CIT (A) confirmed the addition. 6. Against this order, assessee has appealed before the ITAT. I have heard both the parties and perused the records. 7. Ld. Counsel for the assessee contended that in identical situation and in similar facts, ITAT has remitted the case of the assessee in for AY 2016-17 to the AO with certain directions. Hence, he prayed that this matter should also be remitted to the AO for similar directions.
Ld. DR for the Revenue did not have any serious objection to this proposition.
I note that ITAT in assessee’s own case (supra) has decided the similar issue as under :- “2. Heard and perused the record. The assessee, as HUF, has filed return of Rs.2,45,000/- and the case of the assessee was selected for scrutiny under CASS for the reason of cash deposit during demonetization period and the ld. AO on the basis of notices issued and replies filed, had made an addition to the extent of 20% out of total credit entries of Rs.2,42,63,815/- in bank account No.912020020658201 in the name of M/s. Ravi Devi Enterprises. The ld.CIT(A) has also sustained the addition. 3. As, before us, the Id. AR canvassed that in fact, this account is not the account of the assessee, Anil Kumar, HUF, but, this bank account is held by Anil Kumar in his individual capacity. It was submitted that inadvertently at the time of opening of the bank account, PAN Card No.AAFHA2224P was mentioned which is of Anil Kumar, HUF. The ld. AR has placed on record a copy of PAN card of Anil Kumar, individual bearing NO.AGGBK2735C. It is also submitted that Anil Kumar, in his individual capacity, has also filed return where this account was disclosed. The Id. DR, however, submitted that before the Id. tax authorities below, these facts were not asserted and there is no specific ground before us also in that regard. 4. After taking into consideration the grounds as raised, we are of the considered view that there is an inherent error in the assessment proceedings which have been initiated against the present appellant. Shri Anil Kumar, HUF, in regard to an account which is in the name of M/s Ravi Devi Enterprises and the proprietor of the same is Anil Kumar, individual. Whatever error has crept into the bank account leading to scrutiny assessment and the addition are based on a wrong fact about the real identity of the bank accountholder. 5. In the light of the aforesaid, we consider it an appropriate case to restore the issue on merits to the ld. Assessing Officer.
The ld. Assessing Officer shall give an opportunity of hearing to the assessee and pass a fresh order on merits. Consequently, the appeal is allowed for statistical purposes.”
Respectfully following the precedent, I remit the present case also to the AO. AO shall decide the case as per law and pass a fresh order on merits. Needless to add, assessee should given an opportunity of being heard.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 18th day of July, 2024.