SRIDHAR S.,BANGALORE vs. ITO, BANGALORE

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ITA 401/BANG/2014Status: DisposedITAT Bangalore29 July 2016AY 2009-104 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the Assessing Officer had not considered all bank statements, specifically deposits in ICICI Bank. Therefore, the matter was restored to the Assessing Officer for fresh adjudication.

What were the facts?

The assessee's appeal concerned additions made for unexplained bank deposits and property investment. The CIT(A) enhanced the bank deposit addition while deleting the property investment addition.

What were the issues?

Whether the Assessing Officer properly examined the source of all bank deposits, considering all relevant bank accounts, before making additions.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH : BANGALORE

Before: SHRI SUNIL KUMAR YADAV & SHRI INTURI RAMA RAO

For Appellant: Shri H.N. Khincha, CA
For Respondent: Shri Bipin, C.N., Jt.CIT(DR)
Hearing: 04.07.2016Pronounced: 29.07.2016

Per Sunil Kumar Yadav, Judicial Member

1.

This appeal is preferred by the assessee against the order of the CIT(Appeals), LTU, Bangalore dated 31.01.2014 for the assessment year 2009-10 inter alia on the following grounds:-

“1. The Assessing Officer had erred in taxing a sum of Rs. 27,52,400/- as unexplained deposit in bank, as also a sum of Rs. 22,05,670/- as unexplained investment in purchase of property and the learned CIT(A) has erred in enhancing the addition on account of bank deposit to Rs. 31,33,400/- albeit deleting the addition of Rs. 22,05,670/-.

2. The learned CIT(A) has erred in passing the order without fully hearing the appellant. The order passed by CIT(A), being against the principles of natural justice and equity required to be quashed.

3. In any case and without prejudice the authorities below have erred in not properly appreciating the facts and the evidence available on proper appreciation of evidence and facts of the case it will clear that there are no unexplained cash deposit in the bank and therefore the entire addition on this account as enhanced by CIT(A) requires to be deleted.

4. On the facts of the case the appellant prays, that the addition as made by the Assessing Officer and as sustained / enhanced by the CIT(A) be deleted.

5. The appellant denies the liability to pay interest. The interest having been debited erroneously is to be deleted.

6.

In view of the above and on other grounds to be adduced at the time of hearing, it is requested that the impugned order be quashed or at least the addition sustained / enhanced be deleted and interest levied be also deleted.”

2.

During the course of hearing, the ld. counsel for the assessee submitted that assessment was framed on the basis of AIR information with respect to certain cash deposit in the bank. Though the assessee has furnished the source of investment, but it was not taken into account by the lower authorities.

3.

During the course of hearing, the ld. counsel for the assessee has invited our attention to two bank statements, one of Karnataka Bank Ltd. and the other of ICICI Bank Ltd., with the submission that the assessee has made withdrawal from ICICI Bank Ltd. and deposits in the Karnataka Bank Ltd., therefore the deposits are explained.

4.

During the course of hearing, a specific query was raised as to whether AIR information was received with respect to both the accounts of the assessee and in response thereto, it was stated that AIR information was received with respect to Karnataka Bank Ltd. From a careful perusal of both the bank statements, we find that the assessee has also made certain deposits in the ICICI Bank Ltd. Therefore, the total cash flow statement can only be examined in the light of both the statements of the bank. Since the assessee has made certain deposits in ICICI Bank Ltd. as well as Karnataka Bank Ltd., we are of the view that this issue requires fresh adjudication by the Assessing Officer. Accordingly, we set aside the order of the CIT(Appeals) and restore it to Assessing Officer with a direction to examine the source of deposits made by the assessee in both the banks. If the assessee fails to explain the source of deposits, the AO may make addition u/s. 69 of the Act. Accordingly, the order of the CIT(Appeals) is set aside and the matter is restored to the Assessing Officer.

5.

In the result, the appeal of the assessee is allowed for statistical purposes.

Pronounced in the open court on this 29th day of July, 2016.

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