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Facts
The assessee received a credit of Rs. 5,00,000/- in their bank account, claiming it as a loan. However, the assessee failed to provide any proof or confirmation for this loan. The AO treated this amount as an unexplained investment under Section 69 of the Income Tax Act and added it to the total income.
Held
The Tribunal observed that the assessee failed to produce supporting documents for the credit received in the bank account. The AO treated it as unexplained investment under Section 69. The CIT(A) confirmed this addition. The Tribunal noted that Section 69 is applicable for unexplained investments.
Key Issues
Whether the credit of Rs. 5,00,000/- in the bank account, claimed as loan, can be treated as unexplained investment under Section 69 when no supporting evidence was produced by the assessee?
Sections Cited
69, 153C, 271(1)(C)
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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा)रण वष) / Assessment Year: 2016-17) & 2. आयकरअपील सं./ (िनधा)रण वष) / Assessment Year: 2017-18) & 3. आयकरअपील सं./ (िनधा)रण वष) / Assessment Year: 2018-19) Shri Sarangabani Kirubakaran DCIT बनाम/ 17/6, First Pillayar Koil Street, Circle-1(2) Vs. Ekkatuthangal, Chennai-600 032. Chennai. �थायीलेखासं./जीआइआरसं./PAN/GIR No. BUMPK-0892-B (अपीलाथ�/Appellant) : (� थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Ms.T.V. Muthu Abirami (Advocate)-Ld.AR � थ�कीओरसे/Respondent by : Shri Nilay Baran Som (CIT) -Ld. DR सुनवाईकीतारीख/Date of Hearing : 25-07-2024 घोषणाकीतारीख /Date of Pronouncement : 04-09-2024 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeals by assessee for Assessment Years (AY) 2016- 17 to 2018-19 arises out of the common order of learned Commissioner of Income Tax (Appeals)-18, Chennai, [CIT(A)] dated 13-09-2023 in the matter of separate assessment framed by the Ld. AO u/s.153C of the Act. Facts as well as issues are substantially the same. First, we take up appeal for AY 2016-17 wherein the only grievance of the assessee is confirmation of addition u/s 69 for Rs.5 Lacs.
The Ld AR advanced arguments and submitted that impugned addition u/s 69 represent advance received through banking channels which could not be added u/s 69. This addition does not satisfy the ingredients of Sec.69 since this section is applicable for unexplained investments only. The Ld. CIT-DR, on the other hand, filed written submissions and submitted that the quoting of wrong section would not vitiate the addition made by Ld. AO as held in various judicial decisions. The copies of the same has been placed on record. Having heard rival submissions and upon perusal of case records, our adjudication would be as under.
From perusal of para-6.2 of the assessment order, it could be seen that Ld. AO has made impugned addition of Rs.5 Lacs u/s 69 by observing as under: - 6.2 There is a credit of Rs.5,00,000/- in assessee’s bank book which he claims to be “Loan from Mr Sreejith still pending”. The assessee has not produced any proof in support of his claim such as confirmation from Mr. Sreejith, purpose of loans received. Therefore, in the absence of any evidences, the nature and source for the credit of Rs.5,00,000/- remains unexplained. Hence, an amount of Rs.5,00,000/- is treated as unexplained investment u/s 69 in the books of the assessee added to the total income of the assessee. Penalty proceedings u/s 271(1)© is initiated separately.
The Ld. CIT(A) has confirmed the same. 4. Quite clearly, Ld. AO has made addition of credit receipt in bank account of the assessee on the ground that the assessee failed to adduce supporting documents. The amount thus received by the assessee has been treated as unexplained investment u/s 69. We are of the opinion that the provisions of Sec.69 are applicable only where the