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Facts
The appeals by the assessee for AY 2016-17 to 2018-19 arise from a common order by the CIT(A). The primary issue for AY 2016-17 is the confirmation of an addition of Rs. 5 Lacs by the AO under Section 69. This addition was based on a bank credit claimed by the assessee as a loan, but for which no supporting documents were provided.
Held
The Assessing Officer (AO) treated a credit of Rs. 5 Lacs in the assessee's bank account as an unexplained investment under Section 69, as the assessee failed to provide proof or details of the loan. The CIT(A) confirmed this addition. The assessee's AR argued that the addition under Section 69 was incorrect as it applied to investments, not advances or loans, while the CIT-DR contended that quoting the wrong section does not invalidate the addition.
Key Issues
Whether the addition of Rs. 5 Lacs as unexplained investment under Section 69 is justified when the assessee claimed it as a loan, but failed to provide supporting evidence? Whether quoting the wrong section by the AO invalidates the addition?
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: 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