INCOME TAX OFFICER WARD 48(1) NEW DELHI, DELHI vs. M/S. CHAUKERS, DELHI
Income Tax Appellate Tribunal, DELHI BENCH ‘B’: NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWALIncome Tax Officer, Ward-48(1), New Delhi.
[
PER MANISH AGARWAL, AM:
This appeal is filed by the Revenue against the order of the Ld.
Commissioner of Income Tax (Appeals), National Faceless Appeal
Centre (NFAC), Delhi [CIT(A) in short], dated 11.11.2024 in Appeal No.
CIT(A), Delhi-16/10721/2019-20 arising out of the assessment order passed u/s 144 of the Income Tax Act, 1961 (the Act, in short) dated
26.12.2019 for Assessment Year 2017-18. 2. Brief facts of the case are that the assessee is a partnership firm and was dealer of Hindustan Petroleum for selling LPG Cylinder. The AO was having information that there was heavy cash deposit of Rs.79,78,730/- in specified bank notes (SBN) in the bank account of ITO vs. Chaukers assessee during the period of demonetization and, therefore, the case of the assessee was taken up for scrutiny. During the course of assessment proceedings, it was submitted by the assessee that on 23.04.2011 one of the partnership Sh. Avinash C Kakar was died and, thereafter, the firm was continued in the sole partnership of the Sh.
Balaraj Bansal having PAN AKCPB7598Q and the all transactions in the bank account were carried by Sh. Balaraj Bansal in his individual capacity. It was submitted that since assessee firm was not in existence in the year under appeal, no addition should be made in the hands of the assessee firm more particularly when the PAN of Shri
Balraj Bansal was linked with the bank account in which the cash was deposited. However, AO based on the information that cash was deposited in the bank account made the addition on protective basis in the hands of the assessee in the interest of revenue of the entire cash and credit entries of Rs.4,67,17,233/- in said bank account as unexplained money of the assessee u/s 69A of the Act and further invoked the provisions of section 115BBE of the Act. In first appeal, ld. CIT(A) by observing that the income should taxed in the hands of rightful entity to whom it pertains. Accordingly, ld. CIT(A) deleted the protective addition made in the hands of the assessee firm.
Aggrieved by the said order, the Revenue is in appeal before the Tribunal by taking the following grounds of appeal: 1. On the facts and circumstances of the case, the Ld. CIT(A) erred in quashing the addition in the case of the assessee as no substantive information/evidence was available with the AO to distinguish the assessment proceedings in the case of Partnership Firm “Caukers” 2. The order passed by the Ld. CIT(A) is bad in law as the opportunity to the AO has not been provided to verify the claim that the same transaction considered during the assessment proceedings in the case of Sh. Balraj Bansal were again assessed as undisclosed income in the hands of partnership firm “Caukers” and rebut the same.
The appellant craves leave to add, alter or amend any of the grounds of appeal before or during the course of hearing of the appeal.”
After hearing both the parties at length and perusal of the order of lower authorities and the materials available before us, it is seen that the appellant M/s Caukers had not filed any return of income for the year under appeal for the sole reason that it was not in existence due to the death of one of the partner in the year 2011. However, the AO has made the additions on protective basis of the cash ab=nd credit entries in the bank account which actually belonged to the other partner namely Shri Balraj Bansal who become the proprietor of the firm M/s Chaukers after the death of other partner. The Ld. CIT(A) found that all the transactions were carried out by the proprietor of M/s Chaukers Sh. Balraj Bansal who already disclosed this transaction, therefore, the entire addition was deleted. Relevant observations of Ld. CIT(A) as contained at page 15 to 17 of its order are as reproduced under:
“I have gone through the above submissions of the Appellant and have considered the facts and evidence on record.
The appellant Caukers had not filed the return of income for the AY 2017-18. Later the AO completed the assessment by assessing total income at Rs
4.67.17.233/- by adding an amount of Rs. 4.67.17.233/- u/s 69A of the Income Tax Act, 1961, op protective basis. Being aggrieved by the same, the appellant has filed the instant appeal.
79,78,730/- in account No. 55020221166 with State Bank of Patiala during
Α.Υ. 2017-18. The appellant's AR stated to the AO that no income tax return for the said AY was filed as the partnership firm Mis Caukers was dissolves on 23/04/2011 due to death of one of the partners Le Mr. Avinash C Kakar and after that the same firm become sole proprietorship firm with same account no- 58020221166 and Proprietor name is Mr. Balraj Bansal On the basis of Allt Information available, a notice u/s 133(6) of the Income Tax Act.
1951 was issued to State Bank of Patiala. The data analysis of bank statement with State Bank of Patiala revealed various credit entries, including the cash deposits made during the F.Y. 2016-17, especially during demonetization period. At the time of demonetization all the transactions done in the above-mentioned account against PAN: AKCPB75980. Therefore, in the interest of revenue, an addition of Rs 4,67,17:233/-on total cash and credit entry in the aforesaid account, was made on protective basis as undisclosed money u/s 69A of the Act.
The appellant stated that the addition was made by the AO rejecting the contention that the credit entries in the bank statement and cash deposited during the demonetization period were already assessed to tax in the hands of Mr. Balraj Bansal (PAN) AKCPB7598Q). Credit entries and cash deposits in question were directly linked to the PAN of Mr. Balraj Bansal (PAN:
AKCPB7598Q) and not to the Partnership Firm, "Caukers" (PAN:
AADFC1241L). They have furnished corroborative evidence from the concerned bank confirming that the aforementioned transactions were exclusively linked to the bank account associated with Mr. Balraj Bansal's
PAN.
I have gone through all the submissions and documents furnished by the appellant. On perusal of documents it is observed that the partnership firm
M/s Caukers was dissolved on 23.04.2011 due to death of one of the partners i.e., Mr. Avinash Caukar and after that the same firm become sole proprietorship firm with same account no. 55020221166 and proprietor Mr.
Balraj Bansal. Certificate from the State Bank of India dated Sep 23, 2019
confirms that the bank account number 5520221166 is linked to PAN of Mr.
Balraj Bansal (PAN: AKCPB7598Q) and not to the Partnership Firm,
"Caukers" (PAN: AADFC1241L). Assessment of Mr. Balraj Bansal for AY
2017-18 was completed under Section 143(3), however, the same transactions were again assessed as undisclosed income in hands of ITO vs. Chaukers partnership firm "Cauker" which is already dissolved. Income cannot be assessed in the hands of two different assesses and it must be taxed in the hands of rightful entity. It is a settled principle of tax jurisprudence that income must be assessed in the hands of the rightful entity to whom it pertains. Judicial precedents and statutory interpretations consistently affirm that once income has been assessed in the hands of the correct assessee, no further assessment should be made against another entity without substantive evidence to the contrary.
In view of the factual matrix of the case at hand and the discussion as above, these grounds of appeal are, accordingly, allowed and the addition made by the AO on this account is, hereby, deleted.”
Before us, the Revenue has failed to controvert the findings given by Ld. CIT(A). Under these circumstances and further looking to the fact that these transactions were admittedly carried out by Sh. Balraj Bansal and not by the assessee firm, therefore, there is no occasion to make any addition even on protective basis in the hands of the assessee, therefore, we find no infirmity the order of Ld. CIT(A) in deleting the additions made which order is hereby upheld. Accordingly, both grounds of Revenue are dismissed.
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 04.06.2025. (SATBEER SINGH GODARA) (MANISH AGARWAL)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 29.08.2025
PK/Ps