2023 (10) TMI 267 - AT - Income Tax

Assessment order set aside for incomplete bank statement; remanded for clarity on cash deposits ownership.

The Tribunal set aside the assessment order and remanded the matter to the CIT (A) as the appellant failed to provide a complete bank statement to clarify ... Unexplained cash deposits - assessee vehemently argued that the learned CIT(A) failed to appreciate the fact in right perspective and sufficient opportunity was not granted to the assessee - assessee drew our attention to the bank statement filed to demonstrate that the account in question was held by Mr. Surjit Singh in his individual capacity and the authorities below have wrongly taxed the deposits in assessee’s hand, which is independent juristic person - HELD THAT:- As in the knowledge of the learned CIT(A) that account in question was in individual capacity but he treated it to be of the assessee company. It is stated by the learned CIT(A) that before him the assessee had submitted the bank statement from 15.4.2013 to 28.4.2013. One of the objection of CIT(A) was that the assessee failed to submit complete bank statement for the entire period i.e. 1.1.2013 to 31.3.2014 so as to verify and reconcile any further transaction of cash deposit to the assessee company. Before Tribunal the assessee has filed a bank statement that covers the period starting from 1.4.2013 to 31.3.2014 for the relevant financial year. I have perused the bank statement as filed by the assessee. V Vide entry dated 29.4.2013 there is a transfer through RTGS. Undisputedly, the basis for making addition was that certain cash deposit was made in the bank account bank account no. 67170726788 maintained with State Bank of Travancore. This bank account is in the name of Shri Surjit Singh, Director of the assessee company. The assessee ought to have provided the complete bank statement to learned CIT(A) for verifying the transaction between the assessee and the account in question, therefore we hereby set aside the impugned assessment order and restore the matter to the file of the learned CIT(A) to decide the matter afresh, in accordance with law, of course, after affording reasonable opportunity of being heard to the parties.Appeal of the assessee stands allowed for statistical purposes only. Issues Involved:The issues involved in this case are the legality of the appellate order, justification of addition of Rs. 35,00,000, compliance with document requests, adequacy of opportunity provided by the CIT (Appeal), and ownership of cash deposits in a bank account.Legality of Appellate Order:The appellant raised concerns regarding the legality of the Appellate Order, stating it was illegal, unlawful, and against the natural law of justice. The grounds of appeal highlighted the perceived flaws in the order, leading to the appeal before the Tribunal.Justification of Addition of Rs. 35,00,000:The case involved an addition of Rs. 35,00,000 to the assessed income of the assessee. The AO made this addition due to a cash deposit of Rs. 3,00,000 in the company's bank account, for which the source was not adequately explained. The CIT (A) further enhanced this addition, leading to the appeal before the Tribunal.Compliance with Document Requests:The appellant contended that the CIT (Appeal) did not provide an appropriate opportunity to comply with the sought information, leading to a hasty dismissal of the appeal. The timeline of requests, responses, and the subsequent order was scrutinized to assess the adequacy of the opportunity provided.Ownership of Cash Deposits:The ownership of cash deposits in a specific bank account was disputed, with the appellant arguing that the account did not belong to the company but to an individual associated with the company. The discrepancy in attributing the cash deposits to the company without conclusive proof of ownership was a key point of contention.Judgment Details:The Tribunal reviewed the arguments presented by both parties regarding the addition of Rs. 35,00,000 to the assessed income. The appellant's counsel emphasized that the account in question belonged to an individual, not the company, based on documentary evidence provided. The Tribunal noted that the CIT (A) had acknowledged the individual ownership of the account but still attributed the deposits to the company.The Tribunal found that the appellant had not submitted a complete bank statement covering the relevant period, which could have clarified the transactions between the company and the individual's account. Due to this lack of comprehensive evidence, the Tribunal set aside the assessment order and remanded the matter to the CIT (A) for a fresh decision after providing a reasonable opportunity to both parties.Ultimately, the appeal of the assessee was allowed for statistical purposes only, indicating a procedural victory rather than a substantive change in the assessment.