AI Drafter 
TaxTMI 
TaxTMI 
2026 (5) TMI 1462
X X X X Extracts X X X X
X X X X Extracts X X X X
....y, the case was selected for complete scrutiny through CASS due to the following reason:- 1. High risk transactions (PAN reported in STR) 2.1 The AO issued a show-cause notice to the assessee vide letter dated 09.12.2019. the relevant extract of the said order is reproduced as under: "4. The reason for selection of your case is "High risk transactions (PAN reported in STR)". To ascertain this fact, 360 degree profiling was checked. On perusal of STR (Suspicious Transaction Report) data available in your ITS, your PAN has been quoted in account no. 06860100007528. As per the information, you are the chairman in the account and Rs. 494.69 lacs were deposited during period 01.04.2016 to 30.12.2016 and Rs. 75.67 lacs in account till 30.12.2016 after demonetization of Rs. 500 & Rs. 1000 declared by GOI on 08.11.2016. In view of this, you are requested to kindly explain the source of cash deposited. In case of no reply and insufficient submissions the same may be added back to your income as unexplained credits u/s. 68 of the Income-tax Act, 1961. You are also show cause why this amount should not be disallowed and added back to your income." 2.2 The AO to ascerta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eing assessed at Circle Exemption 1(1), New Delhi vide PAN No. AAATD9552E. 2.4 Further, the assessee submitted a copy of the bank statement of F.Y. 2016-17 and copy of the bank account in the books of Deepak Gupta Education Trust and submitted that the assessment of Deepak Gupta Education Trust was also made under scrutiny for A.Y. 2016-17 and a copy of the assessment order was also enclosed. 2.5 However, the AO on perusal of the assessee's reply, noticed that the assessee had neither provided ITR of Deepak Gupta Education Trust for A.Y. 2017-18 nor any confirmation that the cash deposited was duly disclosed in ITR for A.Y. 2017-18 of Deepak Gupta Education Trust. The AO noted that by not providing any such details, assessee's failed to discharge its onus of proving the genuineness of the cash deposited and made an addition of Rs. 4,94,69,000/- u/s. 68 of the Act. The relevant extract of the said order is reproduced as under: "8. It is pertinent to mention here that the purpose and intent of the Government behind demonetization was to eradicate the Black Money from the system and bring out the hoarders of such money. When the announcement had been made on 08.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....under section 68 of the Act. treating the same as unexplained cash deposits. 9. The Ld. Assessing Officer observed that the appellant's PAN was linked with a bank account bearing number 06860100007528 held with Bank of Baroda, Pusa Road Branch. This account, as per the STR and bank records, was reportedly operated by the appellant as an authorized signatory and Chairman. A cash deposit of 4,94,69,000/-was made into this account during the demonetization period. The Assessing Officer concluded that the said deposit was not properly explained by the appellant, and therefore, treated the same as the appellant's unexplained income under section 68 of the Act. 10. During the appellate proceedings, the appellant submitted that the bank account in question does not belong to him in his individual capacity. The account stands in the name of M/s KCC Institute of Technology and Management, which is a constituent unit of Deepak Gupta Education Trust-a separate legal entity regularly assessed under PAN AAATD9552E with the DCIT, Exemption Circle 1(1), New Delhi. The appellant submitted that he is only an authorized signatory of the said bank account in his capaci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed nor owned by him. Rather, they are accounted for in the books of a separately assessed charitable trust, which has already been subjected to scrutiny. 15. In view of the above findings, the addition of 4,94,69,000/- made under section 68 of the Act is hereby deleted." 4. Aggrieved with said order, the Revenue filed an appeal before us on the following grounds of appeal: "1. That the learned CIT(A) erred in law and on facts in deleting the addition of Rs. 4,94,69,000/- made u/s. 68 of the Income Tax Act, 1961, by not appreciating the fact that the assessee's PAN was explicitly linked to the bank account and the assessee was operating as "Chairman" and "Authorized Signatory" of the said account, thereby exercising significant control. 2. That the learned CIT(A) erred in law and on facts in holding that the assessee had discharged the onus cast upon him u/s. 68 of the Act, especially concerning the source of cash deposit. The CIT(A) ignored that the addition was made primarily on the ground that the account formally belonged to a Trust, without verifying the underlying transaction for the source of cash in the Trust's hands and the complete dis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stating that the bank account in the name of M/s KCC Institute of Technology and Management account No. 06860100007528 in Bank of Baroda belongs to Deepak Gupta Education Trust PAN AAATD9552E assessed at Exemption Circle 1(1) New Delhi. (pg. 36 of PB) b. Copy of statement of affairs of Deepak Gupta Education Trust for the year ending on 31.03.2017 wherein under the annexure details of the balances with scheduled banks, the above said bank account is duly reflected. (pg. 42 of PB) d. Copy of the bank statement for FY 2016-17 of account no. 06860100007528 in the name of KCC Institute of technology & management which is a unit of M/s Deepak Gupta Education Trust and copy of the above said bank account in the books of Deepak Gupta Education Trust for FY 2016-17. (pg 49-216 and 217 to 241 of PB) In view In view of the above facts, it is quite clear the Ld. AO has erred in making the addition in the hand of the assessee on account of cash deposited in the bank account 06860100007528 in the name of KCC Institute of technology and Management which is a unit of M/s Deepak Gupta Education Trust and thus this bank account belongs to Deepak Gupta Education Trust and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al statements of M/s Deepak Gupta Education Trust. In view of the above judgement of CIT vs. P. Mohankala (2007) 29 ITR 278 (SC) and in N.R. Portfolio Pvt. Ltd. (2013) 35 DTR 126 (Del) are not applicable in the present fact of the case. 7. We have heard both the parties and perused the material available on record. In this case, it is undisputed fact that the bank account in the name of M/s KCC Institute of Technology and Management account No. 06860100007528 in Bank of Baroda belongs to Deepak Gupta Education Trust PAN AAATD9552E assessed at Exemption Circle 1(1) New Delhi. The AO has added the cash deposit of Rs. 4,94,69,000/- in the hands of the assessee in respect of this bank account no. 06860100007528 in Bank of Baroda. In this regard, the affidavit dated 05.12.2019 of the assessee, stating that the said account does not belong to him and he was operating the above account as the authorized signatory of M/s Deepak Gupta Education Trust. The relevant extract of the said affidavit is reproduced as under: "I, Deepak Gupta S/o Late. Sh. Gyan Parkash Gupta, R/o M-78, Connaught place, New Delhi-110001 do hereby solemnly affirm and declare on oath as under: ....