TaxTMI 
TaxTMI 
2024 (9) TMI 1974
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....me Tax Act, 1961(hereinafter referred to as "the Act"), amounting to Rs. 2,64,72,058/-as unexplained money and taxed under Section 115BBE of the Act at the rate of 60%. The AO passed the order under Section 144 of the Act for the A.Y. 2017-18. Facts of the Case: 2. The assessee is engaged in the business of petroleum products dealership under the name and style of Bapa Sitaram Petroleum, operating as a dealer of Indian Oil Corporation Limited (IOC), a public sector undertaking since 2006. For the Assessment Year 2017-18, the appellant filed her return of income under the PAN AFBPV2339B, declaring a total income of Rs. 3,73,000/-, based on the audited books of account. The tax audit report in Form 3CB was also prepared and filed using ....
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....lant's use of two PANs appeared to be intentional, aimed at compartmentalizing financial transactions. The AO believed that the appellant used the original PAN (AFBPV2339B) for filing returns while using the duplicate PAN (AQHPV6393E) to handle substantial cash deposits, thereby avoiding full disclosure in the return filed. 2.3. Due to the assessee's failure to furnish any explanation or details about the cash deposits, the AO invoked Section 144 of the Act to make a best judgment assessment based on the available material. The AO treated the cash deposits and credit entries amounting to Rs. 2,64,72,058/- in the assessee's bank account as unexplained money under Section 69A of the Act. The AO determined that these transactions repres....
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....e at Rs. 2,64,72,058/- that was done by him for the untenable reasons as specified in the order. 2. The learned CIT(A), while dismissing the appeal, erred in law and on fact in not appreciating that all the transactions carried out through the specified banking account were- i). recorded in the books of account regularly maintained; ii). the same stood fully explained; iii). these books of account were audited by an independent Chartered Accountant who had issued unqualified audit report; (iv). the transactions recorded in the books of account were considered as such for quantification of the total income chargeable to tax; and (v). the return of income under section 139 of the Act was v....
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.... no intent to evade taxes or conceal income, as all transactions were duly accounted for in the books maintained under the original PAN. The AR also stated that there was not sufficient opportunity given to provide documentary evidence of the application of the new PAN. 4.1. The AR also explained with the help of a copy of profit and loss account that the assessee in her return of income has disclosed sale of Rs. 3,02,21,195/- and since the business is in small town, most of the sale is cash sale which is deposited in bank accounts. The AR also stated that the AO has added all credit side of the bank to the income without taking note of debit entries which are payments to IOC i.e. against purchases. 5. On the other hand, the Departmen....
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....ction 69A of the Act, based solely on the existence of substantial cash deposits linked to the second PAN. The AO's assessment lacked a proper verification process that should have involved cross-referencing the deposits with the appellant's audited financial statements, which were maintained under the original PAN. The CIT(A), in upholding the assessment order, also did not make any independent effort to verify the appellant's submissions, resulting in a confirmation of an addition that was based on incomplete and uncorrelated facts. 6.2. In our considered view that the AO did not make necessary inquiries with the PAN issuing authority (UTI) to ascertain whether the second PAN was inadvertently issued as a duplicate or whether steps wer....