Balakrishnan Ramanathan Vs ITO (ITAT Chennai)
No Double Tax on Same Bank Credits: ITAT Directs Verification Where Income Already Offered in HUF’s Hands
The Chennai Bench of the ITAT, in Balakrishnan Ramanathan v. ITO (AY 2013-14), dealt with reassessment where the AO estimated income at 8% of total bank credits amounting to ₹2.71 crore, resulting in an addition of ₹21.68 lakh in the hands of the individual assessee. The assessee contended that the bank transactions pertained to businesses carried on by his HUF (petroleum retail and textile business) and that the income component had already been offered to tax in the HUF’s returns, making the addition in individual hands a case of double taxation.
The Tribunal noted that the assessee produced documentary evidence including HUF returns, tax audit report and financial statements supporting the claim. It was also observed that in other assessment years, similar additions had either been deleted by the CIT(A) or remanded by the Tribunal with directions to avoid duplication of income.
Following the principle laid down in the assessee’s own earlier cases, the ITAT held that where bank accounts and related income have already been accounted for in the HUF’s hands, no separate addition can be made in the individual’s assessment. The matter was therefore restored to the AO for limited verification of whether the impugned bank credits were already reflected in the HUF’s books. If so, the AO was directed to delete the addition in the individual’s hands. The appeal was accordingly allowed for statistical purposes
FULL TEXT OF THE ORDER OF ITAT CHENNAI
