ITO Vs Gulmohar Associates (ITAT Chandigarh)
The Income Tax Appellate Tribunal (ITAT), Chandigarh, decided an appeal filed by the Revenue and a cross-objection filed by the assessee against an order of the CIT(A)/NFAC for Assessment Year 2014–15. The case involved an addition of ₹8,44,23,000 made by the Assessing Officer under Section 69A of the Income-tax Act, 1961 on account of alleged unexplained cash and non-cash credits in the assessee’s bank account.
The assessee, a partnership firm engaged in real estate activities, had not filed its original return of income. Reassessment proceedings were initiated based on information from the Insight Portal, which alleged that the assessee maintained three bank accounts with ICICI Bank and had total credits of ₹19.20 crore. On this basis, proceedings under Section 147 were initiated and notice under Section 148 was issued. The assessee later filed its return declaring nil income and submitted that the credits represented capital contributions, unsecured loans, and advances from related parties.
During assessment, the Assessing Officer found credits of ₹8.44 crore in one bank account and treated them as unexplained under Section 69A, stating that the assessee failed to substantiate the source with proper documentary evidence. The AO also alleged that the bank account was used for routing funds. Accordingly, the entire amount was added to income and taxed under Section 115BBE.
