No addition of unaccounted investment if transactions were via Banking Channels

ITO Vs Vaneet Mittal (ITAT Chandigarh)

Conclusion: Addition on account of investment made from undisclosed sources was deleted as as all transactions were made through banking channels and AO had made the addition in question on assumption and presumption basis.

Held: Assessee an individual filed his return of income for the assessment year under consideration declaring total income of Rs. 5,04,990/-. The case was selected for scrutiny and AO passed assessment order u/s 143(3) and determined the total income of assessee after making addition u/s 69. CIT(A) after hearing the assessee allowed the appeal and deleted the addition made by AO. AO challenged order of CIT(A). It was held that CIT (A) had passed the impugned order after examining each and every document placed on record by assessee to substantiate his claim. Assessee had placed on record the documentary evidence to establish that he received Rs. 1,57,00,000/- from M/s Mittal Traders; withdrawal of Rs. 10,00,000/- from his joint account with Smt. Kusum lata; withdrawal of Rs.60,00,000/- from joint Kissan Gold card bank account with S/Shri Rajinder Pal Mittal and Puneet Mittal. He had also placed on record the documentary evidence to establish that the loan transactions. AO had not doubted the identity of the persons or entities from whom assessee raised loans in question. CIT(A) further noticed that all the transactions had been made through banking channels. Thus, CIT(A) rightly deleted the addition made by AO. Moreover, AO had not pointed out any evidence on the basis of which he reached at the conclusion that assessee had obtained accommodation entries from the parties concerned. Since AO had made the addition in question on assumption and presumption basis, CIT(A) has rightly deleted the addition.

FULL TEXT OF THE ORDER OF ITAT CHANDIGARH

The Revenue has filed the present appeal against the order dated 05.03.2019 passed by Commissioner of Income Tax (Appeals), Patiala [for short ‘the CIT(A)’], whereby the Ld. CIT(A) has allowed the appeal filed by the assessee against the order passed by the AO 143(3) of the Income Tax Act, 1961 [for short ’the Act’] for the assessment year 2015-16.

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