ITO Vs Rajendra Shivhare (ITAT Raipur)
ITAT Raipur held that addition towards unexplained investment unsustainable as AO failed to place on record any material which would conclusively establish that the said society was a benamidar of the assessee. Accordingly, addition based on bald allegation couldn’t be accepted.
Facts- Original assessment was framed by the A.O in the case of the assessee vide order passed u/s.144 of the Act, determining his total income at Rs. 1,76,68,313/-, which thereafter was upheld by the CIT(Appeals).
On appeal, the ITAT, Bilaspur set-aside the order of the CIT(Appeals) and restored the matter to the file of the AO for fresh consideration after affording a reasonable opportunity to the assessee. AO pursuant to the aforesaid direction of the Tribunal framed assessment vide his order passed u/s. 144 r.w.s. 254 assessing the total income of the assessee at Rs. 1,71,30,153 / – after making various additions. CIT(A) partly allowed the appeal. Being aggrieved, revenue has preferred the present appeal.
Conclusion- When the assessee had duly demonstrated the investments in the immovable properties were sourced from his capital and withdrawals from his current account with the society i.e. CMS, therefore, there was no justifiable reason for the A.O to have drawn any adverse inferences in the hands of the assessee by holding any part of the same as unexplained investment u/s.69 of the Act.
When the source of the bank deposits had duly been explained by the assessee, therefore, there was no justification for the A.O to have held the same as unexplained deposits in the hands of the assessee. Also, we concur with the view taken by the CIT(Appeals) that now when the account of the borrower and lender duly substantiated the claim of the assessee that interest accrued on his bank deposits were transmitted to CMS, therefore, no addition of the same could have been made in his hands.
Held that as CMS is a society registered under the Societies Registration Act; and the A.O had failed to place on record any material which would conclusively establish that the said society was a benamidar of the assessee, therefore, the observation of the A.O which were merely based on bald allegation could not be accepted. We, thus, in terms of our aforesaid observation are persuaded to subscribe to the view taken by the CIT(Appeals), and uphold the same on the basis of which he had vacated the addition of Rs.9,03,000/- a/w. interest accrued on such deposits of Rs.40,544/-.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
1. The present appeal filed by the revenue is directed against the order passed by the CIT(Appeals), Raipur dated 27.09.2011, which in turn arises from the order passed by the A.O. u/ss. 144/254 of the Income-tax Act, 1961 (for short ‘Act’), dated 24.12.2010 for A.Y.2005-06. The revenue has assailed the impugned order on the following grounds of appeal before us :
“1. “Whether in law and on facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 17,50,000/- made by the AO on account of unexplained investment in immovable properties u/s.69 of the I.T. Act, 1961”
2. “Whether in law and on facts & circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 17,67,600/- made by the AO on account of unexplained investment in movable properties u/s. 69 of the I.T. Act, 1961”
3. Whether in law and on facts & circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 1,24,30,799/- made by the AO on account of unexplained investment in Bank account u/s.69 of the I.T. Act,1961 and interest accrued at Rs.1,78,210/- on these deposits “
4. Whether in law and on facts & circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.9,03,000/- made by the AO on account of unexplained investment in bank account in the name of Chhattisgarh u/s.69 of the I.T.Act,1961 and interest accrued at Rs.40,544/- on these deposits”
5. Whether in law and on facts & circumstances of the case, the CIT(A) has erred in treating Chhattisgarh Mehar Samaj as a separate entity for assessment instead of treating assessee as real owner of funds/investments in question.
6. “The order of the Ld.CIT(A) is erroneous both in law and on facts”
7. “Any other ground that may be adduced at the time of hearing.”
2. Original assessment was framed by the A.O in the case of the assessee vide order passed u/s.144 of the Act dated 20.12.2017, determining his total income at Rs. 1,76,68,313/-, which thereafter was upheld by the CIT(Appeals) vide his order dated 15.10.2008.
3. On appeal, the ITAT, Bilaspur vide his order dated 18.09.2009 set-aside the order of the CIT(Appeals) and restored the matter to the file of the O for fresh consideration after affording a reasonable opportunity to the assessee. The A.O pursuant to the aforesaid direction of the Tribunal framed assessment vide his order passed u/s. 144 r.w.s. 254 dated 24.12.2010 assessing the total income of the assessee at Rs. 1,71,30,153 / – after making following additions:
