Amitsingh Vrajrajsingh Bhadoriya Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT) Ahmedabad allowed the appeals filed by Amitsingh Vrajrajsingh Bhadoriya against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]/National Faceless Appeal Centre, Delhi, which had upheld an addition of ₹4,00,82,154 made by the Assessing Officer (AO) under Section 69A of the Income Tax Act for the Assessment Year 2019-20. This addition was based on cash deposits in a specific bank account, No. 916010042512876, information for which was reportedly sourced from the Operation Insight of the revenue.
During the proceedings before the ITAT, the assessee’s representative argued that Mr. Bhadoriya maintained only one bank account, bearing No. 915020054131377, wherein the total cash deposits were around ₹1,00,00,000, which were attributed to his mattress trading business. A significant point raised was that the bank account No. 916010042512876, which formed the basis of the AO’s addition, did not belong to the assessee. The representative contended that the assessment order failed to provide any evidence establishing the assessee’s ownership of this particular bank account. Acknowledging the discrepancy and the assessee’s denial of ownership of the account relied upon by the AO, the ITAT found that the AO had not properly established the link between the disputed bank account and the assessee. Consequently, the Tribunal remanded the matter back to the Assessing Officer. The directions issued to the AO included obtaining statements from the bank to ascertain the ownership of both the bank account cited by the revenue and the one admitted by the assessee. The AO was further instructed to verify the total cash deposits against the turnover declared by the assessee and reconcile it with the assessee’s admitted bank account before passing a fresh assessment order. As the quantum addition was set aside for a fresh assessment, the penalty levied on the addition was also deleted, with the AO granted the liberty to initiate penalty proceedings based on the outcome of the new assessment order, contingent upon the assessee’s compliance with all notices issued during the reassessment process. Ultimately, both appeals of the assessee were allowed for statistical purposes, pending the outcome of the reassessment.
