Ramkumar Tallah Vs ITO (ITAT Bangalore)
Employee Cannot Be Taxed for Employer’s Funds – ITAT Remands 69A Addition; 69A Addition Unsustainable Without Proper Verification – Tribunal Grants Relief
Bangalore ITAT dealt with addition of cash deposits in employee’s bank account. Assessee, an employee of M/s. Dreamz Infra India Ltd., was subjected to reassessment u/s 147 r.w.s. 143(3) wherein AO treated cash deposits of ₹16.69 lakh in his bank account as unexplained money u/s 69A. CIT(A) confirmed the addition holding that the Assessee had failed to explain source of deposits.
Before Tribunal, Assessee contended that the issue was already decided in his favour for AY 2014-15 in ITA No.686/Bang/2025, where Tribunal had accepted that cash deposits were company funds deposited into his account for making online promotional payments. It was explained that deposits were immediately utilised towards payments to Google.com Bangalore & other business-related entities, leaving no personal benefit to Assessee. Revenue supported the orders of lower authorities but did not object if the matter was remanded for verification.
Tribunal noted that in AY 2014-15, it had categorically held that cash deposits in Assessee’s account were explained as employer’s money used for business promotions. AO in that year had overlooked the withdrawals & utilisation which clearly established that Assessee was only a conduit for company funds. It held that if deposits indeed belonged to the employer-company & Assessee derived no benefit, taxing them in his hands was unjustified. However, factual verification of withdrawals & utilisation was necessary.
