Somnath Bandopadhaya Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal, Ahmedabad, ruled that most deposits in the NRI’s bank accounts were satisfactorily explained, reducing additions under Section 69A from ₹2.28 crore to ₹63,133.
In Somnath Bandopadhaya v. ITO (ITAT Ahmedabad, order dated 16 January 2025), the Tribunal partly allowed the appeal of a non-resident assessee against the addition of ₹2.28 crore made as unexplained money under Section 69A read with Section 115BBE of the Income Tax Act, 1961, for Assessment Year 2018–19. The case arose from reassessment proceedings initiated after the Income Tax Department received information regarding substantial financial transactions by the assessee. A notice under Section 148 was issued, and the assessee subsequently filed a return declaring an income of ₹3,86,620. The Assessing Officer (AO), after issuing a draft assessment under Section 144C, proposed the addition, treating deposits in HDFC and SBI accounts and investments in SBI Life Insurance as unexplained. The assessee’s objections before the Dispute Resolution Panel (DRP) were dismissed, leading to the final assessment order dated 19 January 2024.
Before the Tribunal, the assessee contended that the AO and DRP failed to appreciate evidence substantiating the source of funds. The remand reports prepared by the AO during DRP proceedings (dated 30 November 2023 and 21 December 2023) had recorded that the assessee had satisfactorily explained the fixed deposits and corresponding transactions through NRE/NRI bank accounts with HDFC and SBI. The reports also verified that most entries were supported by foreign remittances and employment income abroad. Despite these findings, both the AO and DRP concluded that the explanations were unsatisfactory and confirmed the entire addition.
