Case Law Details
Balasaheb Sopan Yelwande Vs ITO (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT) Pune addressed the appeal filed by Balasaheb Sopan Yelwande for the Assessment Year 2015-16. The case arose from the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961. The primary issues in the appeal pertained to unexplained investment under Section 69, alleged on-money payments, and unexplained cash deposits.
The Tribunal first dealt with the unexplained investment of ₹9,90,000, which was disclosed in the assessee’s balance sheet. ITAT ruled that Section 69 could not be invoked in this case, as the investment source was already recorded. This finding aligns with judicial principles that no additions can be made if the taxpayer provides a legitimate explanation and the same is reflected in their financial records. Consequently, the addition was deleted.
The second issue concerned an addition of ₹10 lakhs for alleged on-money payments based on inquiries made with third parties. The Assessing Officer concluded the payment was unaccounted for, linking it to the assessee’s vendors. However, ITAT observed that the vendors themselves had not deposited the alleged cash in their bank accounts. It was held that the evidentiary basis for the addition was insufficient, leading to its deletion.
Lastly, ITAT addressed the addition of ₹3 lakhs as unexplained cash deposits. The assessee failed to provide satisfactory evidence for the source of the deposits, while the tax authorities overlooked his socio-economic background and potential past savings. In a balanced approach, ITAT reduced the addition to ₹1.5 lakhs, stipulating that this relief would not set a precedent for other cases.
In addition, ITAT condoned the delay of 59 days in filing the appeal, referencing the Supreme Court’s judgment in Collector, Land Acquisition v. Mst. Katiji (167 ITR 471), which emphasized that procedural technicalities should not hinder substantial justice. The appeal was partly allowed for statistical purposes, providing the assessee relief on several grounds.
This judgment reaffirms the principle that additions under Section 69 require proper substantiation, and mere suspicion or procedural lapses cannot override evidentiary requirements.
The case was represented by CA Kishor Phadke (Assisted by CA Saurabh Jadhav)
FULL TEXT OF THE ORDER OF ITAT PUNE
This assessee’s appeal for assessment year 2015-16, arises against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/ 2023-24/1055751821(1), dated 05.09.2023, in proceedings u/s. 147 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties. Case file perused.
2. The assessee pleads the following substantive grounds in the instant appeal :
3. The first and foremost issue herein is that of sec.69 unexplained investment addition of Rs.9,90,000/- alleged to have been made by the assessee in the relevant previous year. There is no dispute about the fact that the assessee had indeed made the impugned investment which was duly disclosed in the balance-sheet. This being the clinching fact, learned DR could hardly dispute that sec.69 herein would not come into play once the assessee had duly recorded the said land purchase in his balance-sheet in the relevant previous year. The impugned addition is deleted for this precise reason alone.
4. Next comes the second issue of cash payment addition of Rs. 10 lakhs made in assessee’s hands on the ground that he had made on-money payment to his corresponding vendor(s). The relevant facts of the instant issue appears little bit confusing as per Assessing Officer’s assessment discussion dated 15.02.2022 wherein the learned departmental authorities appears to have conducted their enquiries from one Shri Nitin G Shelke who had deposited Rs.30 lakhs belonging to Shri Ganesh Sabale and Shri Ramesh Sabale. These latter people happen to be the assessee’s vendor(s). It is on the basis of this crucial link that both the learned lower authorities have concluded the relevant facts emanating from the foregoing enquiry to make the impugned addition in assessee’s hands. The Revenue vehemently supported the same during the course of hearing. I find in this factual backdrop that there is hardly any justification to make the impugned addition once the assessee’s vendor(s) have not even deposited the cash amount in their own bank account(s). The same stands deleted in very terms.
5. Lastly comes the assessee’s very substantive grounds seeking to delete unexplained cash deposit(s) addition of Rs.3 lakhs made by both the learned lower authorities. It emerges that neither the assessee has been able to prove satisfactorily the source of the impugned cash deposit(s) nor the department has given the benefit of his socio-economic status vis-à-vis past savings. Faced with this situation, I deem it appropriate in the larger interest of justice to re-compute the impugned addition of Rs.3 lakhs to a lump sum amount of Rs. 1.50 lakhs only with a rider that the same shall not be treated as a precedent in other case(s). The assessee gets relief of Rs. 1,50,000/- in otherwords. Necessary computation shall follow as per law. Ordered accordingly.
6. Delay of 59 days in filing the instant appeal is condoned as per assessee’s solemn averments in light of Collector, Land Acquisition vs., MST Katiji [1987] 167 ITR 471 (SC) having settled the law long back that all such technical aspects must make a way for the cause of substantial justice.
7. This assessee’s appeal is partly allowed for statistical purposes in above terms.
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