Jigar Thakorbhai Dave Vs ITO (ITAT Surat)
The Surat Bench of the ITAT partly allowed the assessee’s appeals for AYs 2011-12 to 2014-15, holding that the entire bank deposits could not be treated as unexplained income of the assessee merely because the bank account stood in his name. The Tribunal accepted the assessee’s consistent explanation that the bank account was misused by a third party, Shri Mayur Barwaliya of Shree Impex, and that all credits in the account originated from Shree Impex and were immediately withdrawn by the said party.
On examination of bank statements and surrounding facts, the Tribunal found that the assessee had acted only as a conduit/account opener, and the real beneficiary of the transactions was Shree Impex. Therefore, the additions made by treating the gross bank credits as unexplained income were held to be unsustainable. However, since the assessee had permitted use of his bank account and facilitated the transactions, the Tribunal held that he derived a limited benefit. Accordingly, only commission income @ 0.5% of the total turnover routed through the bank account was directed to be taxed in the hands of the assessee. The same view was applied mutatis mutandis to all the assessment years involved.
FULL TEXT OF THE ORDER OF ITAT SURAT
