Pushpakant Punjalal Chokshi Vs. ITO (ITAT Ahmedabad)
Cash Deposit in HUF’s Account cannot be taxed in Individual’s Hands – ITAT Ahmedabad deletes 69A addition
Cash Deposit in HUF’s Account cannot be taxed in Individual’s Hands – ITAT Ahmedabad deletes 69A addition Pushpakant Punjalal Chokshi, proprietor of Chokshi Punjalal Somchand & Sons, engaged in jewellery business, faced an addition of ₹9,23,000/- u/s 69A on account of cash deposits found in an account with Abhyudaya Co-operative Bank Ltd. AO treated the account as belonging to the individual & taxed the deposits as unexplained money.
Assessee consistently maintained that the bank account in question actually belonged to his HUF, but the bank had wrongly linked his PAN since he was the Karta. It was submitted that both himself & his HUF were engaged in the jewellery trade & the deposits represented sales effected by HUF. To substantiate the claim, Assessee produced the HUF’s bank statement, bank book, cash book & also the income tax return of the HUF where the business income was duly reflected.
AO rejected the explanation & made the addition u/s 69A. CIT(A) upheld the addition, observing that Assessee failed to substantiate his claim with evidence.
On appeal, Tribunal found that both AO & CIT(A) had incorrectly recorded that Assessee had not furnished evidence. In fact, the HUF’s bank statement, books of account & return were all placed on record. Neither AO nor CIT(A) pointed out any defect in such evidences. Once it was established that the account belonged to the HUF & the transactions were taxed in the HUF’s hands, the addition in the hands of the individual could not be sustained.
