Vulli Radhakrishna Vs ITO (ITAT Visakhapatnam)
Faceless Reassessment Upheld, But Multiple Additions Sent Back- Cash Deposits, Credit Cards & Share Transactions—ITAT Flags Double Additions, Remands Issues to AO
The Visakhapatnam Bench of the ITAT, in Vulli Radhakrishna vs ITO (ITA No. 359/Viz/2025, AY 2015-16), upheld the jurisdictional validity of reassessment framed u/s 147 r/w 144 r/w 144B by the Faceless Assessing Officer, but set aside multiple additions on merits and restored the matter to the AO for fresh adjudication. The Assessee challenged the reassessment on the ground that prior to the introduction of section 151A and the “e-Assessment of Income Escaping Assessment Scheme, 2022” (w.e.f. 29.03.2022), reassessment could be framed only by the Jurisdictional AO. The Tribunal rejected this plea, holding that pre-amended section 144B itself contemplated faceless assessments, and therefore the reassessment order dated 26.03.2022 suffered from no jurisdictional infirmity.
On merits, the ITAT found force in the Assessee’s contention that cash withdrawals from the same bank account could partly explain subsequent cash deposits and that outright rejection of such explanation was unjustified; the issue was remanded for re-examination, including application of peak theory where appropriate. The Tribunal further held that credit card bill payments sourced from the same bank account cannot be separately added, as it would result in double taxation, subject to verification. Similar directions were issued in respect of purchase of equity shares, taxation of entire sale proceeds as STCG without allowing cost, and additions of alleged receipts from HDB Financial Services Ltd and Axis Securities Ltd without furnishing details.
Holding that the AO had made additions without adequate verification and without sharing complete particulars with the Assessee, the ITAT set aside the impugned additions in entirety and directed the AO to re-adjudicate all issues afresh after granting due opportunity of hearing. The appeal was accordingly allowed for statistical purposes
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
