ITAT Bangalore Deletes Section 68 Addition for Duplicate ITR Disclosure

Arjun Shetty Vs ITO (ITAT Bangalore)

Mere Double Reporting in ITR Is Not an Unexplained Cash Credit: ITAT Deletes ₹81 Lakh Addition Under Section 68

Summary: The Bangalore Bench of the Income Tax Appellate Tribunal has held that an amount inadvertently reported twice in the exempt-income schedule of the income-tax return cannot be treated as an unexplained cash credit under Section 68 when there is no corresponding double credit in the assessee’s audited books or capital account. Finding that the assessee had neither received the amount twice nor created any bogus capital, the Tribunal deleted the addition of ₹81,07,685, which had also been subjected to the special tax rate under Section 115BBE.

Facts of the case

The assessee was a practising neurosurgeon in Mangaluru. Apart from his professional income, he was a partner with a 25% share in two firms:

• M/s Classic Plantations; and
• M/s Classic Advertising.

M/s Classic Plantations was engaged in cultivation and sale of coffee, arecanut, pepper and other agricultural produce over approximately 501 acres of land. For Assessment Year 2018-19, the firm declared agricultural income of ₹3,24,30,738, which was accepted in its assessment under Section 143(3).

The assessee’s 25% share in the firm’s profit amounted to ₹81,07,685. He also received ₹1,33,369 as his share of profit from M/s Classic Advertising. Thus, his total exempt share of profit from the two partnership firms was ₹82,41,054.