Mala Vs ITO (ITAT Bangalore)
The Income Tax Appellate Tribunal (ITAT), Bangalore, considered an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2017-18, which had confirmed an addition of ₹27,97,670 under Section 69A of the Income-tax Act, 1961 as unexplained money.
The assessee, an individual deriving income from house property and other sources, had filed a return declaring a total income of ₹5,71,900. The case was selected for limited scrutiny to verify cash deposits made during the demonetisation period. The Assessing Officer noticed cash deposits of ₹27,97,670 in the assessee’s Axis Bank account and treated the amount as unexplained money under Section 69A. The CIT(A), in an ex parte order passed in the absence of the assessee, confirmed the addition.
Before the Tribunal, the assessee explained that her mother, Smt. Shashikala, had purchased a liquor shop licence from Mr. C. Srinivas during the relevant assessment year and had taken over the business. Although the formal transfer of the licence was delayed due to procedural formalities, the business was effectively managed by the assessee’s mother.
The assessee submitted that she merely assisted her mother in operating the business and facilitating online banking transactions. According to the submissions, the sale proceeds of the liquor business were deposited into the assessee’s bank account and were subsequently transferred to the Karnataka State Beverages Corporation Limited (KSBCL) for purchasing liquor stock. It was further submitted that the assessee neither derived any income nor received any remuneration from the business. The business income had already been offered to tax by Mr. C. Srinivas for Assessment Year 2017-18 and thereafter by the assessee’s mother for Assessment Year 2018-19 following the formal transfer of the licence.
