Kailash Brick Traders Vs ITO (ITAT Chandigarh)
The ITAT Chandigarh considered an appeal filed by Kailash Brick Traders against the order of the CIT(A) under section 250 of the Income Tax Act, 1961, concerning AY 2017-18. The assessment order dated 19/12/2019 had computed the assessee’s taxable income at Rs.38,85,500/- under section 144. This comprised Rs.3,00,000/- as undisclosed business income under section 69, Rs.24,00,000/- as unexplained cash credits under section 69, and Rs.11,85,500/- as unexplained cash credits under section 68. The assessee challenged the additions and also contended that the proceedings had been initiated under a non-operational PAN, despite the assessee having another operational PAN.
The assessee was a partnership firm engaged in brick kiln business at Village Togan, District Ropar, Punjab, with Raj Kumar Dua and Promila Dua as partners. The assessee stated that it had been carrying on the business since 01/04/1992 and stopped operations around March 2017. It claimed that two PANs had inadvertently been allotted to the firm: AADFK9113H, stated to be the operational PAN, and AAEFK9376R, stated to be the non-operational PAN. The proceedings leading to the assessment under section 144 were initiated under the non-operational PAN.
The assessee had filed its first appeal before the CIT(A). During those proceedings, it produced a return of income for AY 2017-18 filed on 13/07/2017 under PAN AADFK9113H. The CIT(A) accepted that both PANs belonged to the assessee and, based on the return, reduced the business income addition from Rs.3,00,000/- to Rs.2,05,320/-, granting relief of Rs.94,680/-. However, the CIT(A) sustained the additions relating to cash deposits of Rs.24,00,000/- before demonetisation and Rs.11,85,000/- after demonetisation in the Punjab National Bank account. The CIT(A) held that the assessee had not explained the nature and source of these deposits and that the amounts remained unexplained irrespective of the PAN under which the proceedings were conducted.
