Sponsored
    Follow Us:

Case Law Details

Case Name : Ganesan Nakkeeran Vs ITO (ITAT Chennai)
Appeal Number : ITA No.2089/Chny/2024
Date of Judgement/Order : 06/11/2024
Related Assessment Year : 2010-11
Become a Premium member to Download. If you are already a Premium member, Login here to access.
Sponsored

Ganesan Nakkeeran Vs ITO (ITAT Chennai)

In Ganesan Nakkeeran Vs ITO (ITAT Chennai), the case concerned the addition of ₹51.20 lakh as unexplained cash credit under Section 68 of the Income Tax Act for AY 2010-11. The case was reopened after information surfaced about significant cash deposits in the assessee’s HDFC bank account, exceeding ₹10 lakh, and share transactions linked to the account. The assessee claimed the deposits were used for purchasing shares on behalf of his non-resident brother-in-law, Mr. Maruthuvanan Senthil Nathan, based on a power of attorney. However, investigations revealed discrepancies, including that the referenced bank account did not belong to Mr. Senthil Nathan. Without corroborative evidence, the Assessing Officer (AO) treated the deposits as unexplained and added them to the assessee’s taxable income, which the CIT(A) later upheld.

Upon appeal, the ITAT noted that the assessee had failed to substantiate the claims before lower authorities but allowed another opportunity in the interest of natural justice. The tribunal set aside the CIT(A)’s order and remanded the case for reassessment, directing the assessee to provide necessary evidence. The decision emphasizes the importance of procedural fairness while balancing the responsibility of taxpayers to substantiate their claims with proper documentation.

FULL TEXT OF THE ORDER OF ITAT CHENNAI

Aforesaid appeal by assessee for Assessment Year (AY) 2010-11 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 17-06-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.144 r.w.s 147 of the Act on 29-12-2018. The sole grievance of the assessee is against confirmation of addition of Rs.51.20 Lacs as unexplained cash credit u/s.68 of the Act. The Ld. AR has prayed for another opportunity of hearing before lower authorities which has been opposed by Ld. Sr. DR. It could be seen that the assessment has been framed on best judgment basis u/s 144.

2. The case was reopened pursuant to information that the assessee deposited cash of more than Rs.10 Lacs in his bank account and also dealt with in share transactions. The assessee remained a non-filer. There was deposit of Rs.51.20 Lacs in HDFC Bank. It was stated that the account was used to buy shares for his brother-in-law Mr. Maruthuvanan Senthil Nathan (Non-resident Indian). It was also stated that cash was withdrawn from the account of Shri Senthil Nathan held with SBI, Guindy branch and the assessee had power to operate the said account in order to make investment as per the directions of Shri Senthil Nathan. The cash deposited in assessee’s bank account was stated to be utilized by him towards purchase of shares using assessee’s de-mat account. To support the same, the assessee furnished a letter from Shri Senthil Nathan. However, upon verification, it was found that the said bank account did not belong to Shri Senthil Nathan. Finally, rejecting the explanation of the assessee, the bank deposit of Rs.51.20 Lacs was added to the income of the assessee. In the absence of any further supporting documents as forthcoming from the assessee, Ld. CIT(A) confirmed the addition against which the assessee is in further appeal before us.

3. The Ld. AR has reiterated the above factual position and submitted that given another opportunity, the assessee could substantiate its case. The same has been opposed by Ld. Sr. DR who referred to the findings of Ld. AO in the assessment order.

4. Undisputedly, the assessee has failed to substantiate its stand before lower authorities. However, accepting the plea of Ld. AR and keeping in mind the principle of natural justice, we deem it fit to grant another opportunity to the assessee to substantiate its case before lower authorities. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. CIT(A) for de novo adjudication with a direction to the assessee to substantiate its case.

5. The appeal stand allowed for statistical purposes.

Order pronounced on 06th November, 2024.

Sponsored

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Sponsored
Sponsored
Ads Free tax News and Updates
Sponsored
Search Post by Date
December 2024
M T W T F S S
 1
2345678
9101112131415
16171819202122
23242526272829
3031