Subhash Sharma Vs ACIT (ITAT Kolkata)
In the case of Subhash Sharma vs. ACIT, the ITAT Kolkata addressed issues concerning unexplained income from a mother-son financial transaction. The appellant had initially declared an income of ₹3,61,860 for the relevant assessment year. However, following proceedings under Section 147 of the Income Tax Act, the Assessing Officer (AO) added ₹15,50,000 as unexplained income, citing transfers from the Oriental Bank of Commerce account of the appellant’s mother, Smt. Kalawati Devi. The appellant claimed the sum was repayment of a loan, a contention the AO and CIT(A) dismissed for lack of supporting evidence.
During the appeal before the ITAT, the appellant presented documentation, including an order under Section 263 of the Act against Smt. Kalawati Devi and subsequent assessment records. Despite these submissions, the ITAT noted inadequate compliance with notices and insufficient substantiation of the appellant’s claims. Consequently, the tribunal remanded the matter to the CIT(A) for fresh adjudication, emphasizing the need for a detailed examination of the transaction’s genuineness and the appellant’s compliance. This decision highlights the importance of substantiating financial claims with robust evidence in tax assessments.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
In this case, the return of income was filed on 30.03.2015 declaring total income of Rs. 3,61,860/-. The first-round assessment proceedings culminated with an order dated 29.12.2016 u/s 143(3) of the Act Income Tax Act, 1961 (in short the ‘Act’) assessing the income of Rs. 14,70,757/-. Thereafter proceedings u/s 147 of the Act was initiated by the Assessing Officer (hereinafter referred to as ld. ‘AO’) on the ground that an account number 11012150005800 maintained with Oriental Bank of Commerce was allegedly used by the appellant to transfer money to different entities. It was noticed that a sum of Rs. 15,50,000/- was shown as a receipt from this bank account by the assessee allegedly without a justifiable reason. It is seen from the ld. AO’s order that there were a number of notices issued for eliciting a response regarding this transaction (impugned transaction). However, it is recorded by the ld. AO that this assessee made only a part submission vide letter dated 09.03.2022. Through this communication, the assessee is seen to have filed an order u/s 263 of the Act in the name of Smt. Kalawati Devi (Mother of the assessee). In this order u/s 263 of the Act, the transactions in the Oriental Bank of Commerce account (supra) have been taken adverse note of and certain directions have been issued to the AO of Smt. Kalavati Devi. Thereafter, the ld. AO has recorded that the assessee did not provide any plausible reason to believe that the impugned funds were obtained in the course of normal lending of funds between mother and son. Needless to say, the addition of Rs. 15,50,000/- was made, leading to the filing of an appeal before the first appellate authority.
