K. Loganathan Vs ITO (ITAT Chennai)
The assessee, a real estate mediator, acted as a power agent and sold property on behalf of his principal, depositing sale proceeds of ₹22.05 lakh in his bank account. The AO treated a major portion of these deposits as unexplained cash and made additions along with interest income and capital introduction.
During appellate proceedings, evidence including affidavit from the principal confirmed that the assessee was merely holding funds in a fiduciary capacity. The remand report also accepted that part of the deposits and interest belonged to the principal.
The Tribunal held that since the assessee acted only as an agent, the entire cash deposit cannot be taxed in his hands. However, considering inconsistencies and partial ownership aspects, the ITAT sustained only 50% of the addition (₹7.99 lakh) and deleted the balance.
On interest income, the Tribunal accepted that ₹69,247 belonged to the principal and directed deletion, while confirming ₹55,551 as taxable in the hands of the assessee.
Accordingly, the appeal was partly allowed, granting substantial relief to the assessee.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
The present appeal is filed by the assessee against the order dated 20.02.2012 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “ld.CIT(A)”), dismissing the appeal filed by the assessee against the assessment order dated 31.12.2009 passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), pertaining to Assessment Year (A.Y.) 2007-08.
