Case Law Details
Harikrishna Singanamala Vs ITO (ITAT Bangalore)
The appeal related to Assessment Year 2017-18 and challenged the order of the Commissioner of Income Tax (Appeals) dated 22/09/2025. The assessee also filed a stay application.
The sole issue before the Tribunal was whether the Commissioner of Income Tax (Appeals) was justified in confirming the addition of Rs. 3,04,20,008 made by the Assessing Officer as unexplained money under Section 69A of the Income-tax Act, 1961.
During the assessment proceedings, the Assessing Officer found credits aggregating Rs. 3,04,20,008 in a bank account linked to the assessee. As the source of these credits was not explained to the satisfaction of the Assessing Officer, the amount was treated as unexplained money under Section 69A and added to the assessee’s total income.
Before the Commissioner of Income Tax (Appeals), the assessee contended that the bank account belonged to M/s Bellary Steel Alloys Ltd. and, therefore, no addition could be made in his individual hands. The Commissioner of Income Tax (Appeals) rejected the contention, observing that the assessee had not furnished sufficient supporting evidence to substantiate the claim.
Before the Tribunal, the assessee submitted that a confirmation letter had been produced before the Commissioner of Income Tax (Appeals) establishing that the impugned bank account belonged to the company. It was argued that this fact had also been noted by the Commissioner of Income Tax (Appeals), but the appeal was dismissed without fully appreciating its significance. The assessee therefore contended that, since the bank account did not belong to him, no addition could be made in his individual capacity. The Departmental Representative supported the orders of the lower authorities.
After considering the submissions and examining the material on record, the Tribunal found that the bank statement showed that the impugned bank account belonged to M/s Bellary Steel Alloys Ltd. It held that no adverse inference could be drawn against the assessee merely because the bank account was linked with his PAN. Since the bank account was not owned by the assessee, no addition under Section 69A was warranted in his hands.
The Tribunal further noted that the assessee had filed bank confirmation letters before the Commissioner of Income Tax (Appeals). It also referred to the Commissioner of Income Tax (Appeals)’ observation that the dispute was whether the deposits of Rs. 2,63,28,450 and the total credits of Rs. 3,04,20,008 belonged to the assessee or to M/s Bellary Steel Alloys Ltd., and that the assessee had claimed he was only an authorised signatory to the company’s current account while relying on bank confirmation letters dated 20.02.2025 and 29.03.2025.
Holding that the findings of the lower authorities lacked merit, the Tribunal deleted the addition made by the Revenue and allowed the assessee’s appeal.
As the quantum appeal was decided on merits, the stay application was held to have become academic and non-maintainable and was dismissed as infructuous. Accordingly, the appeal was allowed and the stay application dismissed as infructuous.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
The corresponding quantum appeal filed by the assessee pertains to Assessment Year (A.Y.) 2017-18 and is directed against the order passed by the learned Commissioner of Income Tax (Appeals) [hereinafter referred to as the ‘learned CIT(A)’] under section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), dated 22/09/2025. The assessee has also filed the present Stay Application.
2. The only issue raised by the assessee is that the learned Commissioner of Income Tax (Appeals) [CIT(A)] erred in confirming the addition made by the Assessing Officer (AO) of Rs. 3,04,20,008/- as unexplained money under section 69A of the Act.
2.1 During the assessment proceedings, the AO found that there were credits amounting to Rs. 3,04,20,008/- in the bank account linked to the assessee. As the source of these credits was not explained to the satisfaction of the AO, the AO treated the same as unexplained money under section 69A of the Act and added it to the total income of the assessee.
3. On appeal before the learned CIT(A), the assessee submitted that the impugned bank account belonged to the company, viz., M/s Bellary Steel Alloys Ltd., and therefore, no addition could be made in the hands of the assessee in his individual capacity. However, the learned CIT(A) disagreed with the contention of the assessee, observing that the assessee could not furnish sufficient supporting evidence to substantiate the claim.
4. Against the order of the learned CIT(A), the assessee is in appeal before us.
5. The learned AR submitted before us that a confirmation letter was furnished before the learned CIT(A) establishing that the impugned bank account was owned by the company. This fact was also noted by the learned CIT(A) in his order. However, the learned CIT(A) dismissed the appeal without fully appreciating the significance of the same. The learned AR accordingly prayed before us that since the impugned bank account did not belong to the assessee, no addition could be made in the hands of the individual assessee.
6. On the other hand, the learned DR vehemently supported the orders of the authorities below.
7. We have heard both the parties and perused the materials available on record. On a perusal of the bank statement placed before us, we note that the impugned bank account belongs to the company, M/s Bellary Steel Alloys Ltd. Accordingly, no adverse inference can be drawn against the assessee merely on the ground that such bank account was linked with the PAN of the assessee. In substance, since the bank account was not owned by the assessee, no addition is warranted in the hands of the individual assessee.
7.1 Moreover, the assessee filed the confirmation letter from the bank before the ld. CIT-A that the impugned bank account belongs to the assessee. The relevant observation of the ld. CIT-A reads as under:
5.8 The crux of the dispute is whether the deposits of Rs.2,63,28,450/- (and total credits of Rs.3,04,20,008/-) belong to the appellant or to M/s Bellary Steels and Alloys Ltd. The appellant has claimed that he was only an authorised signatory to the company’s current account, and that the deposits belong to the company. Reliance has also been placed on bank confirmation letters dated 20.02.2025 and 29.03.2025.
7.2 In view of the above, we do not find the merit in the finding of lower authorities. Hence, we delete the addition made by the Revenue. Thus, the ground of appeal raised by the assessee is hereby allowed.
8. Since we have decided the quantum appeal filed by the assessee on merits, the Stay Application filed by the assessee has become academic and non-maintainable, and therefore, the same stands dismissed as infructuous.
9. In the result, the appeal of the assessee is hereby allowed and the stay application filed by the assessee is dismissed as infructuous.
Order pronounced in court on 16th day of June, 2026
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