Prakash Ramjibhai Nanda Vs ITO (ITAT Surat)
Surat ITAT Restores ₹3.24-Crore Bank-Credit Addition: AO Must Verify Duplicate PAN, Surrender Application and Whether Deposits Were Already Disclosed as Turnover
The Surat ITAT restored the ₹3.24-crore addition representing total bank credits for fresh verification. The assessee explained that he had inadvertently obtained two PANs and had already filed his return and disclosed the relevant income under PAN AARPN1955G. The reassessment and addition were, however, made under the second PAN, ABYPN3360K, which the assessee claimed to have applied for surrender.
The Tribunal observed that neither the AO nor the CIT(A) had properly verified the HDFC Bank transactions, the alleged application for surrender of the duplicate PAN, or whether the disputed credits had already been recorded as business turnover under the operative PAN. These factual issues were essential to determine whether the addition amounted to taxing transactions already disclosed by the assessee.
Accordingly, the matter was remanded to the AO to verify the use of both PANs, the surrender application, the bank transactions and the correctness of the addition. The AO was also permitted to consider appropriate action for obtaining or operating two PANs, after providing the assessee a proper opportunity of hearing in accordance with the principles of natural justice. The appeal was partly allowed for statistical purposes.
