AO fails to Show Conclusive Proof of Assessee being Benamidar of Registered Society: ITAT deletes Addition [Read Order]

The Raipur bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition on grounds of Assessing Officer (AO) failed to show conclusive proof that the assessee being a benamidar of registered society.

The appeal was presented by the revenue against the order passed by the Commissioner of Income Tax (Appeals)[CIT(A)].

Original assessment was framed by the A.O in the case of the assessee vide order passed under Section144 of the Income Tax Act, 1961 dated 20.12.2017, determining his total income at Rs.1,76,68,313/-.

On appeal, the ITAT set aside the order of the CIT(Appeals) and restored the matter to the file of the A.O for fresh consideration after affording a reasonable opportunity to the assessee.

The A.O pursuant to the aforesaid direction of the Tribunal framed assessment vide his order passed dated 24.12.2010 assessing the total income of the assessee at Rs.1,71,30,153/-.

On appeal, the CIT(Appeals) vacated the aforesaid additions and partly allowed the appeal of the assessee.  The revenue being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the tribunal.

Upon thorough examination, the tribunal concurred with the CIT (Appeals) findings, stating that the assessee had adequately explained the source of the bank deposits. As a result, the Assessing Officer's decision to consider them as unexplained deposits in the assessee's possession was deemed unjustified.

Also, the tribunal concured with the view taken by the CIT(Appeals) that now when the account of the borrower and lender duly substantiated the claim of the assessee that interest accrued on his bank deposits were transmitted to CMS, therefore, no addition of the same could have been made in his hands.

The two-member bench, with Ravish Sood (Judicial member) and Arun Khodpia (Accountant member) found no flaws in the perspective adopted by the CIT(Appeals). Consequently, they upheld the observations that led to the removal of the additions made by the Assessing Officer under Section 69 of the Income Tax Act, amounting to unexplained bank deposits of Rs. 1,24,30,799/- and the interest accrued on those deposits, which amounted to Rs. 1,78,210/-.

Thus, the appeal raised by the revenue was dismissed.

To Read the full text of the Order CLICK HERE

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