The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently held that income tax addition could not be made due to misreporting by insurance companies.
Assessee Kamal Binani filed the return on 20.11.2012 declaring total income of ₹.1,60,630/- .Thereafter his case was reopened as per section 147 of the Income Tax Act 1961. While verifying the records the assessing office observed that there is no bank entries of Rupees 6,00,000/- paid in two instalments by the assessee from HDFC bank. Thereafter he proceeded to make the addition under section 68 of the Income Tax Act 1961.
Aggrieved assessee approached CIT(A) raising the issue but the order of CIT(A) against him further assesee filed second appeal before the ITAT.
Bhupendra Shah, counsel for the assessee submitted that, “assessee has not maintained any bank account in Bank of India, Andheri Branch and assessee has submitted all other information along with the bank statements in which assessee has maintained bank account were submitted before tax authorities, the issue raised may be because of misreporting by the insurance company”.
Saurabh Kumar Rai, counsel for the revenue supported the decision of the lower authorities.
The division bench of the ITAT comprising Kuldip Singh, E (Judicial Member) and S. Rifaur Rahman, (Accountant Member) allowed the appeal of assessee and observed that “as far as subscription of insurance is concerned assessee has accepted and brought on record that assessee has in fact made the payment and not through the bank reported by the Insurance Company and it is from the branch in which assessee is maintaining bank account.”
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