No addition can be made on Unexplained Credit Amount  in the Bank Account of Assessee: ITAT [Read Order]

The Delhi bench of Income Tax Appellate Tribunal (ITAT) recently held that no addition can be made on unexplained credit amount appearing in the bank account of assessee.

Assessee-Ajay Kumar Aggarwal filed the appeal before this tribunal challenging additions made by the AO on account of unexplained credit amounting to Rs. 4,78,01,414/- .

Assessee submitted that all beneficiaries was available in the seized documents no payment by cheque has been made by the assessee without receiving consideration in cash.

 P. Praveen Sidharth, counsel for the revenue submitted that the assessee has not been able to give the details of such credits appearing in his bank account therefore the same was rightly treated as income of the assessee as unexplained credit.

It was observed by the tribunal that the Assessing Officer had made an addition in the hands of assessee by treating the credit entries in the books of assessee but at the same time the AO ignored debit entries made by the assessee in his books of accounts.

Further, the bench determined that entire amount of credit entries cannot be added to the taxable income of the assessee ignoring the debit side entries and as when the assessee is receiving cash and issuing cheques then said cheque of almost same amount then the assessee could not be held beneficiary of entire amount or entire amount of credit entries treating the same as unexplained.

Thereafter, the two-member benche of Chandra Mohan Garg (Judicial Member) and B.R.R. Kumar (Accountant Member) allowed the appeal and held that addition made by the AO on account of unexplained credits could not be  sustained.

To Read the full text of the Order CLICK HERE

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