Addition of Rs. 4.66 Crore u/s 69A in Individual PAN: ITAT upholds Deletion noting Disclosure in HUF Return [Read Order]
The tribunal observed that the individual PAN was inadvertently used for opening business accounts, while all income belonged to the HUF.
ITAT - upholds - HUF - taxscan
ITAT - upholds - HUF - taxscan
The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the revenue’s appeal and upheld the deletion of Rs. 4.66 crore added under Section 69A of Income Tax Act,1961 by the Commissioner of Income Tax(Appeals) [CIT(A)] in the assessee’s individual Permanent Account Number (PAN), noting that all income and bank accounts were properly disclosed in the HUF return.
The Revenue-appellant appealed against the CIT(A) order dated 23.01.2025. In this case, A. Kulanthaivel, respondent-assessee, appealed against the AY 2018-19 assessment order, where the AO added Rs.4.66 crore under Section 69A, alleging undisclosed cash deposits in a Corporation Bank account.
The assessment was framed in the individual status, but the return was filed in HUF status, where the account and deposits were disclosed. The CIT(A) noted that the individual PAN was used for bank KYC, while all business income belonged to the HUF.
Considering the HUF return and financial statements, the CIT(A) held that the addition was not justified and deleted it, allowing the appeal.
The departmental counsel argued that the assessee did not provide evidence to show that the cash deposits in the individual bank account were disclosed in the HUF return. The assessee’s counsel supported the CIT(A)’s findings and repeated the earlier arguments.
The two member bench comprising Manu Kumar Giri (Judicial Member) and S.R.Raghunatha (Accountant Member) reviewed the submissions, records, and lower authorities’ orders and noted that the assessee had mistakenly used his individual PAN instead of the HUF PAN for opening bank accounts for the business. It observed that the assessee had no individual income and all business income belonged to the HUF.
The HUF ITR disclosed all bank accounts, secured loans, and creditors. The tribunal also found no breach of Rule 46A of the Income Tax Rules, 1962, and upheld the CIT(A)’s order, dismissing the revenue’s appeal.
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