Cash Deposits in Bank Account Linked to Wrong PAN: ITAT Remands Matter to AO for Verification [Read Order]
The Bench directed the AO to verify whether the company had disclosed the account in its balance sheet and had sufficient cash to make the deposits, clarifying that if these were confirmed, the transactions would belong to the company and no addition should be made in the hands of the assessee
Bank Account
Bank Account
The Ranchi Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Assessing Officer (AO ) for verification after noting that cash deposits were made in a company’s bank account that was wrongly linked to the assessee’s Permanent Account Number ( PAN ).
Avikal Maskara, appellant-assessee,through the counsel, stated that during the relevant assessment year, he was a partner in Mahabir Marketing Solutions and a Director in M/s Eon Sales Enterprises Private Limited.
The counsel explained that cash amounting to Rs. 23,51,700 had been deposited in the Bank of Baroda account (No. 17020000718) of M/s Eon Sales Enterprises Private Limited, but the account was linked to the assessee's PAN. As a result, the AO treated the cash deposits as unexplained income in the hands of the assessee.
The counsel clarified that the deposits actually pertained to the company and expressed no objection to the matter being remanded to the AO for verification of the ownership of the bank account.
The departmental counsel however, argued that no evidence was furnished to show that the assessee’s PAN had been wrongly linked to the said bank account.
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The two member bench comprising George Mathan (Judicial Member) and Ratnesh Nandan Sahay (Accountant Member) noted that the AO had himself accepted that the Bank of Baroda account belonged to M/s Eon Sales Enterprises Private Limited but was linked to the assessee’s PAN. The assessee claimed to have informed the bank that the PAN was wrongly attached to the company’s account.
As these facts had not been verified earlier, the appellate tribunal held that the matter needed fresh examination. It directed the AO to check whether the company had disclosed the account in its balance sheet and whether it had sufficient cash to make the deposits.
The tribunal stated that if these conditions were met, the transactions would belong to the company and no addition should be made in the hands of the appellant.
Accordingly, the matter was sent back to the AO for re-adjudication after giving the assessee a proper opportunity to be heard. Therefore the appeal was allowed partly for statistical purposes.
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