BHAGWAN LAL JHA,PATNA V. DCIT, CENTRAL CIRCLE-2, PATNA

ITA 496/PAT/2022

AI Insights

The case involves Bhagwan Lal Jha, the appellant, who contested the additions made by the Assessing Officer regarding undisclosed investments for the Assessment Year 2005-06. The primary contention was whether the source of funds for these investments was legitimate, specifically claiming they were from the HUF's agricultural income. The Department's stance was that the investments were unexplained. However, the Tribunal referenced a previous case (ITA No. 40/Pat/2011) which accepted the existence of the HUF and acknowledged its agricultural assets. The Tribunal concluded that the funds in question were indeed from the HUF's income, thus allowing the appeal and deleting the additions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470766 (ITAT-PATNA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Other Referred Cases: ITA No. 40/Pat/2011
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHWANI KR. SINGAL
• Keywords: Unexplained investment
• Section: 250

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA” BENCH, PATNA VIRTUAL HEARING AT KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No. 496/PAT/2022 Assessment Year: 2005-06 Bhagwan Lal Jha J.P. Lane, 3, Jagat Narain Road, East Lohanipur, Kadamkaun, Patna-800001. (PAN: ABSPJ1880C) Vs DCIT, Central Circle-2, Patna (Appellant) (Respondent) Present for: Appellant by : None Respondent by : Shri Ashwani Kr. Singal, JCIT Date of Hearing : 02.04.2025 Date of Pronouncement : 02.04.2025 O R D E R Per Bench : The captioned appeal by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeal), Patna-3 [hereinafter referred to as “the Ld. CIT(A)”] vide order no. ITBA/APL/S/250/2022-23/1045027357(1) dated 30.08.2022 passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2005-06. 2. None represented on behalf of the assessee and Shri Ashwani Kr. Singal, JCIT appeared on behalf of the revenue. 3. It was submitted by the Ld. DR that the additions are in respect of undisclosed investment made by the assessee. It was the submission that 2 ITA No.496/Pat/2022 Bhagwan Lal Jha, AY 2005-06 the assessee has claimed the source of the fund for the investment to be out of HUF fund. It was the submission that the assessee has filed his return of income for the first time in Assessment Year 2011-12 only. It was the submission that the best case scenario in the case would be to confirm the addition of Rs.24,79,237/- representing the unexplained deposit in the bank account no. 1143 with Reserve Bank Employee’s Co-operative and Thrift and Credit Society Ltd. which is alleged to belong to the HUF but nothing has been shown that the said account belonged to the HUF. It was the submission that the unexplained investment could be treated as being sourced from this fund and consequently, the benefit of telescoping may be granted to the assessee. 4. We have heard the rival contentions and have perused the material available in the paper book. A perusal of the order of the Tribunal in the assessee’s case in ITA No. 40/Pat/2011 dated 03.07.2014 clearly shows that the existence of the HUF has been accepted. The assessee has never claimed that the bank account no. 1143 belonged to the HUF. His claim is that the funds deposited in the said bank account were out of the HUF’s income. The fact that the HUF’s existence is no more disputed and it is also seen that the HUF has substantial agricultural land as has been evidenced in the paper book filed, we are of the view that the amount of Rs.24,79,237/- would have to be treated as the funds of the HUF. The assessee has also been claiming that the sources of the investment are out of the funds of the HUF. As it is noticed that the deposit of Rs.24,79,237/- on various dates in the bank account no. 1143 is substantially out of the agricultural income of the HUF, these funds are available for making this investment which has treated as undisclosed investment. This being so, the additions as made by the Assessing Officer and as confirmed by the Ld. CIT(A) stands deleted as the sums are explained. 3 ITA No.496/Pat/2022 Bhagwan Lal Jha, AY 2005-06 5. In the result, the appeal of the assessee is allowed. Order dictated and pronounced in the open court. Sd/- Sd/- (Rakesh Mishra) (George Mathan) Accountant Member Judicial Member Dated: 2nd April, 2025 JD, Sr. P.S. Copy to: 1. The Appellant: Bhagwan Lal Jha 2. Respondent – DCIT, Central Circle-2, Patna 3. CIT(E), Patna-3. 4. Pr. CIT 5. DR, ITAT, Patna 6. Guard file. True Copy By Order Assistant Registrar ITAT, Patna "