RUDRESH DANDI HANUMANTHAPPA,MALEBENNUR V. INCOME TAX OFFICER, WARD-1, DAVANAGERE

ITA 2121/BANG/2024

AI Insights

The case involves Rudresh Dandi Hanumanthappa, the appellant, who was accused of unexplained cash deposits amounting to \\u20b959,69,835 in his bank account, which were collected from ticket sales at Sangam Talkies. The Income Tax Officer (ITO) added this amount under section 69A of the Income-tax Act, 1961, treating it as unexplained money. The appellant argued that these collections were accounted for and taxed under the name of Shri M.N. Kumar, on whose behalf he collected the money. The Commissioner of Income Tax (Appeals) upheld the AO's decision, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal found merit in the appellant's request for a fresh examination of the evidence and remanded the case back to the AO.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360723 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRAMANIAN
• Assessee Lawyers: BS BALCHANDRAN
• Keywords: Set aside; Additional evidence

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No. 2121/Bang/2024 Assessment Year: 2017-18 Rudresh Dandi Hanumanthappa, #1, Basaveshwara Badavane, Malebennur TQ; Harihar, Malebennur – 577 530. PAN – ANXPD 5045 J Vs. The Income Tax Officer, Ward - 1, Davanagere. . APPELLANT RESPONDENT Assessee by : Shri BS Balchandran, Advocate Revenue by : Shri .Subramanian, JCIT (DR) Date of hearing : 14.05.2025 Date of Pronouncement : 23.05.2025 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order passed by the NFAC, Delhi dated 11/09/2024 in DIN No. ITBA/NFAC/S/250/ 2024-25/1068582172(1) for the assessment year 2017-18. 2. This appeal by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) [CIT(A)], confirming the addition of ₹59,69,835 made by the Assessing Officer (AO) under section 69A of the Income-tax Act, 1961, on account of unexplained money. ITA No.2121/Bang/2024 Page 2 of 4 . 3. Briefly stated facts are that the assessee is an individual who was engaged in collecting cash from the sale of tickets at Sangam Talkies, allegedly on behalf of Shri M.N. Kumar. The assessee deposited these collections in his bank account and subsequently transferred the same, after deducting his commission, to Shri M.N. Kumar or other distributors on behalf of Shri M.N. Kumar. It was submitted that the cash deposits represent such ticket sale collections, which were ultimately accounted for and offered to tax by Shri M.N. Kumar. 4. However, the AO made the addition under section 69A of the Act, treating the cash deposits as unexplained, on the grounds that the assessee failed to furnish the requisite details such as: • The source of each cash deposit entry in the bank; • Proof of authorization to collect cash on behalf of the theatre; • Correlation between the cash deposits and subsequent remittances; • Daily ticket sale collections. 5. On appeal, the ld. CIT(A) upheld the AO’s action, noting that while the assessee produced a confirmation from Shri M.N. Kumar and a copy of his own bank statement, he failed to establish the genuineness of the ticket sales or provide evidence from Shri M.N. Kumar’s bank account corroborating the remittances. 6. Being aggrieved by the order of learned CIT-A, the assessee is in appeal before us. ITA No.2121/Bang/2024 Page 3 of 4 . 7. Before us, the learned AR submitted that the cash collected was duly reflected in the books of Shri M.N. Kumar and offered to tax. A paper book was filed containing, inter alia, ITR acknowledgments, financial statements of Shri M.N. Kumar, and ledger accounts reflecting the alleged collections. The learned AR pleaded that the matter may be restored to the file of the AO for a fresh examination, with liberty to furnish additional evidence. 8. On the other hand, the learned DR did not object to the matter being remanded to the AO for fresh adjudication as per law. 9. We have carefully considered the rival contentions and materials available on record. Considering the nature of the claim and the documentary evidence now proposed to be submitted by the assessee, we are of the considered view that the ends of justice would be met if the matter is restored to the AO for fresh adjudication. Accordingly, we set aside the impugned order of the ld. CIT(A) and restore the issue to the file of the AO with the following directions: • The AO shall verify and reconcile the source of cash deposits in the assessee’s bank account with reference to the ticket sale collections and subsequent fund transfers. • The assessee shall provide documentary evidence establishing the authorization to collect cash and corroborating the flow of funds, including relevant confirmation from Shri M.N. Kumar. • The AO shall allow the assessee reasonable opportunity to furnish necessary explanations and documents. ITA No.2121/Bang/2024 Page 4 of 4 . • The AO may also verify whether the said amounts have been duly accounted for and taxed in the hands of Shri M.N. Kumar to avoid any double addition. • The assessee is directed to fully cooperate with the AO during the course of the fresh proceedings. 9.1 In view of the above detailed discussion, we set aside the finding of the learned CIT-A and restore the issue to the file of the AO for fresh adjudication in the light of the above stated discussion and as per the provisions of law. Hence the ground of appeal of the assessee is hereby allowed for statistical purposes. 10. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in court on 23rd day of May, 2025 Sd/- Sd/- (KESHAV DUBEY) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 23rd May, 2025 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore "