SMITA SUBHASH MEHTA,RATNAGIRI V. INCOME-TAX OFFICER, WARD 1, RATNAGIRI

ITA 1108/PUN/2025

AI Insights

The case involves Smita Subhash Mehta, who appealed against the order of the CIT(A)/NFAC confirming an addition of Rs.1,50,79,576 under section 69A of the Income Tax Act. The addition was based on deposits in a joint bank account held with her husband, which the Assessing Officer deemed unexplained money. The appellant argued that the transactions were related to her husband's business and were recorded in his audited financial statements. The Tribunal found merit in the appellant's arguments and remanded the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714209 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH SRIVASTVA
• Assessee Lawyers: ANUP BIPIN SHAHA
• Keywords: Set aside; Opportunity of being heard
• Section: 147; 148; 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1108/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year : 2018-19 Smita Subhash Mehta, Pitruchaya, Teen Batti Naka, Khed, Ratnagiri- 415709. PAN : ANKPM7084P Vs. ITO, Ward-1, Ratnagiri. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 28.03.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2018-19. 2. The appellant has raised the following grounds of appeal :- “1. On the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in confirming and the Ld. AO erred in making the addition of Rs.1,50,79,576/- under section 69A of the Act and the same is based on surmise and guesswork. The addition be deleted and the appellant be given just and due relief. 2. On the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in confirming and the Ld. AO erred in making the addition of Rs.1,50,79,576/- under section 69A of the Act without considering the appellant's response that the deposits in the impugned account are already accounted for in her Assessee by : Shri Anup Bipin Shaha Revenue by : Shri Akhilesh Srivastva Date of hearing : 28.07.2025 Date of pronouncement : 05.08.2025 Printed from counselvise.com ITA No.1108/PUN/2025 2 husband's books of accounts which are audited. The addition be deleted and the appellant be given just and due relief. 3. The appellant craves to add, amend, alter or leave any of the above grounds of appeal.” 3. Facts of the case, in brief, are that the assessee is an individual and has not furnished her original return of income. On the basis of information available with the Department that the assessee has deposited Rs 1,50,79,576/- (Rs.1,31,48,016/- & other deposit of Rs 19,31,560/-) in her bank account number 0535651000001007 maintained with IDBI Bank, the case of the assessee was reopened u/s 147 of the IT Act and after following due procedure as per section 148A, notice u/s 148 was issued to the assessee. The statutory notices u/s 142(1) of the IT Act were also issued to the assessee, the assessee complied to the above notices and furnished his written submission along with supporting documents that is IDBI Bank statement, ITR copy and financial statements i.e. audited Balance Sheet etc of her husband stating that the IDBI Bank account is jointly held by her with her husband Mr. Subhash Keshav Mehta (PAN ACTPM6758L) and the transactions were made by her husband which are related with his business and the above transactions were duly recorded in his books of accounts and the impugned bank accounts also find place in audited financial statements of the concerned period. Being Printed from counselvise.com ITA No.1108/PUN/2025 3 dissatisfied with the reply of the assessee, the Assessing Officer completed the assessment and made addition u/s 69A of the IT Act of Rs.1,50,79,576/- and determined the taxable income of Rs.1,50,79,576/- as against no income returned by the assesse. 4. Against the above assessment order, the assessee preferred an appeal before the first appellate authority. Since Ld. CIT(A)/NFAC was not satisfied with the reply furnished by the assessee the appeal filed by the assessee was dismissed by him by observing as under :- “I have carefully examined the ground raised by the appellant. In this regard, the appellant contends that the said all the Bank Accounts were jointly held by both the appellant and her husband Shri Subhash Keshav Mehta and all the transactions were conducted by him ie. the bank accounts were operated by the appellant's husband only. The appellant further states that all the transactions in the bank accounts held jointly by both the appellant and her husband were operated by him. The appellant further contends that she had furnished/uploaded all the details/copies regarding her husband's PAN, Income Tax Return, Audit Report and the acknowledgement etc. for verification. The appellant alleges that the AO failed to consider any of the details submitted/uploaded by her with regard to her husband's Income Tax Returns, PAN and other details for the Asst. Year 2018-19. From the reply of the assessee-appellant for the queries raised by the AO, it is seen that the appellant had uploaded only copies of Financial Statements and IDBI Bank Account Statement which included Sundry Creditors Account, Balance Sheet as on 31.03.2018, extract of Capital Account, Schedule of Fixed Assets, Trading & Profit & Loss Account for the year ended 31.03.2018, regarding Shri Subhash Keshav Mehta. The appellant has not furnished any detailed point by point reply or substantiation for the grounds raised by her in Form 35. As the AO failed to consider her reply and passed the order, the appellant is in appeal. From the Assessment Order, Para 3.1 Page 6, the AO contends that (relevant portion of which is reproduced below for clarity): “3.1 It is noted that during the year under consideration, the assessee deposited cash of Rs. 1,31,48,016/- and other than cash of Rs. Printed from counselvise.com ITA No.1108/PUN/2025 4 19,31,560/- in her bank account (0535651000001007) totalling to Rs. 1,50,79,576/- maintained with IDBI bank. Since the assessee could not satisfactorily prove the source of the said cash deposits with necessary documentary evidence despite sufficient opportunity of being heard, in order to protect the interest of revenue, the same (amount of Rs. 1,50,79,576/- including cash deposit of Rs. 1,31,48,016) is therefore treated as unexplained money u/s 69A of the Act. Provision of section 69A of the Act is reproduced as under which is applicable in the case of the assessee: Unexplained money u/s 69A \"69A. Where in any financial year the assessee is found to be the owner of any money. bullion, jewellery or other valuable article and such money, bullion, jewellery TAX DEPARTMEN or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Income-tax Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.\". [Addition: Rs. 1,50,79,576/-]\" The AO has brought out a clear picture of the bank account(s) jointly held by the appellant and her husband, and other details submitted/uploaded. After due verification of the details furnished of both the appellant and her husband, the AO came to the conclusion that the amount of Rs.1,31,48,016/- and other deposits amounting to Rs. 19,31,560/- totalling to Rs.1,50,79,576/- is the unexplained money u/s 69A, of the assessee-appellant and assessed as such. In view of the above discussion and the judicial pronouncements referred below, it is contended that the AO has made a elaborate and detailed order considering all aspects. Therefore, I have no reason to interfere with the findings/observations of the AO. As such, the ground raised by the appellant is dismissed.” 5. It is the above order against which the assessee is in appeal before this Tribunal. 6. Ld. AR appearing from side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR submitted before the bench that during the course of assessment Printed from counselvise.com ITA No.1108/PUN/2025 5 proceedings as well as during first appellate proceedings it was made clear that the impugned IDBI bank account number 0535651000001007 is operated by her husband Mr. Subash Keshav Mehta (PAN ACTPM6758L) who is proprietor of M/s Keshav Giridhar Mehta & the transactions entered into this bank account is related to the business of her husband. It was also explained that the impugned IDBI bank account number 0535651000001007 is jointly held by assessee and her husband and copy of above IDBI LTD Bank account no.0535651000001007 & copy of income tax return in full for assessment year 2018-19 and the copy of audited balance sheet of her husband Mr. Subash Keshav Mehta (PAN ACTPM6758L) who is proprietor of M/s Keshav Giridhar Mehta was produced and it was contended that the impugned bank account is operated by her husband for his business transactions & assessee is not involved in any business. Ld. AR further submitted that with the help of copy of income tax return it was demonstrated before the AO as well as before Ld. CIT(A)/NFAC that the impugned IDBI Bank account was duly reported in the income tax return along with other bank accounts and it was also demonstrated that the impugned IDBI Bank account also find place in the audited balance sheet. However the Assessing Officer as well as Ld. CIT(A)/NFAC did not accept her Printed from counselvise.com ITA No.1108/PUN/2025 6 contentions and accordingly the appeal filed by him was dismissed. Ld. AR again submitted all the above documents before the bench in the paper book and requested to delete the addition of Rs.1,50,79,576/- made by the AO and confirmed by Ld. CIT(A)/NFAC. 7. Ld. DR appearing from side of the Revenue relied on the orders passed by subordinate authorities and requested to confirm the same. 8. We have heard Ld. counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the Assessing Officer has made the addition of Rs.1,50,79,506/- on the basis of deposits made in the IDBI Bank account number 0535651000001007 which is claimed to be held jointly by the assessee with her husband. It is the claim of the assessee that she and her husband both are senior citizens and therefore in all the bank accounts her name is included as joint holder, however she is not doing any business and the business is run by her husband Mr Subash Keshav Mehta, (PAN ACTPM6758L) who is proprietor of M/s Keshav Giridhar Mehta who is maintaining regular books of accounts and getting the same audited u/s 44AB of the IT Act and also furnishing his return of income Printed from counselvise.com ITA No.1108/PUN/2025 7 regularly. It is also the claim of the assessee that the transactions made in the above IDBI Bank account are duly considered in the books of accounts maintained by her husband and all the transactions pertains to the business of her husband. It is also the claim of the assessee that the impugned IDBI Bank account is disclosed in the audited balance sheet of the assessee for the period under consideration. It was specifically pointed out that the account being a loan account is appearing on the liability side of the balance-sheet. Ld. AR also pointed out that all the bank accounts held by the husband of the assessee were reported in the income tax return filed by the husband of the assessee. In this regard copy of page no.17 of the income tax return is also produced before the bench wherein total 7 bank accounts including the impugned IDBI Ltd Bank account were reflected in the income tax return filed by the husband of the assessee. Ld. AR of the assessee also pointed out that the opening balance of the account and the closing balance of the impugned IDBI Bank account also matches with the balances reported in the balance sheet of the concerned period. Ld. AR also submitted that the husband of the assessee has reported total turnover of Rs.3,21,16,426/- for the period under consideration which also includes the impugned transaction entered into the IDBI Printed from counselvise.com ITA No.1108/PUN/2025 8 Ltd Bank account. In sum and substance it is the claim of the assessee that the turnover/ transaction entered into the impugned IDBI LTD bank account no.0535651000001007 does not belongs to her instead the transactions were entered into by her husband Mr. Subash Keshav Mehta (PAN ACTPM6758L) who is proprietor of M/s Keshav Giridhar Mehta and the same is also accounted for in the audited books of accounts and also disclosed in the audited balance sheet furnished along with the return of income by her husband Mr Subash Keshav Mehta. 9. Considering the totality of the facts of the case we find force in the above arguments of learned counsel of the assessee and accordingly in view of above discussion, we deem it appropriate to set aside the order passed by Ld. CIT(A)/NFAC and remand the matter back to the file of the Assessing Officer with a direction to frame the assessment order afresh as per fact and law after providing reasonable opportunity of hearing to the assessee and also after verifying the claim of the assessee that the impugned IDBI Ltd. Bank Account No.0535651000001007 is jointly held by the assessee and her husband Mr. Subash Keshav Mehta and that the transactions of Rs.1,50,79,576/- recorded in the above bank account is related to her husband & are duly accounted for in the audited Printed from counselvise.com ITA No.1108/PUN/2025 9 books of accounts of Mr Subash Keshav Mehta, (PAN ACTPM6758L) who is proprietor of M/s Keshav Giridhar Mehta and the husband of the assessee. Accordingly the grounds of appeal raised by the assessee are allowed for statistical purposes. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 05th day of August, 2025. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 05th August, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr.CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "