ITAT Ahmedabad Deletes Rs 52 Lakh Addition based on information received through Insight Portal

The Income Tax Appellate Tribunal recently provided major relief to taxpayer Pragnesh Rameshbhai Pandya by deleting an addition of Rs 52 lakh made by the Income Tax Department under Sections 68 and 69A of the Income-tax Act, 1961. The case involved Assessment Year 2015-16.

The Assessing Officer had reopened the assessment based on information received through the Insight Portal alleging cash deposits of Rs 52 lakh in three Bank of Baroda accounts. The department treated the amount as unexplained money and added it to the assessee’s income. However, the Assessee argued that the mentioned accounts were not regular savings accounts but fixed deposit accounts in which cash deposits could not be made.

During the appellate proceedings, the Assessee obtained information under the RTI Act from the department and produced bank certificates showing that all three accounts were fixed deposits opened on 17.08.2013 and later closed during 2014 and 2015. The Assessee contended that the Assessing Officer failed to properly verify the bank records before making the addition.

The Tribunal observed that the Assessee discharged the initial burden by placing the documentary evidence from the bank. It also said the Faceless Assessing Unit added the amount without proper inquiry or verification. The RTI information did not clearly establish the alleged cash deposits of Rs 52 lakh either.

Accordingly, the ITAT held that the addition was not sustainable in law and directed the deletion of the entire addition. The appeal of the Assessee was accordingly allowed.