Student’s Details Misused by Travel Agent: ITAT Quashes Unexplained Income Addition

The ITAT Ahmedabad deletes the Rs 12.11 lakh addition made on the assessee’s income on the grounds of unexplained deposits of about 10 lakh made during the assessment year 2011-12 in the bank account with Dena Bank. The tribunal notes that the assessee’s details were misused by the travel agents.

The assessee, Dhvalkumar Kantilal Barot, had not furnished its income tax return (ITR) for the Assessment Year 2011-12. The assessee’s case was reopened through a notice dated March 28, 2018, issued under Section 148 of the Income Tax Act. In response to the notice, the assessee filed its ITR, declaring its income of Rs 1,20,000 from salary and Rs 6 lakh from agriculture. Thereafter, several notices were issued to the assessee; however, he did not respond to any of them.

In conclusion, the tax authorities made an addition amounting to Rs 12.11 lakh to the assessee’s income on the grounds that he had deposited over Rs 10 lakh in his bank account with Dena Bank during the relevant period and did not explain the source of the same. Consequently, the tax department treated the deposits as unexplained income under Section 69A of the Income Tax Act.

The assessee, being aggrieved with the tax authorities’ action, approached ITAT Ahmedabad and claimed that during the AY 2010-11, he had applied for a student visa for study in the UK and for the same had approached a travel agent. From him. He was advised to open a bank account with Dena Bank, Ahmedabad; he had also signed blank cheques for good faith. These cheques were issued in the name of three individuals, whom the assessee was unaware of. He further claimed that it is possible that the travel agent had deposited the case in his bank account; however, he was not aware of the source of the amount.

The assessee claimed that his details were misused by the travel agent. Presently, the assessee is employed in the role of data entry operator, earning Rs 12,500 per month. During the relevant period of proceedings, he was a student, which explicitly indicates he was not capable of depositing such a high amount during the said period. When the ITAT examined the details disclosed by the assessee, it found them all genuine. Accordingly, the tribunal held that the impugned deposits in the assessee’s bank account with Dena Bank during the AY 2011-12 cannot be treated as unexplained income. The assessee’s appeal was allowed.