INCOME TAX ACT, 1961

Section 143(3) Section 69

Assessment - Addition to income - Unexplained cash deposited in assessee society's hand assessed on protective basis -

Liquidator/official representative attended the proceedings and filed replies wherein it was again reiterated that the alleged cash deposited in various bank accounts of the society during the assessment years 2008-09 to 2014-15 were not in the nature of income but they were the amount received from the members of the society to be deposited in bank and cheques/DD to be issued to the vendors related to the particular member and for this service society charged commission. However, the AO noticed that apart from few of the parties who accepted to have given cash to the society for issuing cheque/DD majority of the persons named in the Excel sheet refused to have given any cash entered into such transaction. Based on this observation, it was assumed that the unaccounted cash had been deposited in the bank account of the society on the direction of Manish Kothari. Accordingly protective addition was made in the hands of the society and substantive addition was made in the hands of Manish Kothari (President of the Society) for the unexplained investment under section 69. Held: The element of income, if any embedded in the alleged transactions of cash deposited and cheque issued to various concerns consistently/correspondingly from the bank accounts held in the name of the registered co-operative society having its Permanent Account Number and operating under the registered bye-laws, to be taxed under the provisions of IT Act should only be in the hands of the assessee society, and not in the name of the office bearers including the President of the Society Manish Kothari (who is also one of the assessee in the captioned appeal before this Tribunal).

Relied:ITO v. Ch. Atchaiah (1996) 218 ITR 239 (SC) : (1996) 84 Taxman 630 (SC) : 1996 TaxPub(DT) 726 (SC), Maneklal Agrawal v. Dy. CIT (2017) 84 Taxmann.com 116 (SC) : 2017 TaxPub(DT) 2120 (SC), M.V. Valliappan v. CIT (1988) 170 ITR 238 (Mad-HC) : (1988) 37 Taxman 46 (Mad-HC) : 1988 TaxPub(DT) 927 (Mad-HC), Asstt. CIT v. Janak P. (2003) 86 ITD 15 (Ahd-Trib) : 2003 TaxPub(DT) 149 (Ahd-Trib) , ITO v. K. Venkatesh Dutt (2004) 87 TTJ (Bang-Trib) : 2004 TaxPub(DT) 461 (Bang-Trib), CIT v. Sriram Jagannath (2001) 250 ITR 689 (Raj-HC) : (2001) 119 Taxman 581 (Raj-HC) : 2001 TaxPub(DT) 1233 (Raj-HC), M.V. Valliappan v. CIT (1988) 170 ITR 238 (Mad) : (1988) 37 Taxman 46 (Mad) : 1988 TaxPub(DT) 927 (Mad-HC), Asstt. CIT v. Janak P. (2003) 86 ITD 15 (Ahd-Trib) : 2003 TaxPub(DT) 149 (Ahd-Trib), ITO v. K. Venkatesh Dutt (2004) 87 TTJ (Bang-Trib.) : 2004 TaxPub(DT) 461 (Bang-Trib) and CIT v. Sriram Jagannath (2001) 250 ITR 689 (Raj) : (2001) 119 Taxman 581 (Raj.) : 2001 TaxPub(DT) 1233 (Raj-HC).

REFERRED : CIT v. Smt. P.K. Noorjahan (1999) 237 ITR 570 (SC) : (1999) 103 Taxman 382 (SC) : 1999 TaxPub(DT) 80 (SC), S. Venkat Reddy v. ITO (2016) 76 Taxmann.com 128 (Hyd-Trib), Amit Agrawal v. Dy. CIT (Kol-Trib) ITA No. 337/Ko/2014 Order, dated 9-9-2016, Binod Kumar Jha v. ITO (Kol-Trib) ITA No. 577/Ko/2013 Order, dated 20-11-2015, CIT v. Tirupati Construction Co. (2015) 55 Taxmann.com 308 (Gujarat High Court) : 2015 TaxPub(DT) 2848 (Guj-HC).

FAVOUR : In assessee's favour (Partly)

A.Y. : 2008-09 to 2015-16

INCOME TAX ACT, 1961

Section 143(3)

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