2013 (5) TMI 104 - AT - Income Tax

Addition in income unexplained income - investment in land - entire payment for purchase of land in cash - Held that - It is a fact that during the course of assessment the assessee was asked to furnish name, address, PAN number along with identity proof and confirmation to whom the payments have been made but there was no compliance by the assessee. There is nothing on record to demonstrate that the aforesaid details were produced even before CIT(A). - we are therefore of the view that to meet the ends of justice the matter be sent back to the file of the A.O. with a direction to him to decide the matter afresh.

Summary

Issues Involved:
Appeal against order of CIT(A) regarding addition of unexplained investment under section 69.

Analysis:
1. The appellant, engaged in trading, filed an income tax return declaring income. The assessment was framed under section 143(3) with total income determined higher. The appeal was dismissed by CIT(A), leading to the current appeal.
2. The main issue raised was the addition of Rs.9 lakhs as unexplained investment under section 69. The AO observed cash payment for land purchase, asked for proof, but the appellant did not comply. CIT(A) upheld the addition.
3. CIT(A) found the appellant's actions inadequate in proving the source of cash payments for land purchase. The AO treated it as undisclosed investment, but CIT(A) disagreed with invoking section 69, stating the investment was accounted for.
4. During the appeal, the appellant argued that since the investment was in the books and audited balance sheet, section 69 should not apply. The DR supported the AO's decision due to lack of information.
5. The Tribunal noted the investment in land in the balance sheet, all cash payments, and the appellant's non-compliance with providing details. The matter required further verification.
6. Consequently, the Tribunal decided to remand the case back to the AO for a fresh decision after considering all evidence and giving the appellant a chance to provide the necessary details.
7. The appeal was allowed for statistical purposes, emphasizing the need for a thorough review by the AO with complete information from the appellant to ensure justice.

This detailed analysis of the judgment highlights the key legal aspects and the Tribunal's decision to remand the case for further examination, stressing the importance of providing complete and relevant information during tax assessments.