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2014 (4) TMI 669 - AT - Income TaxAddition made u/s 68 of the Act Deposits in the bank account Opportunity to file submissions not provided - Held that - The FAA has proceeded to decide the issues after considering the submissions made by the assessee - It is not known as to whether the first appellate authority did call for the details relating to the loan transactions of earlier years or not - Similarly it is not known as to whether the assessing officer also did call for such kind of details there was merit in the claim of the assessees that they did not get sufficient opportunities to substantiate their submissions. The CIT(A) has proceeded to adjudicate the issue by making certain observations about the failure of the assessee to furnish the details and the observations are seriously disputed by the assessee - the assessees have filed copies of returns of income filed for earlier years as additional evidences would show that they were not furnished before the AO during the course of assessment proceedings the CIT(A) has made certain presumptions before proceeding to adjudicate the issues and the said presumption entertained by CIT(A) is being questioned by the assessees thus, the matter is required to be remitted back to the AO for fresh adjudication Decided in favour of Assessee.
Issues involved:
Appeals against order passed by Ld CIT(A)-32, Mumbai for assessment year 2009-10; Addition made under section 68 of the Act for deposits in bank accounts; Failure to furnish details explaining sources of cash deposits; Rejection of claim by Ld CIT(A) based on lack of supporting evidence; Discrepancies in financial statements and explanations provided by assessees; Examination of claims by Ld CIT(A) without calling for explanations from assessees; Lack of opportunity for assessees to substantiate submissions; Dispute over inferences drawn by Ld CIT(A); Adjudication of issues without considering difficulties faced by assessees; Need for fresh examination by assessing officer. Analysis: The appeals were filed against the order passed by Ld CIT(A)-32, Mumbai for the assessment year 2009-10. The issues in both appeals were identical and related to the addition made under section 68 of the Act for deposits in bank accounts. The assessees failed to furnish details explaining the sources of cash deposits, leading to the proposal by the assessing officer to assess the amounts as income. The Ld CIT(A) confirmed the additions, citing discrepancies in the financial statements and lack of supporting evidence provided by the assessees. The assessees claimed that the deposits were from loans given earlier, but failed to substantiate this with sufficient evidence. The Ld CIT(A) rejected the assessees' claims based on various case laws and observations regarding the assessees' inability to provide necessary details. The Ld CIT(A) also raised concerns about the assessees' financial transactions being primarily in cash, despite maintaining bank accounts. The assessees argued that they were not given adequate opportunity to explain the sources of deposits, and provided additional evidences from previous years to support their claims. The Ld CIT(A) and the Department presented conflicting views on the sufficiency of evidence and the examination of claims. The Ld CIT(A) made certain assumptions without seeking clarifications from the assessees, leading to disputes over inferences drawn. The assessees contended that they faced difficulties in providing details from transactions several years back. The Tribunal found merit in the assessees' claims of insufficient opportunity to substantiate their submissions and ordered a fresh examination by the assessing officer for a fair decision. In the interest of natural justice, the Tribunal set aside the orders of the Ld CIT(A) and directed the assessing officer to reexamine the issues after affording necessary opportunities for the assessees to be heard. The appeals were treated as allowed for statistical purposes, emphasizing the need for a thorough and fair assessment process to determine the sources of the deposits in question.
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