2015 (1) TMI 314 - AT - Income Tax

Unexplained investments - purchase of immovable properties - AO s enquiry regarding the source of investment as reflected in the information received, the assesses informed that they were out of drawings from partnership firm - investments were not reflected in the assessee s books - CIT(A) partly allowed the assessee s appeal - Held that - important aspect of the explanation of the assessees in this regard is that assessee have made the investments after making necessary drawings from the partnership firm M/s.Deco De Trend. Now the bank statement of M/s.Deco De Trend and the concerned accounts of the firm are relevant for proper adjudication in this case. We find that it is not clear from the records as to whether the assessee has submitted these documents or as to whether these documents were requisitioned and examined by the appellate authorities. We further find that in the appellate order the ld. CIT(A) has simply affirmed AO s remand report without giving a proper finding of his own. In these circumstances in our considered opinion interest of justice will be served if the issues raised in this appeal are remitted to the file of AO. Accordingly the issues raised in these appeals are remitted back to the file of AO. The AOs are directed to consider the case afresh after giving the assesses proper opportunity of being heard. - Matter remanded back - Decided in favour of assesees.

Summary

Issues:
1. Dismissal of appeals by CIT(A) based on non-submission of bank statements for cross-verification.
2. Dismissal of appeals without considering factual positions, evidence, and explanations.
3. Addition of amounts by CIT(A) without proper consideration of relevant facts and supporting documents.
4. Violation of principles of natural justice in the appeals process.

Analysis:
Issue 1:
The appeals were filed against the orders of the CIT(A) for the Assessment year 2007-08. The CIT(A) dismissed the appeals of separate assessees due to non-submission of bank statements for cross-verification, which were not requested during the hearing proceedings. The appellants argued that this dismissal violated the principles of natural justice as they had submitted the bank statements before the DCIT and CIT(A) previously. The CIT(A) failed to consider the bank statements submitted, leading to the dismissal of the appeals.

Issue 2:
The CIT(A) also dismissed the appeals without considering the factual positions, evidence, and explanations provided by the assessees during the hearing proceedings. The appellants contended that the dismissal was unjustified, arbitrary, and unlawful. They requested a fair opportunity for cross-verification of the source of investment and deletion of the additional amounts imposed by the DCIT.

Issue 3:
In another case, the CIT(A) confirmed the addition of an amount made by the DCIT without proper consideration of relevant facts and supporting documents. The CIT(A) relied on the concluding remark of the remand report without conducting a thorough assessment of the evidence presented by the appellant. The appellant argued that the order was based on incorrect premises and contrary to the factual position.

Issue 4:
The assesses, who were partners in a partnership firm, faced additions by the AO based on information received regarding their investments in immovable properties. The AO noted that these investments were not reflected in the assesses' books, leading to the impugned additions. The CIT(A) dismissed one appeal and partly allowed others based on a remand report obtained from the AO. However, the ITAT found discrepancies in the handling of the case by the CIT(A) and directed the issues to be remitted back to the AO for proper consideration after giving the assesses a fair opportunity to be heard.

In conclusion, the ITAT allowed all the appeals for statistical purposes and remitted the issues back to the AO for a fresh consideration, emphasizing the importance of following principles of natural justice and thoroughly examining all relevant evidence before making decisions.