2015 (10) TMI 158 - AT - Income Tax

Addition u/s. 68 - Assessee has stated that he has withdrawn the cash from the bank for the purchase of land but again deposited the same due to non-utilization of the same. Assessee has also changed his stand that he has received some advance from his father-in-law and also filed confirmation alongwith PAN card. - Held that - AO called the information alongwith documentary evidence from the assessee for substantiating the cash deposits in the bank and for purchased a motor vehicle. Assessee has furnished some information before the AO and AO issued notice u/s. 133(6) to Axis Bank asking them to submit the bank statement of all the relevant period. In response to the same, the bank has submitted the statement on account of the assessee for the period 1.4.2008 to 31.3.2009 which confirmed that cash deposit of ₹ 25,07,400/-. The assessee was confronted that the cash deposits in his bank account. We find that before the assessee has changed its stand before the Ld. CIT(A) as rightly stated by the Ld. DR. Assessee has stated that he has withdrawn the cash from the bank for the purchase of land but again deposited the same due to non-utilization of the same. Assessee has also changed his stand that he has received some advance from his father-in-law and also filed confirmation alongwith PAN card. This averment has not been made before the AO and the Ld. First Appellate Authority has wrongly deleted the addition in dispute by accepting the arguments of the assessee. We are of the view that the assessee has changed his stand before the Ld. First Appellate Authority in which the AO has not given a chance to rebut the documentary evidence filed before the Ld. CIT(A) and the addition in dispute is contrary to the principles of natural justice. In our considered opinion, the impugend orde of the Ld. CIT(A) is not sustainable in the eyes of law and therefore, we cancel the impugend order. Keeping in view the facts and circumstances of the present case and the averments made by the assessee before the AO as well as Ld. CIT(A) alongwith the documentary evidence filed by him, we are of the view that the issue in dispute requires re-examination at the level of the Assessing Officer, therefore, we set aside the issue in dispute. - Decided in favour of revenue for statistical purposes.

Summary

Issues:
1. Addition of Rs. 25,07,400 under section 68 of the Income Tax Act, 1961.
2. Addition of Rs. 34,423 on account of bank interest not offered for tax.
3. Addition of Rs. 1,64,100 as unexplained money under section 68 of the Income Tax Act.

Analysis:

Issue 1:
The appellant, an individual, declared income from job work as a Civil Contractor and white washing. The Assessing Officer noted cash deposits of Rs. 25,07,400 in the appellant's bank account and a purchase of a motor vehicle worth Rs. 5,44,478. The appellant claimed to have received Rs. 16,00,000 from M/s Locus Propbuild Pvt. Ltd., Rs. 3,00,000 from Mr. Satish Chandra Bhandari, and Rs. 4,53,000 from Sh. Badri Prasad Meena. However, the appellant failed to provide sufficient evidence regarding the creditworthiness of these lenders. The AO added the entire deposit as income under section 68 of the IT Act. The First Appellate Authority partly allowed the appeal and deleted the addition. The Tribunal observed discrepancies in the appellant's stand before the AO and the First Appellate Authority. The Tribunal found the deletion of the addition by the First Appellate Authority contrary to the principles of natural justice and unsustainable in law. The issue was set aside for re-examination by the Assessing Officer.

Issue 2:
Additionally, the AO added Rs. 34,423 as bank interest earned by the appellant but not offered for tax in the return. This amount was not contested separately and was part of the overall appeal. The Tribunal's decision to set aside the entire issue for re-examination by the Assessing Officer includes this amount for reconsideration.

Issue 3:
Furthermore, the AO added Rs. 1,64,100 as unexplained money under section 68 of the IT Act, related to the purchase of a motor car financed by ICICI Bank. The appellant changed his stand before the First Appellate Authority, introducing new arguments not presented before the AO. The Tribunal found this change in stand without proper opportunity for rebuttal against the principles of natural justice. Consequently, the Tribunal set aside this addition for re-examination by the Assessing Officer.

In conclusion, the Tribunal allowed the Revenue's appeal for statistical purposes, setting aside all three issues for re-examination by the Assessing Officer.