2015 (10) TMI 1472 - AT - Income Tax

Addition on cash deposited in the banks - treating the Long Term Capital gain as Short Term Capital Gain - Held that - In the present case, it appears that the assessee could not produce certain relevant documents during the course of assessment proceedings which were furnished to the ld. C.I.T.(A) who admitted the same under Rule 46A of the IT Rules and asked the remand report of the AO. However, in the impugned order there is no discussion about the contents of the remand report and the submission of the assessee. Therefore by considering the totality of the facts, it is of the view that this issue requires a fresh adjudication at the level of the AO. Accordingly the impugned order is set aside and the case is remanded back to the file of the AO to be adjudicated afresh in accordance with law, after providing due and reasonable opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Confirmation of addition of cash deposits in banks and treatment of Long Term Capital gain as Short Term Capital Gain.

Analysis:
The appellant raised several grounds in the appeal, challenging the order of the Assessing Officer and the CIT(A). The primary grievances related to the addition of cash deposits in banks and the treatment of Long Term Capital gain as Short Term Capital Gain. The appellant contended that the CIT(A) erred in upholding the Assessing Officer's decision without considering the submissions and remand report. The appellant argued that the additions were made arbitrarily without proper basis or evidence.

During the assessment proceedings, it was observed that the appellant made significant cash deposits in bank accounts without providing a satisfactory explanation for the source of funds. The Assessing Officer added the cash deposits to the appellant's income. Additionally, the appellant's claim of Long Term Capital gain was treated as Short Term Capital gain due to a lack of supporting evidence. The appellant, however, presented explanations regarding the cash deposits and the source of funds, including withdrawals and cash in hand.

Upon appeal, the CIT(A) confirmed the additions made by the Assessing Officer, despite the appellant's submissions and additional evidence provided during the proceedings. The CIT(A) did not adequately address the contents of the remand report or the appellant's arguments. The Tribunal, upon review, found that the issue required fresh adjudication at the Assessing Officer level. The Tribunal set aside the CIT(A)'s order and remanded the case for a reevaluation in accordance with the law, emphasizing the importance of providing the appellant with a fair opportunity to present their case.

In conclusion, the Tribunal allowed the appeal for statistical purposes, highlighting the need for a thorough and fair assessment of the issues raised by the appellant. The decision emphasized the importance of proper consideration of evidence and submissions in tax assessment proceedings to ensure a just outcome for the taxpayer.