2017 (9) TMI 1915 - AT - Income Tax

Addition u/s 68 - cash deposits in bank account as undisclosed income - CIT- A confirmed addition - submission of assessee that the said amount represented sale consideration received by assessee for sale of land - assessee has submitted that the ld. CIT (A) has decided the appeal of the assessee ex parte without affording proper opportunity of hearing to the assessee - HELD THAT - In the interest of natural justice, we set aside the order of the ld. CIT (A). The matter is restored back to ld. CIT (A) for deciding the same on merits, after affording opportunity of hearing to the assessee. Appeal of the assessee is allowed for statistical purposes

Summary

Issues:
1. Addition of ?30,50,000 as undisclosed income - cash deposits in bank account.
2. Addition of ?15,00,000 as undisclosed income - cash deposits in bank account.
3. Addition of ?3,65,836 - difference between DLC and cost of asset transferred.
4. Appeal process - ex parte decision by ld. CIT (A).

Analysis:
1. The appellant challenged the addition of ?30,50,000 as undisclosed income due to cash deposits in the bank account. The appellant contended that the amount represented sale consideration for land, supported by sale agreement evidence. The ld. CIT (A) erred in confirming the addition, disregarding the unregistered agreement. The appellant sought deletion of the addition.

2. The appellant disputed the addition of ?15,00,000 as undisclosed income from cash deposits. The appellant explained that the deposits were from the return of advance received from a previous land transaction. The ld. CIT (A) upheld the addition without considering the source of the deposits. The appellant's submission was overlooked, leading to the confirmation of the addition.

3. The addition of ?3,65,836 was made for the variance between DLC and the asset cost transferred by the appellant to a partnership firm. The ld. CIT (A) confirmed the addition despite the appellant's argument that section 50C did not apply due to the transfer being in accordance with section 45(3) of the Act. The appellant's contention was dismissed, resulting in the addition being upheld.

4. During the hearing, the appellant's counsel raised concerns about the ex parte decision by the ld. CIT (A) without considering written submissions. The appellant requested a fresh hearing with proper opportunity for presenting their case. The ld. D/R supported the lower authorities' decisions. The ITAT set aside the ld. CIT (A)'s order, emphasizing natural justice. The matter was remanded to the ld. CIT (A) for a fresh decision after granting the appellant a fair hearing. Consequently, the appeal was allowed for statistical purposes.