2017 (3) TMI 574 - AT - Income Tax

Addition towards cash deposits into bank u/s. 68 - Held that - We find that the assessee did not respond/comply to the statutory notices issued u/s. 143(2) and 142(1) of the Act before the AO and also did not offer any explanation to the show cause notice dated 22-12-2011 issued by the AO mentioning why the deposit of ₹ 18 lakhs in the bank account should not be treated as income from undisclosed source and taxed to the total income of assessee. We find that before the CIT-A the assessee did not prosecute his case properly. Before him on every date the assessee sought adjournments. Therefore, it is clear that before the CIT-A there was no proper representation by the assessee. With regard to submissions of the ld.AR of assessee referring page 20 & 21 before us, we find that this submission was not before the authorities below. In such circumstances we deem it f it and proper to remand the issue to the AO for his verification and to pass an order to that effect as per law. - Decided in favour of assessee for statistical purposes.

Summary

Issues Involved:
- Whether the CIT-A justified in confirming the addition of ?18,00,000 towards cash deposits into bank u/s. 68 of the Act.

Analysis:
The only issue in this case was whether the CIT-A was correct in upholding the addition of ?18,00,000 as cash deposits into the bank account under section 68 of the Income Tax Act. The assessee, an individual, had filed his return of income for the assessment year 2009-10 but failed to comply with notices issued by the Assessing Officer (AO) under sections 143(2) and 142(1) of the Act. The AO found that the assessee had deposited ?18 lakhs in his bank account with Axis Bank Ltd based on information from AIR. Due to non-compliance, the AO added this amount to the total income of the assessee under section 144/143(3) of the Act.

The assessee challenged this addition before the CIT-A but failed to provide any supporting evidence to rebut the AO's addition. The CIT-A, noting the lack of compliance and explanation from the assessee, confirmed the addition under section 68 of the Act. The assessee then argued before the ITAT that the deposits were made by withdrawing from the same bank account and referred to cash flow statements to support this claim. The ITAT observed that the assessee did not respond to the statutory notices or offer any explanation before the AO, and failed to properly prosecute the case before the CIT-A.

Considering the submissions made before it, the ITAT found that the arguments presented by the assessee were not brought before the lower authorities. Therefore, the ITAT remanded the issue back to the AO for verification and directed the assessee to produce any evidence to substantiate the claim. The ITAT allowed the assessee's grounds for statistical purposes and ultimately allowed the appeal of the assessee. The judgment was pronounced on 28/02/2017 by the ITAT Kolkata.

In conclusion, the ITAT decided to remand the issue back to the AO for further verification and directed the assessee to provide evidence to support their claim. The appeal of the assessee was allowed for statistical purposes, indicating a partial victory for the assessee in this case.