2018 (9) TMI 787 - AT - Income Tax

Addition on account of cash deposits found to be made in the bank account of the assessee by treating the same as unexplained cash credit - Held that - A perusal of the documents filed by the assessee shows that the same are relevant to decide the issue involved in the assessee s case. It is also noted that some of the said documents have been made available to the assessee only after the disposal of the appeal of the assessee by the CIT(A) vide his impugned order. DR has not disputed that these documents filed by the assessee as additional evidence are relevant to decide the issue involved in the present appeal. He however has contended that an opportunity should be given to the AO to verify the said documents which are being filed by the assessee for the first time before the Tribunal to support and substantiate his case, as find merit in this contention of the learned DR. CIT(A) on the issue under consideration is set aside and the matter is restored to the file of the AO for deciding the same afresh after giving the assessee one more opportunity to support and substantiate his case on the basis of fresh evidence. Appeal of the assessee is treated as allowed for statistical purpose.

Summary

Issues involved: Addition of cash deposits in bank account as unexplained cash credit.

Analysis:
1. Background: The appeal was filed against the order of Ld. CIT (Appeals) regarding the addition of ?25,00,000 made by the AO and confirmed by the Ld. CIT(A) as unexplained cash credit.

2. Assessee's Claim: The assessee, engaged in advertising business, claimed that the cash deposits were from the sale of agricultural land at Midnapore, supported by a sale agreement. However, the AO considered the sale agreement as bogus due to lack of evidence of agricultural income in previous years.

3. AO's Decision: The AO made the addition of ?25,00,000 as unexplained cash credit under section 68, as the assessee failed to prove the source of cash deposits adequately.

4. Appeal before CIT(A): The assessee challenged the addition before the Ld. CIT(A) who asked for proof of the purchaser's identity and payment capacity, which the assessee failed to provide. The Ld. CIT(A) upheld the addition due to lack of conclusive evidence of the land sale.

5. Tribunal's Decision: The Tribunal considered additional evidence submitted by the assessee post the CIT(A)'s order, relevant to prove land ownership and sale. The Tribunal set aside the CIT(A)'s order, giving the AO an opportunity to verify the new evidence and decide the matter afresh.

6. Outcome: The appeal was treated as allowed for statistical purposes, with the case remanded to the AO for fresh consideration based on the additional evidence submitted by the assessee.

7. Conclusion: The Tribunal's decision emphasized the importance of providing sufficient evidence to substantiate claims, allowing for a fair opportunity to present new evidence before the tax authorities for a just resolution of the matter.