2022 (7) TMI 937 - AT - Income Tax

Unexplained cash deposited in bank account - assessee has filed an application for additional evidence containing copy of confirmation of the debtors along with their PAN cards - whether the cash deposits are out of recovery of advance given/outstanding amount/accumulated cash balance etc. or not. ? - HELD THAT - The assessee in her application for admitting the additional evidence has submitted that evidence could not be furnished before the Ld. CIT(A) on same were collected after the proceeding before the Ld. CIT(A) and therefore same may be admitted. Though the confirmation from the debtors have been collected subsequent to the order of Ld. CIT(A) but same are crucial to the determination of issue-in-dispute whether the cash deposits are out of debtors realized in the year under consideration. In view of the facts and circumstances of the case and interest of the substantial justice, we admit the additional evidence in the form of confirmations of the debtors and their PAN cards filed as additional evidence in terms of Rule 29 of the ITAT Rules, 1963. The order of the CIT(A) on the issue-in-dispute is accordingly set aside and matter is restored back to the Ld. CIT(A) for deciding afresh, in the light of the additional evidence filed by the assessee. It is needless to mention that both the assessee and Assessing Officer shall be afforded adequate opportunity of being heard. The grounds raised by the assessee are accordingly allowed for statistical purposes.

Summary

Issues:
1. Natural Justice
2. Unexplained Investment u/s. 69 [?14,98,995/-]

Issue 1: Natural Justice:
The appeal was filed by the assessee against the order passed by the Ld. Commissioner of Income-tax (Appeals)-53, Mumbai, for assessment year 2014-15, raising concerns regarding the breach of natural justice. The grounds included the lack of proper opportunity for the appellant to be heard and the passing of the order without due consideration of facts and submissions. The appellate order was challenged as being bad and illegal due to these reasons. The issue of natural justice was a significant point of contention in this case.

Issue 2: Unexplained Investment u/s. 69 [?14,98,995/-]:
The primary issue under consideration was the confirmation of the addition made by the Assessing Officer under section 69 of the Income-tax Act, 1961, regarding unexplained cash deposits in the bank account of the assessee. The Ld. CIT(A) upheld the disallowance, citing lack of cooperation and failure to provide necessary details. The appellant claimed that the cash deposits were explained as part of the cash balance, amounts collected from debtors, and refunds of advances. However, the Assessing Officer treated the cash deposit as unexplained due to the absence of proper documentation and cooperation. The appellate proceedings revealed discrepancies in the details provided by the assessee, leading to the sustained addition of ?14,98,995/-. The issue revolved around the source of the cash deposits and the adequacy of explanations provided by the assessee.

In a detailed analysis, the Tribunal considered the submissions of both parties and admitted additional evidence in the form of confirmations of debtors and their PAN cards, crucial to determining whether the cash deposits were from debtors realized during the relevant year. The order of the Ld. CIT(A) was set aside, and the matter was remanded for fresh consideration based on the additional evidence. The decision emphasized the importance of substantial justice and fairness in the proceedings, ensuring that both the assessee and the Assessing Officer would have adequate opportunities to present their case. Ultimately, the appeal was allowed for statistical purposes, highlighting the significance of proper evidence and adherence to procedural fairness in tax assessments.