2024 (5) TMI 391 - AT - Income Tax

Rectification u/s 154 - The Assessee filed a rectification application, which was dismissed by the CIT(A) based on the assumption of Tribunal's adjudication on the issue. - Whether the issue of unexplained cash addition was not at all entered into by the coordinate Bench while deciding the appeal ? - HELD THAT - As observed above, while reproducing the order of coordinate Bench in the misc. application, it comes up that the specific observation was made at the time of disposal of misc. application that the Bench has not disputed the findings of learned CIT(A) on this issue. This observation is categorical finding with regard to the fact that findings of learned CIT(A) qua the unexplained cash additionin para 5.5 remains untouched. This finding being not challenged by the Revenue and being not adverse to the assessee, was certainly not required to be determined in the appeal of the assessee. Merely because there was a ground mentioning composite figure of Rs. 2,37,08,076/-, it cannot be said that the coordinate Bench had adjudicated upon the issue of unexplained cash also. Thus, order of learned CIT(A) in dismissing the application u/s 154 of the Act is not justified. Accordingly, the appeal is allowed and the issue on merit is restored to the file of learned CIT(A) to decide the application of the assessee afresh in the light of aforesaid observations of this Bench. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues involved:
The issues involved in this case are related to the addition of unexplained cash and jewellery in the assessment order passed under section 143(3) u/s 154 read with Section 250 of the Income Tax Act, 1961 for the assessment year 2014-15.

Summary of Judgment:

Unexplained Cash Addition Issue:
The appellant challenged the addition of unexplained cash and jewellery before the Commissioner of Income Tax (Appeals) (CIT(A)). The CIT(A) observed that the cash amount received by the appellant was sufficient to explain the seized cash and household expenses. However, the entire addition, including the unexplained cash, was confirmed. The appellant filed a rectification application before the CIT(A) highlighting the mistake in confirming the unexplained cash addition. The rectification was not allowed. The Tribunal partly allowed the appeal but did not address the unexplained cash addition issue. A miscellaneous application was filed to address the unexplained cash issue, but it was dismissed by the Tribunal. The appellant then approached the CIT(A) u/s 154, requesting rectification based on the findings that the unexplained cash addition should be deleted. The CIT(A) dismissed the application citing that the issue was already decided by the Tribunal. The Tribunal allowed the appeal, stating that the issue of unexplained cash addition was not addressed by the coordinate Bench and the findings of the CIT(A) remained untouched. The appeal was allowed, and the issue was restored to the file of the CIT(A) for fresh consideration.

In conclusion, the Tribunal found that the order of the CIT(A) in dismissing the application u/s 154 was not justified, and the issue of unexplained cash addition needed to be re-evaluated in light of the observations made by the Tribunal. The appeal of the assessee was allowed for statistical purposes.