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2024 (8) TMI 804 - AT - Income TaxAddition u/s 68 - non considering submission made by the Assessee - Assessee as an individual has undoubtedly received Rs. 1.80 crores in HSBC account from one party in UAE - re-opening of the assessment was made and assessee has failed to produce documentary evidence with respect to the above loan to show identity and credit worthiness of the lender as well as genuineness of the loan to the satisfaction of the Ld. AO - AO also recorded statement of the Assessee u/s 131 in which Assessee admitted to have received the above sum but could not explain the ingredient under Section 68 HELD THAT - Before us, the Assessee has submitted e-proceedings acknowledgement wherein the Assessee has submitted various submissions including written statement as well as several judicial pronouncements. CIT(A) passed the appellate order without considering any of the submissions made by the Assessee. As the appellate order was passed this written statement as well as the evidence and contentions raised by the Assessee submitted should have been considered by the Ld. CIT(A). Non consideration of submission made by the Assessee by the Ld. CIT(A) makes his order un-sustainable in law. Therefore we set aside the whole issue back to the Ld. CIT (A) to consider all the submissions made by the Assessee before him as well as granting further opportunities of hearing to the Assessee - direction to CIT(A) to consider the same and decide the issue on the legalities of re-opening of the assessment as well as the merits of the addition - Assessee appeal allowed as directed above for statistical purposes.
Issues:
1. Failure to consider submissions by the Appellant by the CIT(A). 2. Addition to total income under Section 68 of the Act. 3. Refundable deposit wrongly treated as income. Analysis: Issue 1: Failure to consider submissions by the Appellant by the CIT(A) The Appellant contended that the CIT(A) did not properly consider the submissions made by the Appellant before passing the order. The Appellant had submitted responses on the e-portal on 7th June 2023, which were not acknowledged by the CIT(A) in the order. The Appellant argued that the CIT(A) erred in dismissing the appeal without taking cognizance of the submissions made. The ITAT found merit in the Appellant's argument and held that the CIT(A) should have considered all submissions before passing the order. Consequently, the ITAT set aside the issue back to the CIT(A) for reconsideration, directing the CIT(A) to take into account all submissions made by the Appellant and provide further opportunities for a fair hearing. Issue 2: Addition to total income under Section 68 of the Act The Assessing Officer and the CIT(A) had added Rs. 1.80 Crores to the total income of the Appellant under Section 68 of the Income Tax Act. The Appellant argued that the statement of the bank account should not be considered as books of account and hence does not fall within the scope of Section 68. The ITAT observed that the Assessing Officer and the CIT(A) erred in treating the bank statement as books of account. The ITAT agreed with the Appellant's contention and held that the addition made by the authorities was not in compliance with the provisions of the Act. Therefore, the ITAT directed that the addition to the total income should be set aside. Issue 3: Refundable deposit wrongly treated as income The Assessing Officer and the CIT(A) considered a refundable deposit of Rs. 1.80 Crores received by the Appellant as income. The Appellant argued that the amount received was a refundable deposit and should not be treated as income. The ITAT noted that the authorities failed to properly examine the facts and circumstances of the case before considering the deposit as income. The ITAT agreed with the Appellant that the order passed by the authorities was bad in law. Consequently, the ITAT directed that the order treating the refundable deposit as income should be set aside. In conclusion, the ITAT allowed the appeal of the Appellant on all grounds, directing the CIT(A) to reconsider the case, consider all submissions made by the Appellant, and provide further opportunities for a fair hearing.
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