2021 (5) TMI 210 - AT - Income Tax

Unexplained bank deposits - admission of additional evidences - assessee explained the source of cash deposits as sale proceeds of the property sold in the capacity of GPA holder - assessee filed a petition for admission of additional evidence along with a copy of sale deed - HELD THAT - We are of the view that the assessee's request for admission of additional evidence needs to be considered favourably. Accordingly, we admit the additional evidence and remit the matter back to the file of the Ld. CIT(A) to decide the appeal on merits after considering the additional evidence submitted by the assessee. The assessee is directed to submit the necessary information and cooperate with Ld. CIT(A) in disposing the appeal. We may clarify that in case of further failure or default by the assessee before the Ld. Commissioner then in that eventuality the assessee shall not be entitled for any leniency and the Ld. Commissioner shall be at liberty to decide the appeal of the assessee in accordance with law, while considering the peculiar facts and circumstances of the case. - Assessee appeal allowed for statistical purpose.

Summary

Issues:

1. Addition of cash deposits in bank accounts
2. Failure to explain the source of bank deposits
3. Consideration of additional evidence by the Ld. CIT(A)
4. Request for transfer of appeal and adjournment
5. Admission of additional evidence by ITAT
6. Direction to Ld. CIT(A) to decide the appeal on merits
7. Consequences of further failure by the assessee

Analysis:

1. The appeal was filed against the order passed by the Ld. Commissioner of Income Tax (Appeals) regarding the addition of cash deposits made in bank accounts for the A.Y. 2014-15. The AO had made the addition as the assessee failed to explain the source of these deposits, leading to the appeal before the CIT(A).

2. The assessee explained before the CIT(A) that the cash deposits were sale proceeds from a property sold as a GPA holder. However, the CIT(A) decided the appeal without considering this explanation, prompting the assessee to appeal to the ITAT for further review.

3. The assessee requested the admission of additional evidence, including a sale deed, stating that the appeal hearing was inconveniently located, and the CIT(A) passed the order without considering adjournment requests. The ITAT, after hearing the arguments, decided to admit the additional evidence and remit the matter back to the CIT(A) for a fresh decision based on the new evidence.

4. The ITAT clarified that the assessee must cooperate with the CIT(A) in the further proceedings and submit necessary information. It warned that any further failure or default by the assessee could result in the CIT(A) deciding the appeal without leniency, taking into account the facts and circumstances of the case.

5. Ultimately, the ITAT allowed the appeal for statistical purposes, indicating that the decision was made to correct the record without affecting the substantive rights of the parties involved. The appeal was allowed, and the order was pronounced in open court on April 29, 2021.