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2025 (1) TMI 1173 - AT - Income TaxUnexplained investment u/s 69 - addition provisions of Section 115BB - Reliance on statement recorded u/s 131(1A) - as argued statement recorded u/s.131 at the of the survey cannot be used partially and it should be accepted in toto meaning thereby that deposits in the bank account of M/s Nirav Co. represented the sales made by the assessee Whether statement recorded u/s 131(1A) under coercion and duress? - HELD THAT - CIT(A) has dismissed the ground by holding that the assessee and Mr. Nirav Co. operated the impugned bank account for mutual benefit and hence statement of assessee was not under any coercion or duress. No specific details or evidences were given to the CIT(A) to support the above ground. Addition u/s 69A - CIT(A) has partly allowed the issue adopting the theory of peak credit to sustain the addition - appellant claimed to have sold the bullion during the demonetization period and the demonetized currency was deposited in the bank account of Nirav Co - survey team of the Investigation Wing and the AO have made detailed enquiry in the case - AO had added these amounts based on the statement of one of the partners of the assessee-firm - HELD THAT - CBDT has issued the above SOPs/Instructions/Internal guidelines note for handling cases related to demonetization. A verification check list - cash deposit was given for providing assistance to AO for verification of cash deposits and framing of assessment in demonetization related cases. It is found from the assessment order that the AO has not followed the above SOP/Guidelines/Instruction issued by the CBDT while passing the assessment order. It is well-settled that the Instruction /Circulars issued by the CBDT are binding on all officers and persons employed in the CBDT. Hon ble Supreme Court in case of Navnitlal C. Jhaveri vs. K. K. Sen 1964 (10) TMI 16 - SUPREME COURT held that Circulars issued by CBDT are binding on all officers and persons employed in execution of the IT Act even if they deviate from the provisions of the Act. As stated earlier the AO has made various additions primarily on the basis of statement of one of the partners of the assessee-firm and the survey/inquiry report of the Investigation Wing. He has not followed the SOP / Instruction / Guidelines issued by CBDT. In order to ensure uniformity in approach of AOs in handling OCM cases it was incumbent upon the AO to follow such SOP/Instruction etc. As decided in M/s Bhavana Co-operative Credit Society Niyamita 2022 (9) TMI 1606 - ITAT BANGALORE has under similar circumstances set aside the matter to the AO for verification and to pass fresh assessment after hearing the assessee. Thus we deem it proper to set aside the order of CIT(A) and restore the matter to the file of AO for verification of all the details and evidences as mandated under the said SOP/ Guidelines etc. The AO is also directed to verify all details filed by the assessee before the lower authorities and the Tribunal and to consider claim of the assessee in accordance with law - Accordingly the ground is allowed for statistical purpose.
1. ISSUES PRESENTED and CONSIDERED The judgment primarily revolves around the following core legal questions:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Statement under Coercion and Duress
Issue 2: Addition of Rs. 36,17,00,112/- under Section 69
Issue 3: Protective Addition of Rs. 13,36,00,000/-
Issue 4: Disallowance of Rs. 76,00,000/- for Silver Purchase
Issue 5: Applicability of Section 115BBE
3. SIGNIFICANT HOLDINGS
The Tribunal's decision underscores the necessity for a detailed factual analysis and adherence to procedural guidelines in cases involving significant unexplained cash deposits, particularly in the context of demonetization-related transactions.
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