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Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad
Before: Smt. P. Madhavi Devi & Shri A. Mohan Alankamony
This is assessee’s appeal for the A.Y 2009-10 against the order of the CIT (A)- 10, Hyderabad, dated 24.01.2019.
2. Brief facts of the case are that the assessee, an individual and an NRI did not file his return of income for the A.Y 2009-10. The AO received the information from the Investigation Wing that the assessee has no sources of income but has purchased immovable property and made investments in construction worth Rs.8,58,37,409/- during the financial year 2008-09 relevant to the A.Y 2009-10. Therefore, the assessment was reopened u/s 147 of the I.T. Act during the course of which, the assessee was required to explain the sources of investment. The assessee was also required to explain the cash deposits made in his savings bank a/c and substantiate each entry with supporting evidence. The assessee explained the sources which are reproduced by the AO at Para 2.1 of his order. However, the AO observed that the assessee has not been able to explain the sources properly and with documentary evidence in support of assessee’s contention. Therefore, he disallowed the assessee’s claim to the extent of Rs.3,49,05,687/- and brought it to tax. Aggrieved, the assessee preferred an appeal before the CIT (A) who dismissed the same ex-parte the assessee, and the assessee is in appeal before us by raising the following grounds of appeal:
“1. The learned First Appellate Authority is not justified in disposing of the appeal without affording a proper opportunity of being heard.
The learned First Appellate Authority failed to appreciate the fact that since the appellant was out of station and door locked the notice posting the case for hearing on 20.12.2018 could not be served.
The learned First Appellate Authority failed to appreciate the fact that all the investments are fully explainable with entries in Bank statement and the additions were made on presumptions and assumptions ignoring the evidences on record.
4. The learned First Appellate Authority is not justified in sustaining the addition of Rs.3,61,500 made u/s 69 of the I.T. Act.
5. The learned First Appellate Authority is not justified in sustaining the addition of Rs.2,20,00,000 made u/s 69 of the I.T. Act ignoring the claim that the payments were duly reflected in the Bank A/cs.
6. The learned First Appellate Authority is not justified in sustaining the addition of Rs.4,12,575/- made u/s 69C of the I.T. Act.
The learned First Appellate Authority is not justified in confirming the addition of Rs.1,48,52,000 being credits in Bank A/c treated as unexplained u/s 68 by the AO ignoring the claim that the deposits in cash were out of withdrawals from the Bank balance.
The appellant craves leave to add, amend or alter any of the above grounds of appeal at the time of hearing of appeal”.
3. The learned Counsel for the assessee submitted that the assessee had appeared before the CIT (A) on 20.12.2018 and made a request for adjournment and the same was also granted by the learned CIT (A) but the next date of hearing were not intimated due to which the assessee did not attend and the appeal was dismissed ex-parte the assessee. He submitted that the assessee being an NRI could not produce all the details before the AO, but the sources for the investments were his own funds transferred from his own account outside the country, and if given an opportunity, he will be able to explain the sources with documentary evidence before the AO.
The learned DR, on the other hand, supported the orders of the authorities below and submitted that the assessee did not file any details either before the AO or before the CIT (A).
Having regard to the rival contentions and the material on record, we find that the assessee had given explanation about the sources of investments and most of them are by way of cheques and some of them were from close relatives of the assessee. The CIT (A) has not decided the appeal on merit and the AO has held that the assessee has not substantiated his contentions with documentary evidence. Therefore, we deem it fit and proper to remand the issue to the file of the AO for denovo consideration in accordance with law. Needless to mention that the assessee shall be given a fair opportunity of hearing and the assessee is also directed to file all the necessary details before the AO for the early completion of the assessment of his income.
In the result, assessee’s appeal is treated as allowed for statistical purposes. Order pronounced in the Open Court on 2nd February, 2021.