KIRAN RUPCHAND OSWAL, PUNE,PUNE vs. INCOME TAX OFFICER, NFAC, PUNE

ITAT-Pune Page 1 of 4

In the extant appeal we note that, assessee filed his return of income for the impugned year on 28/07/2018 u/s 139(1) of the Act declaring total income of ₹4,14,260/- along with a claim of exempt income for ₹12,84,20,662/-. For the reason of substantial increase in the capital, the return of the assessee was subjected to limited scrutiny by service of notice u/s 143(2). In a scrutiny proceedings, the Ld. AO called upon the assessee to prove the source of ₹12,80,20,000/- credited to capital account with supporting evidences. In reply thereto, the assessee submitted that, he was one of the partners of ‘Ojas Project’ which owns a development right in prime location of pune which yet to commence its project, however on the occasion of retirement his share in the future profits of the firm has been credited to his capital account without actual receipt. The assessee also contended that, since the credit to capital solely represents a share of future profit from his firm, the same is exempt u/s 10(2A) of the Act. This explanation however failed to inspire concurrence of Ld. AO.

In the event of failure to establish and explain the genuine source of credit, the Ld. AO placing reliance on ‘CIT Vs Precision Finance (P) Ltd.’ reported in 208 ITR 465 (Kol) and N. K. Proteins Ltd Vs CIT’ reported in 2017-TIOL- 23-SC-IT, held the transaction as bogus / non genuine and made an addition of ₹12,80,00,000/- u/s 68 of the Act as unexplained cash credit vide order dt. 16/03/2021.

In an appeal before the Ld. NFAC the appellate reiterated his submission; however of no success the matter came on board by the present appeal.

In the course of hearing, the Ld. AR adverting to paper book filed containing 52 pages has candidly submitted that, neither during assessment nor appellate proceedings the case was properly represented by adducing evidential documents, for the reason one more opportunity of being heard be accorded by remanding the matter back to AO. Per contra, the Ld. DR adverting to detailed discussion laid in the impugned order has strongly objected the plea.

Without going into the merits of the case, we note that, the appellant during assessment as well before first appellate authority has dejectedly failed explain the source of credit by adducing cogent documentary proof in support of his claim, for the reason in the interest of larger justice, we deem fit to remand the matter back to the file of assessing officer for de-nova adjudication preferably in three effective hearings to the appellant. Thus ordered accordingly.