RAMESH GADE,WARANGAL vs. INCOME TAX OFFICER, WARD-1, WARANGAL

The assessee has raised several grounds in this appeal. However, the crux of the issue is that the Ld.CIT(A) has erred in confirming the addition made by the Ld.AO with regard to the cash deposits to the extent of Rs.16,08,305/- by treating it to be ‘unexplained investment’.

Brief facts of the case are that the assessee is an individual, filed his return of income on 10-04-2017, declaring total income of Rs.2,97,498/- from salary and House Property. The case was selected for scrutiny under CASS for Limited Scrutiny to examine the cash deposited. Accordingly, notice u/s.143(2) and 142(1) of the Act and show cause notice were issued to the assessee. During the course of scrutiny assessment proceedings, in spite of several opportunities, the assessee failed to furnish the requisite documents called-for by the Ld.AO. Therefore, the Ld.AO made the addition of Rs.16,08,305/- as ‘unexplained investment’ u/s.69 of the Act, due to lack of evidence explaining the source of accounted income for having made the investment.

Aggrieved, the assessee filed an appeal before the CIT(A). However, the assessee failed to furnish the supporting documents/details to substantiate the cash deposits before the CIT(A) also. Therefore, the Ld.CIT(A) dismissed the appeal, duly sustaining the addition of Rs.16,08,305/- made by the Ld.AO towards unexplained cash deposits.

Aggrieved by the order of the Ld.CIT(A), the assessee has filed this appeal before the Tribunal.

At the outset, Ld.AR submitted before me that the Ld.AO has not offered proper opportunity to the assessee of being heard and passed ex-parte order, which was further confirmed by the Ld.CIT(A). The Ld.AR also submitted that, the assessee is now in possession of the requisite documents/details to substantiate the source of the accounted income with respect to the cash deposited in the bank account. It was therefore requested that the case may be remitted back to the file of Ld.AO for fresh consideration.

The Ld.DR vehemently opposed the submissions of the Ld.AR and requested for confirming the order of the Ld.CIT(A).

Having heard the rival submissions through video conference and carefully perusing the materials on record, I find that the assessee had failed to furnish the details of the source of income with regard to the cash deposits made in the bank account of the assessee. Further, the assessee has failed to appear before the Ld.CIT(A) at the time of hearing and has not properly co-operated before the Ld.AO in his proceedings. In this situation, I do not find much merit in the arguments advanced by the Ld.AR. However, considering the submissions of the Ld.AR that the assessee is now in possession of sufficient documents to establish his accounted source of income, in the interest of justice, I hereby remit the appeal back to the file of Ld.AO for fresh consideration. Needless to mention that assessee shall be provided with fair opportunity of being heard. I also make it clear that if the assessee/assessee’s Counsel fail to promptly co-operate before the Ld.Revenue Authorities in their proceedings, the Ld.Revenue Authorities shall be at liberty to pass appropriate order in accordance with law and merit based on the materials before them.

In the result, the appeal of the assessee is treated as allowed for statistical purposes.