HARIKRISHNAN BALAKRISHNAN,BANGALORE vs. CIRCLE INT TAX 1(1)(2), DELHI

Though, assessee has raised various grounds in the Memorandum of Appeal, however, at the time of hearing, learned counsel for the assessee restricted his arguments on the merits of the addition made of Rs.30,33,131. Therefore, we will confine our adjudication to this issue only.

Briefly, the facts are that assessee is a non-resident individual working with a concern in United Arab Emirate (UAE) since 2010 as a permanent employee. The Assessing Officer received information indicating that during the year under consideration, assessee had deposited cash in his saving bank account and also received interest on such account. Since, assessee had not offered such income to tax, the Assessing Officer reopened the assessment under Section 147 of the Act. Alleging that assessee did not comply with the statutory notices issued and didn’t appear in course of assessment proceedings, the Assessing Officer proceeded to complete the assessment ex parte, to the best of his judgment by invoking the provisions of section 144 of the Act. While doing so, he determined the total income of assessee at Rs.40,33,131. Assessee contested the aforesaid addition by filing an appeal before learned Commissioner (Appeals).

After considering the submissions of assessee in the context of facts and material on record, learned Commissioner (Appeals) granted partial relief to assessee by deleting an amount of Rs.10,00,000 out of the addition made by the Assessing Officer. In other words, learned Commissioner (Appeals) sustained the addition to the tune of Rs.30,33,131.

Before us, learned counsel appearing for the assessee submitted that the source of deposit in the bank account was well explained by assessee before first appellate authority. However, without considering them, learned Commissioner (Appeals) has confirmed a part of the addition made. To substantiate his claim, learned counsel for the assessee drew our attention to various documents placed in the paper book, which were stated to have been furnished before learned first appellate authority. Thus, he submitted, the addition made should be deleted.

Learned Departmental Representative, drawing our attention to the observations of the learned Commissioner (Appeals), submitted, there is nothing on record to suggest that assessee furnished requisite documentary evidences to prove the source of cash deposits. He submitted, the documents now furnished by assessee in the paper book were not furnished before the first appellate authority as assessee has not given any certificate to establish such fact.

We have considered rival submissions and perused the material available on record.

Undisputedly, the issue arising for consideration is the addition made on account of cash deposited in the bank account. Admittedly, before the Assessing Officer assessee neither appeared nor furnished any documentary evidence to explain the source of cash deposits.

From the observations of learned Commissioner (Appeals) in para 9 of the impugned order, it appears that the relevant documentary evidences, such as, evidence for claim of employment, details of salary received, proof of income in UAE, copy of UAE bank account etc. were not furnished by assessee. Even, before us, learned counsel appearing for the assessee was unable to demonstrate that the documentary evidences filed at this stage were filed before first appellate authority. Thus, essentially, the factual finding of learned Commissioner (Appeals) with regard to non-furnishing of documentary evidences remains uncontroverted. However, considering the fact that assessee has in his possession documentary evidences to explain the source of cash deposits, we are of the view, assessee deserves an opportunity to establish his claim through such documentary evidences by furnishing them before the Assessing Officer. For enabling assessee to do so, we restore the issue to the file of the Assessing Officer for de novo adjudication.

Needless to mention, the Assessing Officer must afford reasonable opportunity of being heard to the assessee before deciding the issue.

In the result, appeal is partly allowed for statistical purposes. Order pronounced in the open court on 20th September, 2022.