ANJALI ROHIT PANCHAL,MUMBAI vs. ITO WARD 32 (1)(1), MUMBAI, MUMBAI

In the instant case, the Assessing Officer (in short, the “AO”) made various additions. For the sake of convenience, we adjudicate the issues separately.

The first issue relates to the addition of Rs.13,53,929/- on account of unexplained increase in capital. The AO made the addition mainly on the ground that the Assessee failed to furnish supporting evidence regarding the source of the capital introduced, and the Ld. Commissioner affirmed the same.

Before us, the Assessee submits that the amount represents cash gifts received from her parents and close relatives on the occasion of her marriage solemnised on 03.12.2008. She further submits that, as per prevailing family customs, such gifts were given to financially assist her in starting the business, which commenced within four to five months of her marriage. The Assessee also claims that she had no taxable income prior thereto and that the initial capital was utilised towards business expenses.

On the contrary the Ld. DR refuted the claim of the Assessee and also submitted the issue remains to be properly adjudicated, specifically in the absence of relevant evidence and because of default of Assessee. And therefore the Assessee is not entitled for any leniency and/or opportunity.

We observe that, though the explanation furnished by the Assessee prima facie appears genuine and bona fide, however, the same remains unsupported by documentary evidence, including the names, particulars and confirmations of the persons from whom the gifts are claimed to have been received. Thus, for just decision of the issue under consideration and in the interest of substantial justice, this issue is remanded to the file of the Jurisdictional Assessing Officer (in short, the “JAO”) for decision afresh.

We clarify that the onus shall remain upon the Assessee to substantiate the genuineness and source of the capital introduced by furnishing the relevant evidence.

The next issue relates to the disallowance of depreciation of Rs.1,78,871/-. The authorities below recorded that the Assessee failed to furnish the purchase bills and installation certificates relating to the plant and machinery.

Before us, the Assessee submits that the machinery was installed during the financial year 2009-10 and, due to the lapse of considerable time, the relevant documents could not be produced. However, she seeks one more opportunity to substantiate the claim.

The Ld. DR on this issue also refuted the claim of the Assessee and submitted that this issue also remains to be properly adjudicated, specifically in the absence of relevant evidence and because of default of Assessee. And therefore the Assessee is not entitled for any leniency and/or opportunity.

Thus, considering the peculiar facts and circumstances, this issue is also remanded to the file of the JAO for decision afresh, after affording a reasonable opportunity of being heard to the Assessee.

The Assessee shall furnish all relevant submissions and supporting documents, and the JAO shall adjudicate both the issues in accordance with law.

Thus, the case is accordingly remanded to the file of the JAO for decision on the issues under consideration, afresh.