GAURAV GULATI S/O YASH PAL GULATI,CHANDIGARH vs. INCOME TAX OFFICER, WARD 6(2), MOHALI

Though the assessee has taken six grounds of appeal but his grievances revolve around two issues, namely ;

The brief facts of the case are that assessee has filed his return of income on 17.01.2018 declaring total income of Rs.3,19,610/-. The case of the assessee was selected for scrutiny assessment and a notice was issued u/s 143(2) of the Income Tax Act, 1961. The ld. AO has observed that during demonetization period, assessee has deposited cash in the bank account, out of his business transactions. The assessee also submitted that he has entered into an Agreement for sale of land with Smt. Kirandeep Kaur and received advance. He has also received gift from parents out of their personal savings and a sum of Rs.30 lacs was received as advance from Shri Avtar Singh Dhillon for migration purpose. The assessee further submitted that there was litigation between him and his wife on account of matrimonial disputes and cross FIRs were registered. Ultimately, matrimonial dispute has been resolved later on i.e on 12.12.2017 but due to this matrimonial discord, he could not focus on his business as well as collection of the sufficient material for explaining the cash deposited by him

Similarly, AO has made an addition of Rs.89,377/- which was credited in the bank account of the assessee but it was treated as ‘income from other sources’.

Appeal to the ld. CIT (Appeals) did not bring any relief to the assessee.

The ld. counsel for the assessee, at the very outset submitted that on account of matrimonial dispute and FIR lodged against him during the period when assessment proceedings were in session, he could not focus on collecting complete details for explaining his stand. Though he has filed the replies, but could not substantiate his claim with sufficient material. If one more opportunity be given to the assessee, then he would explain his position.

On the other hand, ld. DR submitted that assessee has duly filed reply which has been considered by both the authorities. It was the duty of the assessee to explain the source of deposit. The onus was upon the assessee and since

On due consideration of the above facts and circumstances, we are of the view that there was an FIR registered against the assessee by his wife and ultimately matrimonial litigation commenced which has been culminated in a decree of divorce in 2017. There could be a stressful atmosphere and assessee might have not been in a position to submit complete details, therefore, we are of the view that end of justice would meet if we grant one more opportunity to the assessee for explaining the source of deposits in the bank account. Accordingly, we set aside both the orders and restore this issue to the file of AO for fresh adjudication.

In the result, appeal is allowed.