KALLAKURI PATTABHIRAMASWAMY PRASAD,RAJAHMUNDRY vs. ASSESSING OFFICER, WARD 2(1), RAJAHMUNDRY

In the above captioned appeal, the appellant filed an appeal before ITAT as he was aggrieved by the order of the Ld.CIT(A), who has confirmed the additions made by Ld.AO towards deposits made into his bank account to the extent of Rs.24.54 lakhs and Rs.13.79 lakhs. During the A.Y.2017-18, the appellant made cash deposits into his bank account as mentioned above. At the time of assessment, the Ld.AO issued certain notices to the assessee, wherein, it was mentioned that the assessee made certain cash deposits into his bank account during the demonetization period. As the assessee did not furnish any explanation for the nature and source of the cash deposits, the Ld.AO made addition of Rs.38.33 lakhs while completing the assessment.

Aggrieved by the order of the Ld.AO, an appeal was filed by the appellant before the Ld.CIT(A). From the order of the Ld.CIT(A), it is observed that 5 opportunities were given, requiring the explanation of the assessee with regard to the source of cash deposits made into his bank account. Since there was no response from the appellant, the Ld.CIT(A) dismissed the appeal of the assessee and confirmed the additions made by the Ld.AO.

As there was no relief to the assessee, an appeal was filed before ITAT, stating that he has got sources to explain the cash deposits made into his bank account. In the grounds of appeal/statement of facts, the appellant has stated that he has taken gold loans, utilized these loan amounts and subsequently after the purpose was over, the amounts were re-deposited into his bank account, which was appropriated by the bank towards the loan. Thus, the appellant tried to explain that the source of cash deposit is only the gold loans availed by him from the bank during earlier period.

Ld.DR opposed the arguments of the Ld.AR of the appellant by stating that, the explanation put forth before the Bench was not given to the lower authorities and hence the explanation furnished now should not be taken into consideration while disposing of the appeal. In other words, the Ld.DR has argued that there is no evidence for making cash deposits out of the gold loans availed by him and hence the appeal of the assessee should be dismissed.

Before proceeding to adjudicate the issue on merits, it was observed that the appeal was filed by the appellant with the delay of 356 days. The Ld.AR of the appellant filed certain medical certificates and the prescriptions evidencing that the assessee’s wife is a cancer patient, who is undergoing treatment and he has to accompany her to the hospital regularly. In view of the same, the delay in filing the appeal may be condoned and the matter may be adjudicated on merits.

The Bench has perused the medical certificates and the condonation petition filed by the Ld.AR of the appellant. It is a fact that the wife of appellant is having some medical problems and continuously taking medical treatment. There is no proof that the appellant was always accompanying his wife and hence the delay is attributed to the health problem of his wife. But, taking a lenient view, after perusing the condonation petition and the medical certificates issued by the doctors along with prescriptions, the Bench decided to condone the delay by imposing cost of Rs.5,000/-. The assessee is directed to pay this amount to AP State Legal Services Authorities within a month of receipt of this order. As pointed out by the Ld.DR, admittedly, there was no explanation with regard to the cash deposits made by the assessee into his bank account. The papers filed for the first time before the Bench, explaining the source of cash deposit are to be verified by the Ld.AO. In view of the same, the issue is remitted to the file of the Ld.AO for full examination of evidences filed before ITAT for the first time. The AO is directed to go through all these evidences and pass an order afresh after giving an opportunity to the assessee. After receiving the copy of challan with regard to the payment of cost, as mentioned above, the Ld.AO may start the proceedings afresh and pass an order as per law. With these observations, the issue is remitted to the file of the Ld.AO.

In the result, appeal filed by the assessee is allowed for statistical purpose.