AKULA SRINIVASA CHAKRAVARTI,RAJAHMUNDRY vs. INCOME TAX OFFICER, WARD-2(1), RAJAHMUNDRY

The assessee has taken four grounds of appeal in Form No. 36 and the main grievance is against the addition of Rs.1,40,57,038/- under section 69A of the Act, sustained by the Ld. First Appellate Authority in respect of additions on account of unexplained credits in bank account during the F.Y. 2012-13.

Brief facts emerging from the record are that, the assessee has purchased a plot of land measuring an area of Acres 2.73 Cents with an accumulated balances in his bank from various sources. The assessee has a returned income of Rs.9,56,390/- ( which included income from business and profession at Rs.4,87,924/-, capital gains Rs.6,76,137/- and income from other sources of Rs.77,592/- ). However, in absence of any satisfactory explanation regarding the sources of availability of cash in his bank account, the assessment was completed on a total income of Rs.1,50,13,428/- [which included an addition on account of unexplained deposits under section 69A of the Act of Rs.1,40,57,038/-].

The matter was carried in first appeal where submissions have been filed by the assessee explaining the source of deposits ( funds ) in bank account which according to the appellant has arisen out of sale of two plots of land, amounting to Rs.27,54,000/- and Rs.10,96,000/- both being credited in the bank on 13.09.2012 and 27.02.2013 respectively and from maturity proceeds of earlier Fixed Deposits amounting to Rs.25,48,038/- credited in bank on 25.02.2013. ( In support of its contention, the assessee has relied upon documentary evidences of Registered Sale Deeds and bank statements ).

However, the said documentary evidences and written submissions were not considered by the Ld. first appellate authority, and no remand report has been called for in respect of such fresh evidences as per Rule 46A, and the appeal was dismissed sustaining the additions.

Now before the tribunal the Ld AR of the assessee has filed an application for submission of additional evidences, apart from whatever submitted earlier and prayed for acceptance of the same, which is required for proper explanation regarding the source of the bank accumulations. The same includes confirmation letters from his father Shri Akula Posayya, regarding receipt of gift amounting to Rs.40,79,000/- and letters of confirmation from Smt. Hema Lalchand Darira regarding receipt of loan of Rs.10,00,000/- from her and from one Smt. Garima Narang along with documentary evidences and from M/S. Chakravarthi Builders & Constructions along with copies of ledger accounts and financial statements to prove the creditworthiness of the said loans.

The Ld.AR submitted that for proper adjudication of the case all the supporting evidences needs to be examined in its proper perspective and the entire deposits available in the assessee bank will stand fully explained by such evidences now submitted including the ones submitted earlier before the Ld. First Appellate Authority and since all are fresh evidences never filed before the AO at original stage , remand report is also required to be obtained under Rule 46A of the Rules’62.

He has also drawn the notice of the Bench to the application that has been filed before the Ld. First Appellate Authority vide letter dated 17.11.2022 whereby he has prayed for acceptance of fresh evidences and for calling of remand report. The Ld.AR now prays for a proper opportunity of hearing and for proper consideration of the documentary evidences and has prayed for remanding of the matter back to the file of Ld. First Appellate Authority.

The Ld. Departmental Representative (hereinafter in short “Ld. DR”) relied on the order of the Ld. CIT(A) but has no objection if the matter is remanded back for consideration of fresh documentary evidences for proper adjudication of the case.

We have heard the rival submissions and considered the materials on record and the Paper Book filed by the assessee and we are of the opinion that the documentary evidences have never been considered in course of assessment proceedings and were also not considered in Appellate Proceedings. As such, we are of the opinion that interest of justice will be served if the matter is remanded back to the Ld. First Appellate Authority for allowing the assessee an opportunity of filing of all the documentary evidences in support of his case and to consider the same for fresh adjudication in the matter, (after obtaining the necessary report as per provisions of law from the AO concerned).

As such, we are remand the matter back to the file of Ld. First Appellate Authority and the assessee is directed to file all evidences and submissions in support of his case and to fully cooperate in appellate proceedings.

The assessee will be allowed reasonable opportunity of being heard.

We have not expressed any opinion on merits of the case and all legal issues are left open.

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