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Facts
The assessee, a contractor, made cash deposits of Rs. 26,05,353/- in a bank during FY 2017-18 but initially failed to file an income tax return. Following a notice under Section 148, he filed a return declaring income under Section 44AD. The Assessing Officer, for lack of explanation, added the entire cash deposit as unexplained income under Section 69A, which was upheld by the CIT(A).
Held
The Tribunal admitted additional evidence, including loan agreements and bank confirmations, acknowledging sufficient cause for their delayed submission. It remitted the entire issue back to the Assessing Officer for fresh adjudication, directing the AO to consider the new evidence and grant the assessee a reasonable opportunity of being heard.
Key Issues
Admissibility of additional evidence at the tribunal stage; treatment of cash deposits as unexplained income under Section 69A versus assessee's claim of income from contract works and presumptive taxation.
Sections Cited
250, 44AD, 148, 69A, 115BBE
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Income Tax Appellate Tribunal, “A’’BENCH: BANGALORE
Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 17.12.2024 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1071292073(1) passed u/s
The assessee has raised the following grounds of appeal:
SP No.37/Bang/2025 AnilraddiKarakalli, Talikoti Page 3 of 8 3. The assessee has submitted an application for admission of additional evidences under Rule 29 of ITAT Rules, 1963 dated 21.4.2025, in support of his claim, which is reproduced below:
SP No.37/Bang/2025 AnilraddiKarakalli, Talikoti Page 6 of 8 4. On going through the above application for admission of additional evidences, we take a note of the fact that certain crucial document which are now being submitted before us were not available either at the time of assessment or at the time of first appellate authority. In these circumstances, assessee has no remedy except to file these additional evidences before this Tribunal.
4.1 After considering the rival submissions, in our opinion, the action of the assessee is bonafide as the assessee was prevented by sufficient cause in not filing these documents during the course of assessment as well as first appellate stage. Being so, in our considered view, in the given facts and circumstances of the case, it is appropriate to admit these additional evidences for adjudication in the interest of justice & fair play. Accordingly, these additional evidences are admitted for the purpose of adjudication.
The assessee is engaged in the Contract works & wage works. As per the information, it was seen by the AO that the assessee had actually deposited cash of Rs. 26,05,353/- in the bank during the F.Y. 2017-18 but did not file his return of Income. During the course of the Assessment proceedings, the assessee in response to notice u/s 148 of the Act, filed his return of Income declaring total income of Rs.3,61,323/-. The assessee claimed that his source of income is only from the contract works and the cash received had only been deposited in the Talikoti Sahakari Bank Niyamit. Further the assessee having the overdraft facility in the Corporation bank for the purposes of his business. The AO in the absence of sufficient explanation regarding the source of such financial transactions added the entire deposits of Rs. 26,05,353/- as unexplained Income u/s 69A of the Act.
SP No.37/Bang/2025 AnilraddiKarakalli, Talikoti Page 7 of 8 5.1 Before the ld. CIT(A)/NFAC, the assessee again claimed that the deposits were sourced from contractual receipts, cash withdrawals from overdraft loan account, and payments made to wage workers. Income was offered under the presumptive taxation u/s 44AD of the Act declaring the gross receipts of Rs. 27,35,278/- .The ld. CIT(A)/NFAC upheld the action of AO in the absence of satisfactory additional evidence/explanation to substantiate his claim.
5.2 We are of the opinion that the turnover/gross receipts from contract works declared by the assessee in the return filed u/s 148 of the Act is not disputed by the authorities below. Now since these additional evidences were produced for the first time before us and it is not available before the authorities below, hence, in the interest of justice & fair play, we deem it fit to remit the entire issue in dispute to the file of AO to decide afresh in accordance with law after taking into consideration the additional evidences produced before us. Needless to say, reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to furnish all the relevant details/ information/record to substantiate his claim. It is ordered accordingly.
In the result, appeal of the assessee is partly allowed for statistical purposes.
Since we have remitted the entire issue back to the file of AO, the Stay petition No.37/Bang/2025 for the AY 2018-19 filed by the assessee becomes infructuous and accordingly dismissed.
SP No.37/Bang/2025 AnilraddiKarakalli, Talikoti Page 8 of 8 8. In the combined result, appeal of the assessee is partly allowed for statistical purposes and the Stay petition filed by the assessee is dismissed. Order pronounced in the open court on 24th July, 2025 Sd/- Sd/- (Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member Bangalore, Dated 24th July,2025. VG/SPS Copy to: