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Facts
The assessee's appeal is against an order of the Ld.CIT(A) confirming an addition of Rs.4,56,48,732/- on account of cash deposits during demonetization as unexplained money under Section 69A of the Income Tax Act. The assessee had initially not filed a return but later filed one after a notice for reassessment under Section 148, declaring a lower income.
Held
The Tribunal held that the additional evidences filed by the assessee before the Ld.CIT(A) were crucial and required factual verification. Therefore, the Tribunal restored the appeal to the Ld.CIT(A) for fresh adjudication, directing the admission of the earlier additional evidences and allowing the assessee to furnish further evidence.
Key Issues
Whether the Ld.CIT(A) was justified in confirming the addition of unexplained cash deposits without properly considering the additional evidence filed by the assessee.
Sections Cited
147, 144, 144B, 69A, 139, 148, 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH,
Before: SHRI S.BALAGANESH & SHRI S.S. VISWANETHRA RAVI
आदेश/ O R D E R
PER M. BALAGANESH, AM:
The appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as Ld.CIT(A), in short] in Appeal No. ITBA/NFAC/S/250/2025- 26/1078569555 (1) dated 16.07.2025 for the assessment year 2 -: 2017-18 against the order of assessment passed u/s. 147 r.w.s.144 r.w.s.144B of the Income Tax Act,1961 (hereinafter referred to as the Act) dated 21.01.2025 by the Assessing Officer, Assessment Unit, Income Tax Department (hereinafter referred to as Ld. AO).
Though the assessee has raised several grounds of appeal, the only effective issue to be decided in the instant case is, whether the Ld.CIT(A) was justified in confirming the addition made in the sum of Rs.4,56,48,732/- on account of cash deposits made during demonetization period as unexplained money u/s.69A of the Act in the facts and circumstances of the case.
We have heard rival submissions and perused the material available on record. The assessee did not file his return of income u/s.139 of the Act. Information was received in accordance with the risk management strategy formulated by CBDT for the financial year 2016-17 relevant to assessment year 2017-18 that there were cash deposits made in the bank account of the assessee. Accordingly, assessment was sought to be reopened vide issuance of notice u/s.148 of the Act. In response to the notice u/s.148 of the Act, assessee filed his return of 3 -: income declaring total income of Rs.3,47,280/-. During the course of reassessment proceedings, source for entire cash deposits made in the bank account were sought from the assessee. The assessee pleaded that he had borrowed loan from City Union Bank for purchase of property at Kumbakonam and that was not in possession of the bank statements; that he has been requesting the bank to furnish the bank statements. The assessee also made a submission that the cash deposits were made out of cash withdrawals. After giving ample opportunities to the assessee, the AO issued a final show-cause notice to the assessee stating that the credits in the bank account stood improperly explained and accordingly, proceeded to add Rs.4,56,48,732/- as unexplained money u/s.69A of the Act for want of evidence from the side of assessee.
Before the Ld.CIT(A), the assessee filed additional evidences under Rule 46A of the Income Tax Rules by seeking to explain that there was some loan borrowed from bank and such borrowing were subjected to certain withdrawals in cash and that such cash has been subsequently deposited in the bank account of the assessee and hence, the entire deposits in the bank account stood properly explained warranting no addition. These 4 -: additional evidences were not admitted by the Ld.CIT(A) on the ground, ample opportunities were given by the AO to the assessee. We find that additional evidences submitted by the assessee before the Ld.CIT(A) goes to the root of the matter and requires factual verification. Hence, in the interest of justice and fair play, we deem it fit and appropriate to restore this appeal to the file of the Ld.CIT(A) for de novo adjudication qua the dispute before us in accordance with law. The Ld.CIT(A) is directed to admit the earlier additional evidences filed by the assessee. The assessee is also given liberty to furnish fresh evidences, if any, together with additional grounds, if any, in support of his contentions. With these directions, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24th October, 2025 at Chennai.