V. MUTHUKRISHNAN,SALEM vs. ACIT, CIRCLE-1,, HOSUR
What did the Tribunal hold?
The Tribunal noted that both the AO and CIT(A) orders were decided against the assessee due to non-compliance, and the CIT(A) did not decide the issue on merits. Considering the principles of natural justice, the Tribunal decided to provide the assessee another opportunity to substantiate their case.
What were the facts?
The assessee filed an appeal for AY 2015-16 arising from an order of the CIT(A) which confirmed an addition made by the AO. The AO had made an addition of Rs. 1.26 Crore u/s 68 of the Act on account of advance received for land sale, disallowing interest of Rs. 6,39,015/-, citing failure to furnish identity, source, and creditworthiness of the persons involved. The CIT(A) confirmed this addition as the assessee did not file relevant documents.
What were the issues?
Whether the addition made u/s 68 for advance received for sale of land was justified without deciding on merits and giving the assessee a proper opportunity to substantiate their claim.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2011-12 arises out of the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 26.06.2024 in the matter of assessment framed by the Assessing Officer [AO] u/s. 143(3) of the Income-tax Act,1961 (hereinafter “the Act”) on 28.12.2017.
The only ground of appeal in this appeal of assessee is against confirming the addition u/s. 68 of the Act of Rs.6,39,015/- without considering the assessee’s submission .
1. 3. The assessee is an individual and deriving income from house property and scrap business. The assessee has filed return of income showing total income of Rs. 17,33,070/- on 31.10.2015. The A.O has made addition of advance received of Rs. 1.26 Crore u/s. 68 of the Act and disallowed interest of Rs. 6,39,015/-. Aggrieved, the assessee has filed an appeal before Ld. CIT(A). The Ld. CIT(A) has confirmed the addition as the assessee has not filed relevant documents to substantiate his case.
The Ld. Authorized Representative (A.R) of the assessee has argued that the Ld AO has made the addition u/s 68 in respect of advance received for sale of land u/s 68 on the ground that assessee has failed to furnish identity of the persons, source and credit worthiness of persons and Ld. CIT(A) has passed order without considering the submission made on 26.06.2024. The Ld. AR has submitted that the advance received has been paid back and assess is in position to substantiate the claim , therefore one more opportunity should be provide to the assessee in the interests of justice.
On the other hand, the Ld. Departmental Representative, has stated that the assessee was provided sufficient opportunity, but has not made proper submission and therefore, cost may be levied.
We have heard the rival submissions, and perused the materials available on record. On perusal of the orders of A.O as well as Ld. CIT(A), we find that both the orders have been decided against assessee due to non-compliance by the assessee. The Ld. A.R has submitted that the Ld. CIT(A) has not decided the issue on merits, therefore the case may be remanded back to the A.O for adjudication on merits. We are of the opinion that keeping in view the principles of natural justice, the assessee be provided with another opportunity of hearing to substantiate his case before A.O. Accordingly, we set aside the orders passed by the A.O and the Ld. CIT(A) and remit the matter back to the file of the A.O subject to payment of costs of Rs.10,000/-.
The same shall be paid by the assessee to Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within a period of one month from the date of receipt of this order and produce the receipt before the Ld. CIT(A). We also direct the assessee to appear before the Ld. CIT(A) on the date of hearing without fail and furnish complete details for his fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 07th February, 2025.
More judgments on Section 68
- ACIT Central Bilaspur, Bilaspur vs Arun Kumar Agrawal, SaktiITSSA 26/RPR/2025[2018-19]Status: Disposed21 Oct 2026AY 2018-19
- Neo Incorporation, Rajkot vs DCIT Circle- 1(2), RajkotITA 471/RJT/2026[2012-2013]Status: Disposed21 Oct 2026AY 2012-2013
- Bliss Dealtrade Private Limited, Kolkata vs Income Tax Officer - Ward 9(2) Kolkata…ITA 208/KOL/2026[2012-13]Status: Disposed21 Oct 2026AY 2012-13
- Hemal Paresh Madeka, Rajkot vs Asst.Commissioner of Income Tax…ITA 955/RJT/2026[2020-21]Status: Disposed19 Oct 2026AY 2020-21
- Ajaybhai Dineshbhai Bagdai, Near Central… vs The Income Tax Officer, Ward-1(2)(1), New…ITA 74/RJT/2026[2013-14]Status: Disposed19 Oct 2026AY 2013-14
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