INCOME TAX OFFICER, WARD- 3(1), GANGTOK, GANGTOK, SIKKIM vs. NIRMALA SHARMA, SORENG, WEST SIKKIM

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ITA 2298/KOL/2024Status: DisposedITAT Kolkata13 February 2025AY 2018-19Bench: SHRI PRADIP KUMAR CHOUBEY (Judicial Member), SHRI RAKESH MISHRA (Accountant Member)10 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that crucial evidence supporting the assessee's claim for exemption under Section 10(26AAA) was not presented before the AO and was admitted as additional evidence by the CIT(A). Therefore, the matter was set aside and remitted back to the AO for fresh assessment.

What were the facts?

The assessee, a Sikkimese individual, claimed exemption under Section 10(26AAA) for income earned from contract work within Sikkim. The Assessing Officer (AO) reopened the case due to unexplained cash withdrawals and deposits, and the assessee failed to provide sufficient documentary evidence during assessment.

What were the issues?

Whether the assessee is eligible for exemption under Section 10(26AAA) and if additional evidence admitted by the CIT(A) was validly considered without proper procedure.

Which sections of the Income-tax Act were involved?

Section 10(26AAA),Section 69,Section 147,Section 144,Section 144B,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA

Before: SHRI PRADIP KUMAR CHOUBEY & SHRI RAKESH MISHRA

For Appellant: CA &

order : February 13th, 2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: These cross appeals filed by the assessee and the Revenue are against the order of the Ld. Commissioner of Income Tax (Appeals)- Page 2 of 10 “8. Adjudication: The averments of the Assessing Officer and the submission of the appellant have been considered by me carefully. The only issue raised in this appeal relates to addition made under sec.69 towards cash withdrawals made during the financial year 2017-18 relevant to Asst Year 2018-19. The assessment in this case was reopened to examine the source for cash withdrawals made by the appellant to the tune of Rs.1,08,28,180/-. When the assessment was reopened under Sec.147 to examine the source for cash withdrawals to the tune of Rs. 1.08,28,180, appellant submitted as below: The appellant is carrying the proprietorship business in the name and style of Nirmala Sharma having its registered office at Samsing Gelling Pipalay, Soreng West Sikkim. Mrs Nirmala Sharma is in the business of construction within the State of Sikkim. The enlistment Certificate as issued by the Government of Sikkim proving that she is a contractor is attached herewith. However, the appellant did not file a return of income under Sec.139(1) making a claim of exemption under Sec 10(26AAA). Appellant in the grounds of appeal and in her submission in the appeal was harping on the only issue that she was residing in Sikkim for a long period and also produced the certificate granted by the Sikkim Government and she also explained that she was working as contractor and the withdrawals in the bank account were payments made to labourers and it also consists of expenditure for building materials for executing the contract work.

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