Loading judgment…
Facts
The assessee's case was reopened under Section 147 of the Income Tax Act, 1961, for not filing a return of income for AY 2018-19 despite receiving sale consideration for immovable property. The Assessing Officer recomputed long-term capital gains and made additions for bank credits.
Held
The Tribunal set aside the order of the Ld.CIT(A) and restored the issue to the Assessing Officer for reconsideration. The Ld.CIT(A) had dismissed the appeal ex-parte without considering the assessee's explanations.
Key Issues
Whether the Ld.CIT(A) was justified in dismissing the appeal ex-parte without considering the assessee's explanation, and whether the additions made by the AO for bank credits were substantiated.
Sections Cited
147, 148, Chapter VIA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad SM ‘B’ Bench, Hyderabad
Before: Shri Manjunatha G. & Shri K.Narasimha Chary
(निर्धारण वर्ा/Assessment Year: 2018-19) Sudha Murthy Boyina Vs. Income Tax Officer Hyderabad Ward-12(6) [PAN :ACEPB4211A] Hyderabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: None रधजस् व द्वधरध/Revenue by: Shri Srikanth Reddy Y, DR सुिवधई की तधरीख/Date of Hearing: 22/01/2025 घोर्णध की तधरीख/Date of 29/01/2025 Pronouncement: आदेश / ORDER PER. MANJUNATHA G., A.M: This appeal filed by the assessee is directed against the order dated 14.08.2024 of the learned Commissioner of Income Tax (Appeals) [Ld.CIT(A)], National Faceless Appeal Centre (NFAC), Delhi, pertaining to A.Y.2018-19.
The brief facts of the case are that, the case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (“the Act”) for the reason that the assessee has received sale consideration on sale of immovable property, however, not filed her return of income for the A.Y.2018-19 and therefore, notice Sudha Murthy Boyina u/s 148 of the Act was issued and served on the assessee. In response to the notice u/s 148 of the Act, the assessee has filed her return of income on 19.06.2023, declaring ‘Nil’ total income, after claiming deduction of Rs.198/- under Chapter VIA and current year loss of Rs.35,96,384/-. The case was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer called upon the assessee to file necessary evidences, including details of sale of property, computation of long term capital gains and also bank statements for the relevant assessment year. In response, the assessee has filed all details including capital gain statement and also explained the source for cash credits in the bank account out of gift received from V.Aravind Kumar, son-in-law, maturity amount received from Prudential ICICI Insurance, gift from B.Ritika, daughter and other transactions. The Assessing Officer, after considering the relevant details filed by the assessee, recomputed the long term capital gain from sale of property by reducing the cost of construction and worked out long term capital loss of Rs.20,39,239/- as against long term capital loss computed by the assessee at Rs.35,96,384/-. The Assessing Officer further made addition of Rs.17,47,736/- towards credit in the bank account as income from other sources and after allowing deduction for investment under Chapter VIA of Rs.1,39,420/-, determined the total income at Rs.16,08,514/-.
Aggrieved by the assessment, the assessee preferred an appeal before the CIT(A). Before the Ld.CIT(A), the assessee Sudha Murthy Boyina neither appeared nor filed any details. Therefore, the Ld.CIT(A) disposed of the appeal filed by the assessee on the basis of material available on record and upheld the additions made by the Assessing Officer towards credits in the bank account and re-computation of short term capital loss.
Aggrieved by the Ld.CIT(A) order, the assessee is now in appeal before the Tribunal.
None appeared for the assessee, although the notice of hearing was sent to the address given in Form 36 filed by the assessee. The postal authorities returned the notice of hearing unserved with the remark ‘unclaimed’. Therefore, the appeal filed by the assessee is heard and disposed of ex-parte, on the basis of material available on record. The Assessing Officer made additions towards total credits in the bank account on the ground that the assessee could not explain the credits with relevant evidences. We find that the assessee has filed details in response to notice issued by the Assessing Officer and explained the credits in the bank account from various sources of income including gift received from V.Aravind Kumar, son-in-law, gift from B.Ritika, daughter, loan from Vivek Paloor, friend, maturity amount received from prudential ICICI Insurance, interest credit by bank etc. This fact has been recorded by the Assessing Officer in his assessment order on page 5 and 6. Although the assessee has filed submission with regard to nature and source of credit in the bank account, but the Assessing Officer made addition under the head ‘income from Sudha Murthy Boyina other sources’ on the ground that no supporting evidences have been filed by the assessee. Before the Ld.CIT(A), admittedly, the assessee neither appeared nor filed any details. Further, the Ld.CIT(A) dismissed the appeal filed by the assessee in cryptic two line order, without considering the explanation furnished by the assessee before the Assessing Officer. Since the order passed by the Ld.CIT(A) is ex-parte and further the Assessing Officer had taken a contrary view and made addition towards credits in bank account, even though he admitted that the assessee has filed submission on the issue, in our considered view, the issue needs to go back to the file of the Assessing Officer for reconsideration. Thus, we set aside the order of the Ld.CIT(A) and restore the issue back to the file of the Assessing Officer and also direct the Assessing Officer to reconsider the issue denovo in accordance with law, after providing reasonable opportunity of hearing to the assessee.
In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the Open Court on 29th January, 2025.