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Facts
The assessee, an individual, declared income for AY 2017-18. A revised return was filed, and the case was selected for scrutiny. Due to non-compliance, a best judgment assessment was framed. The assessee appealed to the CIT(A)/NFAC against additions made for unexplained cash deposits and investment in gold jewellery.
Held
The Tribunal noted that the assessee failed to furnish documentary evidence to substantiate the source of cash deposits and investment in gold jewellery before the lower authorities. However, considering the details submitted in the paper book and the fact that the assessment was framed ex-parte, the issues were remitted to the Assessing Officer for de novo adjudication with a reasonable opportunity of hearing.
Key Issues
Whether the additions made on account of unexplained cash deposits during demonetization and unexplained investment in gold jewellery were justified, and if the assessee was denied a proper opportunity to present evidence.
Sections Cited
69A, 143(2), 142(1), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
Assessment Year : 2017-18 Balasaheb Kushaba Vs. ITO, Ward-6(2), Pune. Ninvangune, S. No.41, Plot No.41, Jadhav Nagar, Vadagaon Budruk, Pune- 411041. PAN : AFMPN4866Q Appellant Respondent Assessee by : Shri Prateek Jha Revenue by : Shri Aviyogi Ambadkar Date of hearing : 11.03.2025 Date of pronouncement : 30.05.2025 आदेश / ORDER
PER MANISH BORAD, AM:
This appeal filed at the instance of assessee is directed against the order of Ld. CIT(A)/NFAC dated 28.10.2024 which is arising out of the assessment order for Assessment Year 2017-18 framed on 19.12.2019 by the ITO, Ward-6(2), Pune.
The assessee has raised the following grounds of appeal :-
1. The Ld CIT(A) erred in sustaining the addition of Rs.12,69,000/- on account of money deposited in cash in bank account during demonetization period without appreciating that this amount also was part of the business receipt and it was not unexplained money within the meaning of section 69A of the IT Act.
2. The Ld CIT(A) erred in confirming the addition of Rs.5,12,181/- without appreciating that the assessee had acquired gold jewellery out of his savings from past earnings, agricultural income and current year's business income and the addition was not justified.
The above grounds of appeal are without prejudice to one another.
4. The appellant craves leave to furnish Additional Evidence which may be relevant to the above Grounds of Appeal in course of the appeal proceedings.
5. The appellant craves leave to amend or alter any of the above Grounds of Appeal or to add new Grounds of Appeal during the course of appeal proceedings.”
3. Brief facts of the case are that the assessee is an individual and income for A.Y. 2017-18 declared at Rs.,903,750/-. Subsequently, revised return was also filed on 14.04.2017. Thereafter, the case selected for scrutiny through CASS followed by validly serving notices u/s 143(2) and 142(1) of the Act. Since the assessee failed to make any compliance before Ld. Assessing Officer, best judgement assessment was framed u/s 144 of the Act and income assessed at Rs.27,34,815/-.
4. Aggrieved with above, the assessee preferred an appeal before Ld. CIT(A)/NFAC but partly succeeded. Now, the assessee is in appeal before this Tribunal against the addition confirmed by Ld.
CIT(A)/NFAC at Rs.12,60,000/- on account of unexplained cash deposit during the demonetization period and unexplained investment in gold jewellery of Rs.5,12,181/-.
Ld. Counsel for the assessee vehemently argued referring to certain case laws and paper book running into 66 pages explaining the source of alleged cash deposit and also stating that the gold jewellery was purchased by payment through banking channel.
On the other hand, Ld. DR stated that the assessee failed to make any submission before both the lower authorities.
We have heard rival contentions and perused the records placed before us. The assessee is aggrieved with following findings of the Ld. CIT(A)/NFAC confirming the addition of Rs.12,60,000/- and Rs.5,12,181/- u/s 69A of the Act :- “5.2.2 With regard to the grounds of appeal No.1 and 2, the appellant submitted that the cash deposits in its account of Rs.12,60,000/- during demonetization period and purchase of jewellery of Rs.5,34,661/- in cash was sourced out of his regular business and earlier earnings and savings. The appellant was provided with the ample opportunities to substantiate its claim through evidences during the assessment proceedings though he opted to remain non-compliant to the notices issued by the AO. Before the undersigned too, the appellant didn't furnish any documentary evidence that may substantiate the cash deposits in its account during demonetization period and cash payment made for purchasing jewellery. Hence, the source of the cash deposits in the account of the appellant during demonetization period and cash payment made for purchasing jewellery remain unexplained during the appellate proceedings also.
Accordingly, it is clear that the AO rightly made additions of Rs.12,60,000/- on account of unexplained money and Rs.5.12.181/- on account of unexplained investment. In view of the failure of the appellant in substantiating the above mentioned transactions, grounds of appeal
No.1 & 2 presented by the appellant are dismissed.”
8. From the perusal of above findings of Ld. CIT(A)/NFAC, we notice that the assessee did not furnish any documentary evidence to substantiate the explanation about the source of alleged cash deposit during the demonetization period and source of investments in purchase of gold jewellery. Since the assessee has filed the details before us in the paper book running into 66 pages, considering the fact that the order of Assessing Officer has been framed u/s 144 of the Act on account of non-appearance by the assessee we therefore, in the larger interest of justice and being fair to both the parties, deem it appropriate to remit both the issues raised in the instant appeal to the file of Ld. Jurisdictional Assessing Officer for de novo adjudication for which reasonable opportunity of hearing shall be granted to the assessee to furnish all the relevant details as has been filed before this Tribunal in the paper book. The assessee can also submit other details, if needed necessary, in support of grounds of appeal. The assessee should avoid taking unnecessary adjournment