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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI DUVVURU R.L. REDDY & SHRI G. MANJUNATHA
आदेश / O R D E R
PER DUVVURU RL REDDY, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-1, Madurai, in dated 31.12.2019 for the AY 2013-14.
Briefly, the facts of the case are that the assessee filed his return of income for the AY 2013-14 on 19.07.2013 declaring total income of Rs.2,11,160/-. The case was selected for scrutiny and notice u/s.143(2) of the Income Tax Act, 1961 (in short “the Act") was issued on 04.09.2014. In response to the statutory notice, the assessee furnished the details. After considering the details furnished by the assessee, the assessment u/s.143(3) was completed by assessing the total taxable income of the assessee at Rs.19,61,160/- after making addition on account of unproved loan liability as well as cash gift received from the wife of the assessee. On appeal, the Ld. CIT(A) confirmed the addition on merits after considering the materials available on record.
On being aggrieved, the assessee is in appeal before the Tribunal. None appeared on behalf of the assessee despite issuance of notice. The notice issued by the Tribunal received back “unserved”.
The assessee has not furnished any change of address. Hence, we proceed to decide the appeal on merits after hearing the Ld. DR.
We have heard both the parties, perused the materials available on record and gone through the orders of authorities below. During the course of assessment proceedings, the AO found that the assessee has made cash deposit of Rs.93,10,460/- in his Savings Bank A/c in State Bank of India, Keelapavoor. The assessee submitted before the AO that he has engaged in agriculture and trading in paddy and rice and that all his transactions are routed through the afore-mentioned bank account and that the cash deposit made into the aforesaid bank account represents the transactions of the assessee’s business which was duly admitted in the Income Tax Return. The AO further found that the assessee had invested a sum of Rs.26,15,000/- in the partnership firm M/s. MAA Modern Rice Mills. Before the AO, the assessee has submitted that he had received unsecured loans of Rs.7,50,000/- from friends and relatives and a cash gift of Rs.10,00,000/- from his wife.
4.1. Before the Assessing Officer, the assessee submitted confirmation letters purported to have been issued by the above mentioned loan creditors. However, it was observed that the confirmation letters did not contain the date of loan, mode of payment of loan, the details of banking transaction through which such loans were granted etc. In order to verify the genuineness of loan, credit worthiness of the loan creditor and the authenticity of transaction, the Assessing Officer issued letters to the loan creditors for verification.
The confirmation letters sent to loan creditors at serial No. 2, 4 and 6 returned un-served with the postal remark "No such addressee".
Similarly, the letters issued to loan creditors at serial No. 1, 3 and 5 also did not evoke any response. Subsequently, the assessee changed his stand and submitted through his letter filed on 18.03.2016 that the assessee had received unsecured loan from his friends and relative of only Rs.2,50,000/- which was directly deposited into the assessee's aforesaid savings bank account. The Assessing Officer, however, compared the submissions made regarding the deposit in the bank account which was not found to be correct. The Assessing Officer also observed from the Tax Audit Report filed in Form No. 3CB/3CD that all the unsecured loans were received by the assessee through cheque and demand drafts only. It was, however, found by the Assessing Officer that loan entries were not reflected in the assessee’s bank account. As has been explained earlier, the loans could not be confirmed from the loan creditors. In the totality of facts and circumstances of the case, the claim of loan having been taken from the loan creditors was not proved as the assessee could not prove the authenticity of loan transaction, the credit worthiness of the loan creditor and genuineness of the transaction. Accordingly, the entire cash loan of Rs.7,50,000/- was added as unexplained income of the assessee.
4.2 Despite service of various notices posting the appeal for hearing by the ld. CIT(A), there was no response from assessee’s side.
Moreover, no written explanation or documentary evidence are furnished. During the course of appellate proceedings, besides making the claim in the grounds of appeal that the addition made by the AO was not correct, in the absence of documentary evidence, the Ld. CIT(A) confirmed the addition.
4.3 With regard to the cash gift of Rs.10,00,000/- offered by the wife of the assessee, before the AO the assessee has submitted that the source of such gift in the hands of his wife Smt. A. Kadalmani Alangulam was profit from agricultural activity, profit from trading in paddy and vegetables and jewel loan of Rs.3,00,000/-. However, since the assessee could not substantiate with reference to the documentary evidence before the AO, the cash gift of Rs.10,00,000/- was brought to tax. On appeal, the assessee has not produced any documentary evidence to prove that the assessee’s wife was creditworthy to have given a cash loan of Rs.10,00,000/-. Both the issues are under the appeal. However, since no representation during the course of appellate proceedings and moreover, notice issued by the Tribunal has also not been served on the assessee, despite the fact that the assessee has not furnished any change of address either before the Ld. CIT(A) or before the Tribunal, we are of the considered opinion that the assessee shall be afforded one more opportunity of being heard to meet the ends of justice. Accordingly, we direct the Ld. CIT(A) to afford a final opportunity of being heard to the assessee for furnishing complete details as may be required by the ld. CIT(A) to decide the issues raised in the appeal afresh in accordance with law by issuing notice through responsible officer of the Department in person for strict compliance. The assessee is also directed to furnish the details before the Ld. CIT(A) to decide the issues afresh failing which, the assessment already completed and confirmed by the Ld. CIT(A) stands sustained.
In the result, the appeals filed by the assessee is allowed for statistical purposes.
Order pronounced on the 28th day of October, 2021, in Chennai.