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Facts
The assessee appealed against the CIT(A)'s order confirming additions made by the AO. The AO had reopened the assessment under Section 147 and made additions based on alleged mismatches in cash available for property purchase, identifying certain credit entries and cash withdrawals as unexplained.
Held
The Tribunal noted that crucial documents and explanations regarding loans from father and cash withdrawals from wife were not presented before the AO. Therefore, the Tribunal set aside the impugned orders and restored the issues to the AO for fresh adjudication after allowing the assessee to submit the evidence and providing a proper hearing.
Key Issues
Whether the additions made by the AO based on certain credit entries and cash withdrawals were justified without considering the explanation of loans and cash withdrawals from close relatives, and whether additional evidence should be allowed at the appellate stage.
Sections Cited
147, 148, 144B, 56(ii)
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Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
HYBRID HEARING O R D E R PER RAJ PAL YADAV, VP
The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT(A)’] dated 06.06.2024 passed for assessment year 2013-14.
The assessee has taken four grounds of appeal
, however, his grievance revolves around two issues, namely, ld. A.Y. 2013-14
2. CIT (Appeals) has erred in confirming the additions of Rs.21 lacs and Rs.6,78,092/-.
3. With the assistance of ld. Representative, we have gone through the record carefully. We find that the assessment order dated 31.03.2022 has been passed ex-parte u/s 144B read with Section 147 of the Income Tax Act. The assessee has filed his original return of income on 30.07.2013 declaring total income at Rs.3,82,220/-. The AO has reopened this assessment by issuance of a notice u/s 148 on 25.03.2021. The reason for this re-opening is certain mis-match in cash available with the assessee vis-à-vis the property purchased by him. The AO, thereafter, perused the accounts of the assessee from Punjab National Bank and State Bank of India. He found that certain credit entries are there and ultimately made addition of Rs.21 lacs on account of such credit entries. Similarly, he made an addition of Rs.6,78,092/-.
4. Before us, ld. counsel for the assessee has submitted that total addition of Rs.27,78,092/- has been made for the reason that assessee has made deposits in the bank account but failed to appreciate that he has taken loan of Rs.11 lacs and A.Y. 2013-14 3 Rs.10 lacs from his father through Account Payee Cheques and these loans were returned by the assessee. Hence, there is no unexplained credit in the accounts of the assessee. Similarly, another sum of Rs.6,78,092/- represents the cash withdrawal by the wife of the assessee which has been given to him. The assessee sought permission to adduce additional evidence and produced copy of the statement from Central Bank of India. The assessee has also produced bank statement of M/s Ganpati Traders, M/s Hari Om Traders and Smt. Rakhi Bansal. All these bank statements are being sought to be produced for the reason that assessee could demonstrate source of funds came to his possession and how these funds have been returned back by him.
On due consideration of the above facts and circumstances, we are of the view that these documents have not been filed before the AO. Therefore, we set aside both the impugned orders and restore these issues to the file of the AO. The assessee will be at liberty to submit any of these documents before the AO. The ld. AO is directed to go through the bank statements and any other evidence submitted by the A.Y. 2013-14 4 assessee before re-adjudicating the issues. He will provide a due opportunity of hearing to the assessee. If the amounts are being taken from the father and the wife, then it would be construed that assessee has sufficient source of funds because gift from close relative does not fall within the ambit of definition of Section 56(ii) of the Act as deemed gift.
With the above observation, both the orders are set aside and restored back to the file of Assessing Officer.
In the result, the appeal is allowed for statistical purposes.
Order pronounced on 01.09.2025.