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Facts
The assessee is in appeal against the CIT(A)'s order confirming an addition of Rs. 13,70,000/- made on account of cash deposits during demonetization. The assessee claimed the deposits were from a joint account owned by five persons, but the Assessing Officer and CIT(A) rejected this explanation.
Held
The Tribunal found that both the assessment order and the CIT(A)'s order were ex-parte. While acknowledging the assessee's submissions, the Tribunal set aside both orders and restored the issue to the Assessing Officer for fresh verification and re-adjudication, deeming it appropriate to meet the ends of justice.
Key Issues
Whether the CIT(A) erred in confirming the addition of cash deposits made during demonetization without proper verification, despite the assessee providing explanations regarding a joint account.
Sections Cited
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Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
Shri Rajeev Behl, Vs The ITO, 697 ZL, NH-22, Ward – 3, Kalka, Panchkula. Panchkula. "थायी लेखा सं./PAN NO: AASPB8804F अपीलाथ"/Appellant ""यथ"/Respondent Assessee by : None ( Adjournment Application ) Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr.DR Date of Hearing : 16.07.2025 Date of Pronouncement : 29.07.2025 PHYSICAL HEARING O R D E R PER RAJPAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 17.01.2025 passed for assessment year 2017-18.
Though the assessee has taken five grounds of appeal but, the solitary grievance is that ld. CIT (Appeals) has erred in confirming the addition of Rs.13,70,000/-. A.Y.2017-18 2
3. In response to the notice of hearing, no one has come present on behalf of the assessee. With the assistance of ld. DR, we have gone through the record carefully. We find that assessment order as well as order of CIT (Appeals) are ex- parte, though written submissions filed by the assessee have been taken note by the CIT (Appeals). A perusal of the submissions would indicate that AO found cash deposits during demonetization. According to him, the source of that cash deposit is not being explained by the assessee. In the written submission filed before the CIT (Appeals), it has been submitted that Account No. 10234300015090 is a joint account with Parwanoo Urban Co-operative Bank Ltd. owned by five persons, namely; Sandeep, Nitin, Rajeev, Ajay and Ramesh. The total deposits are of Rs.13,50,000/- which have been added in the name of present assessee only. All the joint owners of the account are equally responsible for explaining the source of deposits. The second explanation given by the assessee is that cash withdrawal is much more higher than the deposits in the bank account. This plea of the assessee has been noticed by the ld. CIT (Appeals) but rejected on the ground that assessee failed to submit all the bank statements A.Y.2017-18 3 exhibiting cash withdrawals. The Cash Flow Statement submitted by him does not match with the bank statement demonstrating the available cash with the assessee before re-deposition, therefore, ld. CIT (Appeals) did not accept the explanation of the assessee.
On due consideration of the above facts and circumstances, we deem it appropriate to set aside both the orders and restore this issue to the file of AO for fresh verification and re-adjudication. It will meet the ends of justice. Accordingly, we allow this appeal and set aside both the orders and restore this issue to the file of AO for fresh adjudication.
In the result, appeal is allowed.