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Facts
The assessee is in appeal against the CIT(A)'s order upholding the AO's additions for assessment year 2017-18. The AO made additions based on an ex-parte assessment order under Section 144.
Held
The Tribunal found that both the AO's and CIT(A)'s orders were ex-parte and lacked analytical examination of the major addition concerning loan accounts.
Key Issues
Whether the ex-parte assessment orders by AO and CIT(A) were justified without proper analytical examination of the case, particularly the loan accounts.
Sections Cited
144, 68, 69, 24(b), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI VIKRAM SINGH YADAV
the order of the Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 15.12.2022 passed for assessment year 2017-18. The assessee has taken five grounds of appeal, out of which Ground No. 1 and 5 are general grounds, it does not call for recording of any specific finding.
ITA No.13/CHD/2023 A.Y.2017-18 2
In Ground No.2, the assessee has pleaded that ld. CIT(A) has erred in confirming the addition of Rs.12,60,500/- which was added to the income of the assessee by the AO with the aid of Section 68. According to the assessee, he has an agriculture income of Rs.15 lacs out of that, cash was deposited in bank account. The ld. AO in an ex-parte assessment disbelieved this contention of the assessee and made the addition.
In Ground No.3, grievance of the assessee is that ld. CIT(A) has confirmed the addition made under Section 69 of the Income Tax Act.
In Ground No.4, the grievance of the assessee is that ld. CIT(A) has erred in disallowing of interest expenditure claimed under Section 24(b) of the Income Tax Act.
The brief facts of the case are that assessee has filed his return of income electronically on 30.03.2018 declaring income of Rs.15,11,760/- and agriculture income of Rs.15 lacs. The AO has selected the return for scrutiny assessment and passed an ex-parte assessment order on 18.12.2019. This assessment order has been passed under A.Y.2017-18 3 Section 144 of the Income Tax Act. The ld. AO has determined the total taxable income of the assessee at Rs.1,80,70,700/-. A perusal of the computation of income would reveal that he has made an addition of Rs.12,60,500/- on account of cash deposit by the assessee. He treated this amount as unexplained cash. He, thereafter, made an addition of Rs.1,52,98,046/- under Section 68 of the Income Tax Act.
Being dissatisfied with the assessment order, assessee carried the matter in appeal before the CIT(A), however, ld. CIT(A) has dismissed the appeal for want of prosecution.
With the assistance of ld. Representative, we have gone through the record carefully and found that both the orders are ex-parte orders. The major addition made to the total income of the assessee is Rs.1,52,98,046/-. We find that neither the AO nor the ld. CIT(A) has analytically examined this aspect because this is an opening balance in the loan account which was taken by the assessee in earlier years for making investment in some house property. The assessee has filed copy of his Balance Sheet as on 31.03.2017. He A.Y.2017-18 4 has shown secured loans of Rs.27,09,400/- from Indian Bank Account No.602289006. Thereafter, he has shown Rs.24,44,297/- from Tata Capital Home Loan. He has further shown Tata Capital L.A.P Rs.1,20,48,607/-. The total of all these three would come out roughly Rs.1.72 Cr.
Neither the AO has tried to get it verified from Indian Bank/Tata Capitals nor ld. CIT(A) called for the complete assessment and got it verified. Thus, the finding of the ld. CIT(A) is not in consonance to sub-clause (6) of Section 250 of the Income Tax Act. This clause contemplates that ld. CIT(A) would state the points in dispute and thereafter record his reasons in support of his orders. This exercise has not been made. He simply accepted the finding of the AO. He should have called for the complete accounts of the assessee possessed by the Revenue from where this figure was worked out by the AO for disbelieving the alleged cash credit but nothing has been done. After careful examination of the complete record, we are of the view that all these aspects are to be re-verified at the end of the AO. Therefore, we set aside both the impugned orders and relegate all the issues to the file of AO for fresh examination after providing A.Y.2017-18 5 due opportunity of hearing to the assessee. It is further observed that assessee would file an application to the jurisdictional AO for picking the enquiry and such application be filed within two months from the date of this order.
In the result, appeal is allowed for statistical purposes.
Order pronounced on 17.01.2025.