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Facts
The assessee declared a total income and agricultural income. The case was selected for limited scrutiny regarding share capital/capital contribution. The assessee explained a cash contribution of Rs. 3,50,000/- as received from family members, providing affidavits and IT returns. The Assessing Officer added Rs. 13,50,000/-.
Held
The Tribunal noted that the assessee had provided confirmations and IT returns of donors, and the lower authorities failed to verify this evidence. The Tribunal observed that the CIT(A) did not address the assessee's submission that funds were from close family members with capacity to contribute and were used for constructing a nursing home.
Key Issues
Whether the addition of Rs. 13,50,000/- on account of alleged unexplained cash credit was justified, given the evidence of affidavits and IT returns from family members and the explanation of fund utilization for construction.
Sections Cited
143(2), 68, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI NIKHIL CHOUDHARY
PER KUL BHARAT, VICE PRESIDENT.: This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 11.06.2024, pertaining to the assessment year 2017-18. The assessee has raised the following grounds of appeal: -
1. 1. Because CIT(A)/NFAC has erred in law and on facts in dismissing the appeal without properly appreciating the facts of the case.
1. 2. Because CIT(A) has erred in law and on facts in confirming the addition of Rs.13,50,000/- made by AO u/s 68 r.w.s. 115BBE of the Act.
3. Because the case laws cited by CIT(A) are not applicable in law and/or on facts, hence addition confirmed by placing reliance on them is not tenable/justifiable.
Page 2 of 4 4. Because the order appealed against is contrary to law, facts and principes of natural justice.” 2. At the time of hearing, no one attended the proceedings on behalf of the assessee. The appeal was taken up for hearing in the absence of the assessee and is being disposed of on the basis of the material available on records.
The facts giving rise to the present appeal are that the assessee filed his return of income declaring a total income of Rs.54,51,340/- along with agricultural income of Rs.3,50,000/-. Thereafter, the case was selected for limited scrutiny, the reason for such selection being examination of share capital/capital contribution. Accordingly, notice under section 143(2) of the Income Tax Act, 1961 (“Act”, for short) was issued. In response thereto, the Ld. Authorized Representative of the assessee appeared from time to time and furnished the requisite details. During the course of assessment proceedings, the Assessing Officer called upon the assessee to explain the cash capital contribution of Rs.3,50,000/-. The assessee submitted that the said amount was received in cash from his father, mother and wife. In support of the claim, affidavits of the donors were filed along with copies of their income-tax returns. However, the Assessing Officer did not accept the explanation and the evidences furnished by the assessee and proceeded to make an addition of 13,50,000/-. Aggrieved by the said addition, the assessee carried the matter in appeal before the Ld. CIT(A), who confirmed the action of the Assessing Officer without adverting to or examining the evidences filed by the assessee. Now, the assessee is in appeal before this Tribunal.
Page 3 of 4 4. The Ld. Sr. Departmental Representative submitted that, having regard to the facts and circumstances of the case, the lower authorities were justified in making the addition, as the alleged gifts were received in cash. He strongly relied upon the orders of the authorities below.
We have heard the Ld. Sr. Departmental Representative and perused the material available on record. It is an undisputed fact that before the Assessing Officer, the assessee had duly filed confirmations from the donors in the form of affidavits. It is also a matter of record that copies of income-tax returns of the donors were furnished. However, both the authorities below have failed to verify the correctness of the evidences filed by the assessee. Therefore, looking to the totality of the facts, we find that the assessee had filed affidavits in support of his contention that the amount was received from close relatives. The authorities below have not made any adverse comments with regard to the creditworthiness of such close relatives. It is also evident from the impugned order that the Ld. CIT(A) has not adverted to the specific submission of the assessee that the amounts were received from close family members who had the capacity to make such contributions. Further, the assessee has explained that the funds were utilized during the year for construction of a nursing home. In these circumstances, it was incumbent upon the authorities below to verify the correctness of the claim of the assessee by examining the evidences placed on record. In view of the above, we set aside the impugned order and restore the issue to the file of the Ld. CIT(A) with a direction to decide the same afresh on merits after duly considering and verifying the submissions and evidences filed by the assessee, in accordance Page 4 of 4 with law. Grounds raised
in this appeal are allowed for statistical purpose.
6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 23/12/2025.