Loading judgment…
Facts
The appellant, an advocate, filed a return for AY 2017-18 declaring Rs. 5.5 lakhs income. The AO completed assessment under Section 143(3), assessing total income at Rs. 42.72 lakhs, including Rs. 36.04 lakhs as unexplained bank credits and Rs. 1.18 lakhs as interest. The CIT(A) partly allowed the appeal, holding that Rs. 24.39 lakhs of the credits were professional receipts taxable under Section 44ADA, reducing the unexplained money to Rs. 25.65 lakhs. The appellant then filed an appeal before the ITAT, seeking to admit additional evidence due to their diagnosis with prostate cancer, contending that the credits were received on behalf of clients.
Held
The Tribunal admitted the additional evidence, finding the reason for non-production before lower authorities valid and the evidence crucial. It remitted the matter back to the Assessing Officer for a de novo assessment, directing the AO to consider the newly admitted evidence after providing the appellant a reasonable opportunity of hearing.
Key Issues
Whether additional evidence should be admitted by the ITAT due to the appellant's illness, and if so, whether the matter of unexplained bank credits and professional receipts under Section 44ADA should be remitted for a de novo assessment.
Sections Cited
143(3), 44ADA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
Assessment Years: 2016-17 Leo Bhagianath .......... Appellant 34/290, Malaparamba, Kozhikode 673009 [PAN: ADTPL7403Q] vs. The Income Tax Officer, Ward-1(2), Kozhikode .......... Respondent Assessee by: Shri Anand Kumar, V.K, Advocate Revenue by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 28.10.2025 Date of Pronouncement: 10.11.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 09.07.2025 for Assessment Year (AY) 2017-18.
Brief facts of the case are that the appellant is an individual deriving income as an Advocate. The return of income for AY 2017- 18 was filed on 21.10.2017 declaring income of Rs. 5,50,000/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward 1(2), Kozhikode (hereinafter called "the AO") vide order dated 04.12.2019 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 42,72,800/-. While doing so, the AO brought to tax the credits in the bank
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order partly allowed the appeal by holding that out of the total cash credits in the bank account of Rs. 50,04,500/- an amount of Rs. 24,39,000/- was declared as professional receipts on which income was offered to tax at 50% of the amount under the provisions of section 44ADA of the Act. Therefore, the CIT(A), held that only the balance amount of Rs. 25,65,500/- should be brought to tax as unexplained money of the appellant.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
The appellant had filed an application seeking admission of additional evidences by stating that these additional evidences could not be produced before the learned lower authorities as the appellant was diagnosed with prostate cancer. It is further submitted that the additional evidences sought to be filed are crucial for adjudication of issues in the appeal. Thus, it is submitted that the additional evidences may be admitted. It is further submitted that the balance of credit does not represent the income as these credits were received on behalf of the clients and no services are rendered by the appellant.
Having considered the rival submissions, I am of the considered opinion that it is a fit case to admit the additional evidences as it goes to the very root of the matter and I am satisfied with the reasons given for non production of the evidences before the learned lower authorities. Accordingly, I admit the additional evidences and remit the matter back to the file of the AO for de novo assessment based on the additional evidences produced after affording reasonable opportunity of hearing the appellant.
In the result, the appeal filed by the assessee stands partly allowed for statistical purposes.
Order pronounced in the open court on 10th November, 2025.