SAKKEENA ABDUL KARIM,KANNUR vs. ITO,WARD-2, KANNUR

Brief facts of the case are that the appellant is an partner of M/s. Swarnanjali Gold, carrying on gold business. No regular return of income under the provisions of section 139(1) of the Income Tax Act, 1961 (the Act) was filed for AY 2011-12. However, the AO issued notice u/s. 148 of the Act based on the information from ADIT (Inv), Kozhikode that the appellant made investments to the extent of Rs. 30,00,000/- in the business of Swarnanjali Gold. The appellant had not complied with the Sakkeena Abdul Karim notice u/s. 148 of the Act. Therefore the Income Tax Officer, Ward-2, Kannur (hereinafter called "the AO") vide order dated 03.12.2018 passed u/s. 143(3) r.w.s. 147 of the Act at a total income of Rs. 30,30,000/-. While doing so, the AO made addition of Rs.30,00,000/- being the investment made with Swarnanjali Gold, Kuttiady rejecting the explanation of the appellant that the said investment was made out of the funds transferred by her husband from NRE account with State Bank of Travancore, Panoor branch on 16.08.2010.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.

Being aggrieved, the appellant is in appeal before the Tribunal in the present appeal.

I heard the rival contentions of both the parties and perused the material available on record. The only issue that arises for my consideration is whether the CIT(A) was justified in sustaining the addition of Rs. 30,00,000/- made by the AO as unexplained investment u/s. 69 of the Act. From the grounds of appeal filed before the CIT(A) it is clear that the appellant had categorically stated that an amount of Rs. 35,00,000/- was received from her husband on 16,08,.2010 from NRE account. This amount was directly transferred from her husband’s account to Swarnanjali Gold and evidence was also filed from the Manager of Swarnanjali Gold, namely Shri Muhees P.K. The CIT(A), without adverting to these ground of appeal, merely dismissed the appeal by holding that the appellant had failed to discharge the onus of proving the source of investment. In the circumstances I am of the considered Sakkeena Abdul Karim opinion that in the interest of justice the matter should be restored to the file of the CIT(A) for de novo disposal in accordance with law after affording reasonable opportunity of hearing to the appellant opportunity of hearing to the appellant. Ordered accordingly.

In the result, the appeal filed by the assessee stands allowed for statistical purposes.