Loading judgment…
Facts
The assessment was completed under Section 143(3) making an addition of Rs. 18,32,500/- under Section 69A for unexplained cash deposits during demonetisation. The CIT(A) restricted the addition to Rs. 18,00,000/-, holding that the assessee failed to explain the source. The assessee contended the deposit was sale proceeds from her husband's car, which was deposited into her account due to a non-home branch issue, and filed additional evidence before the Tribunal under Rule 29.
Held
The Tribunal admitted the additional evidence filed by the assessee under Rule 46 of the Income Tax Rules. The issue was restored to the Assessing Officer for fresh examination with the additional evidence, after providing the assessee an opportunity of being heard. The appeal was allowed for statistical purposes.
Key Issues
Whether the source of cash deposits during demonetisation, claimed as car sale proceeds, could be substantiated with additional evidence, and if such evidence should be admitted and examined by the Assessing Officer.
Sections Cited
143(3), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH
Before: SHRI K.NARASIMHA CHARY & SHRI BALAKRISHNAN S.
सुिवधई की तधरीख/Date of hearing: 20/02/2025 घोर्णध की तधरीख/Pronouncement on: 04/03/2025 आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 09/10/2024 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), in the case of Jonnalagadda Lakshmi Amruthavalli (“the assessee”) for the assessment year 2017-18, assessee preferred this appeal.
Brief facts of the case are that the assessment in the case of the assessee was completed under section 143(3) of the Income tax Act, 1961 (“the Act”), dated 18/12/2019, by making an addition of Rs.18,32,500/- as unexplained income under section 69A of the Act, in the absence of any evidences explaining the sources for the cash deposits during the demonetisation period.
Against which, the assessee preferred an appeal before the learned CIT(A). Learned CIT(A) restricted the addition made by the Assessing Officer to an extent of Rs.18,00,000/-, holding that the evidences submitted by the assessee do not explain the source of cash deposit of Rs.18,00,000/- made in the bank account on 19/11/2016 and allowed partial relief of Rs.32,500/-, the source being, assessee’s past savings.
Aggrieved by the order of the Learned CIT(A), assessee preferred an appeal before the Tribunal. Learned AR submitted that the assessee’s husband sold his car to Mr.Mahesh Batta and deposited the sale proceeds of Rs.18,00,000/- into assessee’s ICICI Account at Hyderabad, as the branch manager refused to credit these proceeds into her husband’s ICICI Account, Vijayawada due to non-home branch issue. Learned AR further submitted that though the assessee explained the source for the deposit during demonetization period with relevant evidences before the Revenue authorities, the learned CIT(A) is not justified in sustaining the addition of Rs.18,00,000/-.
Assessee filed a petition under Rule 29 of Income Tax Appellate Rules for admission of additional evidence before the Tribunal, consisting of assessee’s bank statement with ICICI Madhapur Branch, copy of confirmation letter from husband, copy of Form 24 under Motor Vehicle Rules, showing the details of the transfer of the car and copies of letters dated 12/12/2018 and 01/03/2018 addressed to the Revenue Authorities, Vijayawada and pleaded to admit the evidences and decide the issue on merits in the interest of justice.
Learned DR submitted that assessee’s request for admission of additional evidence at this stage of proceedings is nothing but an afterthought of the assessee. He, therefore, pleaded to uphold the order passed by the learned CIT(A) and dismiss the appeal of the assessee.
We have heard the rival contentions and perused the material on record in the light of submissions made on either side. It is undisputed fact that the assessee’s husband deposited sale proceeds of his car of Rs.18,00,000/- during the demonetization period into assessee’s ICICI account. Though the assessee could not substantiate sources for the cash deposits during the assessment and appellate proceedings to the satisfaction of the Revenue authorities, she filed a petition for admission of additional evidence, comprising of assessee’s bank statement with ICICI Madhapur Branch, copy of confirmation letter from husband, copy of Form 24 under Motor Vehicle Rules, showing the details of the transfer of the car and copies of letters dated 12/12/2018 and 01/03/2018 addressed to the Revenue Authorities, Vijayawada and pleaded to admit the same for adjudication of appeal as it forms basis for source of cash deposit.
Keeping in view the foregoing facts and circumstances of the case and the principles of natural justice, we admit the additional evidence filed by the assessee as per Rule 46 of the Income Tax Rules and we deem it fit to restore the issue to the file of the learned Assessing Officer for fresh examination of the issue with the additional evidences filed by the assessee, after giving the assessee an opportunity of being heard. We direct the assessee to co-operate with the learned Assessing Officer in getting the matter disposed of on merits, without seeking any adjournment. Grounds are accordingly treated as allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on this the 4th day of March, 2025.