The Assessing Officer (AO) observed that the assessee introduced capital of Rs. 2,86,58,503/- in a proprietorship concern, but could only explain Rs. 2,12,82,797/-, leaving Rs. 73,75,706/- unexplained. The CIT(A) confirmed an addition of Rs. 66,52,706/-.

What were the issues?

The primary issue was the unexplained capital introduced by the assessee in their proprietorship concern and the confirmation of the addition by the lower appellate authority.

Gopal V Goyal vs ACIT | ITAT Mumbai 2019

Q: What did the Tribunal hold?

The Tribunal decided to give the assessee one more opportunity to explain the source of capital introductions. The issue was restored to the file of the AO for fresh adjudication.

Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

Before: SHRI RAJESH KUMAR & SHRI RAM LAL NEGI

For Appellant: Mr. Rashmikant C. Modi, A.R, Ms. Ketki Rajeshirke, A.R

For Respondent: Shri Chaudhary Arunkumar Singh, D.R

Hearing: 25.04.2019Pronounced: 30.04.2019

Per Rajesh Kumar, Accountant Member:

The present appeal has been preferred by the assessee against the order dated 09.05.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2012-13.

The grounds raised

by the assessee are as under: “1. On the facts and circumstances of the Appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in confirming the addition made by the Ld. AO to the extent of Rs. 66,52,7067- being capital introduced in proprietorship concern.

2. The Appellant craves leaves to add, to amend, alter, modify and / or withdraw any or all of the above grounds of appeal, each of which are without prejudice to one another.

2 Mr. Gopal V. Goyal The appellant prays this Hon'ble Tribunal to delete the addition/disallowances made by the Ld. Assessing Officer, which is confirmed by the Ld. Commissioner of Income Tax (Appeals).” 3. The only issue raised in the grounds of appeal is against the confirmation of addition of Rs.66,52,706/- being capital introduced by the assessee in the proprietorship concern.

The facts in brief are that the AO in the assessment proceedings observed that assessee has introduced capital of Rs.2,86,58,503/- out of which the assessee could explain only Rs.2,12,82,797/- and thus the capital to the tune of Rs.73,75,706/- remained unexplained and accordingly added to the income of the assessee.

In the appellate proceedings, the Ld. CIT(A) partly allowed the appeal of the assessee by sustaining the addition to the extent of Rs.66,52,706/- which remained unexplained and which is challenged by the assessee before the Tribunal.

After hearing both the parties and perusing the material on record, we observe that these additions were confirmed by the Ld. CIT(A) when the assessee could not produce source of the capital introductions. The ld AR prayed before us that the assessee has all the evidences to explain the capital introduction and should be given one more chance to file the details qua the capital introduction which was opposed by the Ld. D.R.

After taking into consideration the arguments of the rival parties, we are of the view that it would be in the interest of justice to give one more chance to explain the source of capital introductions to the assessee. Accordingly, we restore the issue

In the result, the appeal of the assessee is allowed for statistical purpose.

Order pronounced in the open court on 30.04.2019.

GOPAL V GOYAL,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, 30(1), MUMBAI

What did the Tribunal hold?

What were the facts?

What were the issues?

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