SMT.K.V.NAGAMANI,HASSAN vs. INCOME TAX OFFICER, HASSAN

Date of hearing : 02.03.2017 Date of Pronouncement : 19.05.2017 O R D E R

This appeal is preferred by the assessee against the order of CIT(Appeals) inter alia on the following grounds:-

“1. The order of the learned Commissioner of Income-tax (Appeals) passed under Section 250 of the Act in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. Violation of Principles of Natural Justice. a. The learned lower authorities ought to have provided an opportunity of cross- examining Sri. Appane Gowda on whose statement addition was made in the hands of the Appellant on the facts and circumstances of the case.

4. Addition of Rs.6,65,270/- as unexplained cash credits u/s. 68 of the Act on the facts and circumstances of the case. a. The learned CIT (A) erred in confirming the addition of Rs.6,65,270/- as unexplained cash credits u/s. 68 of the Act on the facts and circumstances of the case. b. The learned CIT (A) failed to appreciate that the Appellant had discharged her primary onus as regards to the nature and source of the credit on the facts and circumstances of the case. c. The learned lower authorities erred in relying on the statement taken on oath from a third party Sri. Appane Gowda and confirming a disallowance of Rs.2,65,521 / - on the facts and circumstances of the case. d. The learned lower authorities erred in not appreciating the confirmation letter in the case of Sri. Mahendra, furnished by the Appellant in discharging her primary onus on the facts and circumstances of the case. e. The learned lower authorities are not justified in stepping in the shoes of a businessman and thereby making a disallowance on pure assumption and surmises on the facts and circumstances of the case.

f. The learned Assessing Authority erred in not appreciating that the books of accounts of the Appellant are correct to her and that the disallowances are not warranted on the facts and circumstances of the case.

6. The Appellant craves leave to add, alter, substitute and delete any or all of the grounds of appeal

urged above.

7. For the above and other grounds to be urged during the hearing of the appeal the Appellant prays that the appeal be allowed in the interest of equity and justice.”

2. Though various grounds are raised, but they all relate to the addition made u/s. 68 of the Act in respect of cash credit of Rs.3,99,750 in the name of Shri Mahendra and Rs.2,65,521 in the name of Shri Appane Gowda. In this regard, the ld. counsel for the assessee has submitted that before the AO assessee has filed the relevant evidence in order to establish that these credits were genuine, but the AO did not accept the contention of the assessee and he treated these cash credits as unexplained and made the addition of the same. The CIT(Appeals) did not examine the evidence filed by the assessee before the AO, but he confirmed the additions having recorded that various opportunities were afforded to the assessee.

3. Aggrieved, the assessee is before the Tribunal with the submission that the CIT(Appeals) has not afforded proper opportunity of being heard to the assessee. The CIT(A) has also not examined the relevant evidence placed before the AO. He has relied upon the assessment order and confirmed the additions. The ld. counsel for the assessee has invited our attention to the assessment order and also the rectification order.

5. Having carefully examined the order of lower authorities in the light of rival submissions, I find that before the AO, assessee has not filed complete evidence to establish the genuineness of the credits. Before the CIT(Appeals), none appeared on behalf of assessee. Though CIT(A) has afforded various opportunities, but he has not discussed the evidence of service of notice of hearing upon the assessee. On a careful perusal of the CIT(A)’s order, I find that the CIT(A) has relied upon the assessment order while confirming the additions without making independent enquiry or examining the evidence filed by the assessee before the AO. In these circumstances, I am of the view that one more opportunity should be afforded to the assessee to explain the genuineness of credits.

Accordingly, I set aside the order of CIT(Appeals) and restore the matter to his file with a direction to readjudicate the issue afresh, after affording opportunity of being heard to the assessee. If need be, CIT(Appeals) may call for a remand report from the AO with regard to any additional evidence filed before him. Accordingly, the order of the CIT(Appeals) is set aside and the matter is restored to the file of CIT(Appeals) for readjudication of the issue afresh.

Pronounced in the open court on this 19th day of May, 2017.