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Facts
The assessee, engaged in trading of jelly sand, cement, and manufacturing bricks, filed a return of income for AY 2014-15. The Assessing Officer (AO) added Rs.2,24,37,380 to the total income as unexplained cash credit, as the assessee could not substantiate the introduction of this capital with documentary evidence.
Held
The First Appellate Authority (FAA) dismissed the assessee's appeal after providing multiple opportunities, as the assessee failed to comply or provide proper evidence. The ITAT noted that while the AO's addition was based on lack of evidence, the FAA also gave ample opportunities that were not utilized by the assessee.
Key Issues
Whether the addition of Rs. 2,24,37,380 as unexplained cash credit is justified, and whether the assessee was provided adequate opportunity to present their case.
Sections Cited
69A
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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI PRAKASH CHAND YADAV
Per Laxmi Prasad Sahu, Accountant Member
This appeal is filed by the assessee against the order dated 22.07.2024 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2014-15.
Briefly stated the facts of the case are that the assessee is engaged in the business of trading of jelly sand and cement, in addition to manufacture of bricks. The assessee filed return of income on 18.10.2014 declaring income of Rs.26,13,110. The case was selected for scrutiny and statutory notices were issued to the assessee. During the course of assessment proceedings, the assessee was asked to explain introduction of capital of Rs.2,24,37,380. The assessee submitted that source of capital is from sundry creditors to whom advances were paid earlier for supply of certain items like jelly sand and advances were returned back. The assessee also produced confirmation from the said creditors. Further the AO noted that these advances are not appearing in the balance sheet. In reply the assessee submitted that introduction of said capital is from his own account and hence it was not reflected in the assets side of balance sheet. The AO noted that there is no evidentiary value to substantiate the claim of assessee. Assessee was given opportunity and for want of explanation with documentary evidence, the said capital of Rs.2,24,37,380 was treated as unexplained cash credit u/s. 69A of the Act and added back into the total income of the assessee. Aggrieved from the above order, the assessee filed appeal before the First Appellate Authority (FAA).
The ld. FAA gave opportunities to the assessee and assessee requested for adjournment. The case was fixed for hearing on 15.7.2024, however there was no compliance from the assessee. Accordingly, the ld. FAA after providing number of opportunities dismissed the appeal of the assessee. Aggrieved, the assessee is in appeal before the ITAT.
The ld. AR reiterated the submissions made before the lower authorities and submitted that during the course of assessment proceedings, the assessee did not get proper opportunity to substantiate his claim and before the FAA the assessee sought adjournment, but the ld. FAA ignoring the request of the assessee dismissed the appeal. He requested that if a chance is given to the assessee, he undertook to respond to the notices and substantiate the case of the assessee with evidence before the lower authorities.
The ld. DR relied on the order of lower authorities and submitted that assessee was provided various opportunities but he was unable to represent his case with credible evidence. He objected to sending back the matter to lower authorities.
Considering rival submissions, we note that the AO has made the addition of Rs.2,24,37,380 towards capital introduction for want of proper evidence. The ld. FAA has given ample opportunities, however there was no compliance from the assessee’s side. Therefore he dismissed the appeal. The ld. AR submitted that the amount contributed is out of his own capital, but this fact has not been verified for want of proper evidence. Considering the prayer of the assessee and in the interest of justice, we remit the issue to the Assessing Officer for fresh consideration and decision as per law, subject to payment of costs of Rs.10,000/- (Rupees Ten Thousand Only). The assessee is directed to file necessary documents that would be essential and required for substantiating his case and for proper adjudication by the revenue authorities. Needless to say that reasonable opportunity of being heard be given to the assessee. The assessee is directed to cooperate with the proceedings and in case of further default, the assessee shall not be entitled to any leniency.
In the result, the appeal by the assessee is allowed for statistical purposes.