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Income Tax Appellate Tribunal, “SMC” – ‘C’ BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI
आदेश /O R D E R
This appeal by the assessee is directed against the order of the Commissioner of Income-tax(Appeals) dated 31.01.2017. 2. The only grievance in this appeal is with regard to addition towards unexplained cash deposits of ₹ 5,55,000/- in the bank account.
- - 2 ITA 1005/Mds/17
The facts of the case are that the assessee has deposited the following amounts in the bank account :
Sl.No. Name of loan Description Amount Cash deposited in lender/cash creditor of loan/cash given Karur Vasya Bank credit Ltd. ₹ 2,00,000 1. D. Ananthan Loan 20/04/2007 ₹ 2,00,000 2. D.Suresh Babu Loan Deposited conso- lidated ₹ 3,00,000 on 16/11/2017 Debt realized ₹ 75,000 3. S.S.Vasan ₹ 25,000 4. Wife Gift ₹ 30,000 5. K. Kadiresan Friend gift 17/12/2007 ₹ 25,000 6. Mother Gift 23/02/2008 ₹ 5,55,000 Total During the course of appellate proceedings, the relevant details furnished by the assessee vide his letter dated 22nd February, 2016, were admitted as additional evidence under Rule 46A by the then CIT(Appeals) and the same were forwarded to the concerned AO, vide letter dated 24.02.2016, for the Remand Report. The AO furnished the Remand Report vide letter dated 22.3.2016. At the outset of the Remand Report, it has been submitted by the AO that during the course of Remand Report Proceeding, she had issued letters to all the loan lenders/donors and also to the assessee calling for the relevant details.
However, as reported by the AO, there was no response either from the assessee or from the loan lenders/donors. Accordingly,
- - 3 ITA 1005/Mds/17 the Remand Report was submitted by the AO on the basis of the materials and details already available on record and the AO reiterated the findings of the original Assessment Officer.
3.1 The Remand Report was confronted to the assessee for his comments. The assessee submitted his reply vide letter dated 18.04.2016 and objected to the observations of the AO in the Remand Report. It was argued that the assessee had appeared before the AO and also the confirmation letters from the loan lenders were submitted to the AO. The assessee also pointed out that the AO had not applied her mind but only for the sake of completing the assessment order and for the remand report, had given vague replies.
3.2 In view of the above, the case was fixed by the CIT(Appeals) for hearing to ascertain the correct and true facts of the case and the ld. AR, Shri Siddharth Mehta attended on 26.12.2016. During the oral hearing, he was asked to produce all the relevant details and evidences to substantiate the genuineness of existence of the loan creditors and their credit worthiness. However, the case was adjourned to 29.12.2016 on - - 4 ITA 1005/Mds/17 the request of the ld. AR. Neither the assessee nor the ld. AR attended the proceedings nor they furnished any relevant details.
Therefore, the CIT(Appeals) observed that the assessee does not have any satisfactory documentary evidences, which could prove the genuineness and credit worthiness of the loan lenders and donors of the gift and the assessee has failed to discharge the onus cast upon him. Further, the CIT(Appeals) observed that the cash loans and cash gifts received by the assessee during the year under consideration are in fact, the assessee’s own undisclosed income deposited in the bank account and the explanation that these cash deposits were received as loan and gifts was an afterthought on the part of the assessee, when the same was detected by the AO. The CIT(Appeals) also observed that the confirmation letters were written on plain papers and not on Indian Non-judicial Paper. Therefore, the CIT(Appeals) confirmed the addition of ₹ 5,55,000/- as unexplained cash credit . Aggrieved, the assessee is in appeal before us.
We have heard both the parties and perused the material on record. Admittedly, in this case the Remand report was - - 5 ITA 1005/Mds/17 called by the Ld.CIT(A) from the ld. Assessing Officer. The AO submitted the Remand report vide letter dated 22.03.2016, which was confronted to the assessee. The assessee vide letter dated 18.04.2016 objected to the observation of the ld. Assessing Officer in his Remand report. It was the argument of the ld.A.R that the assessee filed a confirmation letters from the loan lenders before the ld. Assessing Officer and the AO has not considered the confirmation letter and only for the sake of completion of assessment order and for the Remand report, the AO has given some vague replies and proper opportunity of hearing to the assessee is not given to the assessee. More so, when the case was fixed for hearing on 29.12.2016 before the Ld.CIT(A), either the assessee or the Authorised Representative of assessee has neither appeared nor furnished any documents before the Ld.CIT(A. From that conduct of the assessee, Ld.CIT(A) was of the opinion that the assessee does not have any satisfactory documents/evidences to prove the genuineness and credit worthiness of the loan lenders or donor of the gift. In my opinion, it is appropriate to give one more opportunity of hearing to the assessee to place necessary evidence before the - - 6 ITA 1005/Mds/17 ld. Assessing Officer so as to prove the genuineness of the transactions. Accordingly, this issue is remitted to the file of ld. Assessing Officer for fresh consideration. It needless to say that the assessee has to prove the identity of the parties, capacity of the lenders/donors and genuineness of the transactions. 5. In the result, the appeal of assessee is partly allowed for statistical purposes. Order pronounced on 21st August, 2017 at Chennai.