SMT.SUSHILA SIMHAL,BHOPAL vs. THE ITO 2(1), BHOPAL

Narendra Kumar Simhal HUF Rs. 34,33,317.00 2. Parvati Devi Rs. 1,50,000.00 3. Shanti Devi Agrawal Rs. 90,000.00 Rs. 36,73,317.00 (2) On the facts and circumstances of the case, the Ld. CIT(A) was not justified in upholding that the amount of Rs. 16,75,000/- in cash deposited by the appellant in her saving bank account No. 3060 in the Malviya Nagar Branch of Union Bank of India on different dates was unexplainable and in confirming the addition of Rs. 16,75,000/- towards unexplained credits u/s 68 of the Income-tax Act, 1961.”

The background facts leading to present appeal are such that the assessee filed return of income for AY 2008-09 declaring a total income of Rs. 3,97,000/- but subsequently filed a revised-return declaring a total income of Rs. 4,99,890/-. The case was then selected for scrutiny and the AO ultimately passed order u/s 143(3) after making two additions, namely (i) addition of Rs. 36,73,117/- on account of unexplained unsecured loans taken by assessee and (ii) addition of Rs. 16,75,000/- on account of unexplained deposits in bank a/c. Aggrieved, the assessee carried matter in first-appeal but did not get any success. Now, the assessee has come in next appeal before us.

On hearing learned representatives of both sides and perusal of orders of lower-authorities, it is found that the AO has noted in Para 3.1 & 3.2 of assessment-order that the assessee was asked to furnish details of loans accepted but the assessee did not furnish any information. The AO noted that in absence of any information about the identity, genuineness and creditworthiness, the loans taken during the year are treated as ‘unexplained credit’ and addition made. Same way, in Para No. 4.2 of Smt. Sushila Simhal, Bhopal. AY 2008-09 assessment-order, the AO has noted that the assessee has not furnished any document substantiating the source of deposit in bank a/c, therefore the deposits made in bank a/c are treated as ‘unexplained credit’ and addition made. Thus, the AO has made both additions on the footing that the assessee did not file required information. Further, the CIT(A) has upheld additions basically for the reasoning that the assessee has not filed required information to AO. The CIT(A) has, vide Para 4.1 of his order, also rejected the evidences placed by assessee on the footing that the assessee filed newer evidences before him but did not file any application for admission of new evidences under Rule 46A of Income-tax Rules, 1962.

Contrary to what is mentioned by lower-authorities, Ld. AR pleaded before us that the assessee made submission and filed evidences to AO during assessment-proceeding but, however, the assessee’s submission has not been considered, instead the AO has mentioned that the assessee has not filed evidences. In support of his pleading, Ld. AR referred certain papers filed in paper-book. The AR also pointed out that the assessee categorically informed to CIT(A) during first-appellate proceeding in the letter filed at Page 1-3 of Paper-Book about various evidences having been filed to AO. Due to such insistence of Ld. AR, the bench directed the revenue/respondent to produce assessment-record. In response, following letter of AO is filed by revenue:

On the basis of above letter, Ld. DR representing revenue submitted that the case-record of assessee is not traceable at present. Ld. AR for assessee submitted that the assessee is still ready to file documents to authorities, if an opportunity is given. The issue is deliberated and both sides agreed that it would be most appropriate and fair in such circumstance to re-store this matter to the file of AO so that the assessee can re-submit all details/documents required by AO. Accordingly, we remit this matter back to AO for adjudication afresh after giving necessary hearings to assessee and after considering assessee’s representation. The assessee is directed to ensure proper participation before AO and the AO shall pass order without being influenced by his previous order. Ordered accordingly.

Resultantly, this appeal is allowed for statistical purposes.