ARUNACHALAM SIVAKUMAR,COIMBATORE vs. ITO, NON CORPORATE WARD 2(1), COIMBATORE, COIMBATORE

At the time of hearing, Ld. AR, at the outset, submitted that the first appeal has been dismissed for non-prosecution by applying the decision in CIT Vs. M/s. Multi Plan India Ltd. 38 ITD 320 and there is no adjudication on merit. The Ld. AR pleaded for another opportunity of hearing before lower authorities to substantiate its case. The Ld. Sr. DR drew our attention to para 1.1 of the impugned order and submitted that as many as six notices were sent to assessee which were not complied with by the assessee. Therefore, the Ld. CIT(A) had no option but to confirm the assessment. Having heard rival submissions, the appeal is disposed-off as under.

From the facts, it emerges that assessee’s case was selected for scrutiny to verify large cash deposits made during the year. It transpired that the assessee deposited cash of Rs.19.00 Lacs in Axis bank account in three tranches, details of which has been extracted by the Ld. AO on Page nos. 2 & 3 of the assessment order. Accordingly, the assessee was directed to substantiate the source of the same. Though the assessee furnished certain explanation, it was not found acceptable by Ld. AO in the absence of satisfactory evidences forthcoming from the assessee. Finally, the amount of Rs.19.00 Lacs was added to the income of the assessee u/s. 69A of the Act. The assessee failed to make any representative during first appellate proceedings and accordingly, the assessment was confirmed. Aggrieved, the assessee is in further appeal before us.

From the facts, it emerges that the onus to substantiate the cash deposits was completely on the assessee. However, the assessee failed to substantiate the same. Considering the prayer of Ld. AR as well as keeping in mind the principles of natural justice, the bench deems it fit to provide another opportunity of hearing to the assessee. Accordingly, the impugned order is set aside and the assessment is restored back to the file of the Ld. AO for de-novo assessment with a direction to the assessee to substantiate the source of impugned cash deposits. No other ground has been urged before us.