USHA RANI CHILUVOORI,HYDERABAD vs. INCOME TAX OFFICER, WARD-8(3), HYDERABAD

Brief facts of the case are that the assessee is an individual. She filed her return of income for the assessment year 2017-18 on 03/01/2018 declaring total income of Rs. 4,79,890/- and agricultural income of Rs. 1,50,000/-. The case was selected for scrutiny under CASS to verify the cash deposits. During the course of assessment proceedings, learned Assessing Officer called for the source of the amount deposited Rs. 24,59,500/- into her bank account i.e., with Axis Bank. Since there were no details furnished by the assessee with regard to cash deposits, learned Assessing Officer made an addition of the entire amount towards ‘un- explained money’ under section 69A of the Income Tax Act, 1961 (for short “the Act”) and finalised the assessment under section 143(3) of the Act, by order dated 28/11/2019.

Aggrieved, assessee preferred appeal before the learned CIT(A), who passed an order on 23/01/2024, allowing partial relief of Rs. 14,32,000/- and sustaining the addition of Rs.10,27,500/- , contending that the assessee has not given any details of source of the said amount.

Assessee, therefore, filed this appeal. At the time of hearing, learned AR, appearing on behalf of the assessee submitted the detailed cash flow statement for the assessment year 2017-18, explaining the sources for the said cash deposits made into her bank account. Learned AR explained that out of the total addition of Rs. 24,59,500/-, learned CIT(A) satisfied himself with the sources to the extent of Rs. 14,32,000/-, leaving behind an amount of Rs. 10,27,500/-, which represents the gold loan taken by the assessee for medical purpose, but did not utilise the same due to compelling reasons, and this fact is reflected in the Bank statements. According to the Learned AR the Revenue authorities failed to notice this fact, and finally prayed that the assessee has got a good case to be presented, hence in the interest of justice, given an opportunity, assessee is ready to produce all the evidence/relevant material before the learned Assessing Officer and pursue the case diligently.

While denying the request made on behalf of the assessee, learned DR submitted that the impugned order is a well-reasoned order and the assessee did not produce any material to the contrary to rebut the findings of the learned CIT(A) and, therefore, there are no grounds to interfere with such well-considered order. According to learned DR, if such a request is granted, it would lead to never ending process and contended that in the absence of any evidence what-so-ever, the authorities are justified in making/sustaining the addition made.

On a careful consideration of the matter, I found that after the order of the learned CIT(A), an amount of Rs. 10,27,500/- remains to be explained. In the Bank statement incorporated at page Nos 127-135 of the Paper book, at page No. 130 it could be found that the assessee availed gold loan to the tune of Rs. 10 lakhs on 27-06-2016 and cleared the same on 18/08/2016. Reasons for not utilizing the same are beyond the scope of scrutiny proceedings. Suffice it to say that there is an explanation offered by the assessee to the tune of Rs. 10,17,500/- and genuineness of this transaction, if found to be true and correct, it would obviate the deletion of the balance addition also.

As pointed by the learned AR, verification of this fact would make things clear and it would go to root of the addition. I am, therefore, of the considered opinion that since the disposal of the matter requires verification of the evidences produced by the assessee, while setting aside the impugned order and restoring the appeal to the file of the learned Assessing Officer, I direct the assessee to co-operate with the learned Assessing Officer in getting the matters disposed of on merits, without seeking any adjournments and the learned Assessing Officer to take a fresh look at the matter, after affording a reasonable opportunity of being heard to the assessee. It is made clear that it is the last opportunity to the assessee and no further opportunity will be granted. Grounds of assessee are accordingly treated as allowed for statistical purposes.

In the result, appeal of the assessee is treated as allowed for statistical purposes.