VEE VIJAYALAKSHMI,CHENNAI vs. ACIT, CHENNAI

Facts in brief are that the assessee is an individual and a Director of M/s Infortronics Private Ltd. The assessee has filed return of income for the assessment year under consideration, admitting total income of `14,67,355/-. As per Annual Information Report, the assessee was found to have deposited cash of `25,35,200/- in her Savings Bank Account held with State Bank of Indoor. During the course of assessment proceedings, the assessee was called upon by the Assessing Officer to explain the said cash deposits. Since the assessee had not filed details about her cash deposits, the Assessing Officer treated the cash deposit of `25,35,200/- as unexplained cash credit under Section 68 of the Income-tax Act, 1961 (in short 'the Act') and the same was added to the total income of the assessee.

On being aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). Before the CIT(Appeals), it was submitted that the assessee is a Director of M/s Infortronics Private Limited, which was in financial crunch and was in desperate need of funds. So, as a measure of saving the company, the assessee had given loan to the company. In order to give loan, the assessee had borrowed money from the bank and made monthly EMI payments for the same. It was claimed that all the EMI payments were made after the assessee received money from the company. It was also claimed that cash receipts/deposits to the tune of `25,35,200/- represents the repayment of loan to the Director by the company.

The assessee also filed documentary evidence for the cash deposits and corresponding payments before the CIT(Appeals) and the same was mentioned in page 4 of the CIT(Appeals)’s order.

On being aggrieved, the assessee carried the matter in appeal before us.

When this appeal was called for hearing, the Ld. representative for the assessee submitted that before the Assessing Officer, no details were filed and before the CIT(Appeals), some details were furnished. He submitted that all the details were available with the assessee and he filed those details vide pages 4 to 61 in paper-book and submitted that one more opportunity may be given to the assessee to substantiate her claim.

On the contrary, the Ld. Departmental Representative relied on the orders of the authorities below.

We have heard both sides and perused the records and gone through the orders of the authorities below. The assessee is a Director of M/s Infortronics Pvt. Ltd. and she filed her return of income admitting an income of `14,67,355/-. The Assessing Officer, based on the Annual Information Report, found that the assessee deposited cash of `25,35,200/- in her Savings Bank account held with State Bank of Indoor. When the Assessing Officer asked the assessee to explain the source of deposit, she failed to explain before the A.O. However, before the CIT(Appeals), she explained that the company in which she was a Director, was in a financial crunch and she had borrowed funds from the bank and given to the company. Thereafter, she received the amount from the company. The Ld. representative submitted that the amount of ` 25,35,200/- found by the A.O. as per Annual Information Report, is the repayment of loan made by the company to the assessee. The assessee filed details before the CIT(Appeals). However, the CIT(Appeals) did not accept these details on the ground that no explanation was given before the A.O. Therefore, he confirmed the addition made by the A.O.

Now before us, the assessee has filed all the details in a paper-book containing pages 1 to 61 and prayed for one more opportunity to substantiate her claim before the CIT(Appeals). We find that in the interest of justice, one more opportunity is to be given to the assessee. Therefore, we set aside the orders of the lower authorities and remit the matter back to the A.O. and direct the A.O. to consider the details and explanation filed by the assessee and then decide the issue de novo, in accordance with law.

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