The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) held that in the interest of justice and equity an opportunity should be granted to the assessee to prove the source of cash deposits and the matter was restored to the Assessing Officer (AO) for denovo consideration.
The assessee Mr. Anaveer is a proprietor of a gas agency. During the demonetization period, assessee had deposited a sum of Rs.13,85,000/- in Pragati Krishna Gramin Bank, Gulbarga.
For the relevant Assessment Year, the assessee had failed to furnish the return of income within the stipulated time as per notice under Section 142(1) of the Income Tax Act, 1961.
The AO completed the assessment under Sections 144 r.w.s. 142(1) of the income Tax Act, by treating the entire cash deposit of Rs.13,85,000/- as unexplained cash deposit under section 69A of the Income Tax Act.
Aggrieved by the Order of the Assessment, the assessee preferred an appeal before the Commissioner of Income-Tax (Appeals) [CIT(A)], the CIT(A) observed that assessee has failed to discharge his onus in explaining the source of cash deposit, hence an amount of Rs.10,35,000/- was confirmed by the CIT(A).
Aggrieved by the order of the CIT(A), the assessee filed the present appeal before the Tribunal.
The Authorised Representative of the assessee Balram R Rao, reiterated the submissions made before the CIT(A).
The Departmental Representative Ganesh R. Ghale, submitted that the assessee has not furnished necessary evidence as regards the source of cash deposit. Further, it was submitted that no evidence was produced to link the sales of LPG Cylinders with cash deposits, either before the AO or the CIT(A). Therefore, the appeal of the assessee needs to be rejected.
The Single Bench comprising of George George K, Vice President, observed that the assessee neither before the AO nor the CIT(A), has explained the source of cash deposited with the sale proceeds of LPG cylinders.
Hence, in the interest of justice and equity, the Tribunal granted one more opportunity to the assessee to prove the source of cash deposits. Hence, the matter was restored to the AO for denovo consideration.
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