The Cochin Bench of Income Tax Appellate Tribunal (ITAT) remanded the matter involving the addition of ₹70.25 lakh as unexplained foreign remittances to the Commissioner of Income Tax (Appeals) [CIT(A)] for de novo disposal.
Nadukkandi Kunhabdulla,appellant-assessee,filed the income tax return for AY 2014-15 on October 30, 2015, declaring an income of Rs. 4,28,640/-. The Assessing Officer (AO) assessed the total income at Rs. 75,59,703/-, adding Rs. 70,25,900/- from foreign remittances in Non-Resident Ordinary (NRO) and Non-Resident External (NRE) accounts. The AO rejected the claim that Rs. 35,73,006/- came from the “Tip Top Boutique” business, Rs. 8,88,655/- from selling a car in Bahrain, and Rs. 27,00,000/- from remittances sent by the assessee’s sons working in Bahrain.
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The assessee, aggrieved, appealed before the CIT(A), who upheld the AO’s decision.Later the assessee appealed before the tribunal.
The assessee’s counsel argued that the CIT(A) upheld the addition without considering the submissions and that the AO had no jurisdiction to question NRE account credits. He maintained that there was no reason to doubt the explained sources and sought a reversal of the CIT(A)’s order.
The Senior revenue counsel relying on the CIT(A)’s order, argued that no interference was needed.
The two member bench comprising Prakash Chand Yadav (Judicial Member) and Inturi Rama Rao (Accountant Member) heard both sides and reviewed the records. The appeal concerned the addition of Rs. 70,25,900/- to the NRE account. The AO rejected the explanation that the amount came from business and car sales and remittances from sons abroad, citing a lack of evidence but not questioning the source itself.
The CIT(A) upheld the addition without independent findings or considering the submissions. Finding the order cryptic and lacking reasoning, the tribunal remanded the case to the CIT(A) for fresh consideration as per the law.
In short,the appeal filed by the assessee was partly allowed.
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