CIT(A) Confirms Addition on unexplained Share Investments due to Lack of Evidence: ITAT Directs Taxpayer to Furnish Proof, Remands Matter [Read Order]

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter concerning the addition of unexplained investments in shares, directing the taxpayer to provide relevant proof to substantiate the sources of investment during reassessment.

Vandana Dipakbhai Parmar, the assessee, did not file her return of income for Assessment Year 2018-19. The assessing officer passed an order on July 22, 2023, under Section 147 read with Section 144C(3) of the Income Tax Act, 1961, determining the assessee's total income at Rs. 18,19,630.

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The assessing officer made additions on account of unexplained investments in immovable property amounting to Rs. 13,17,955 and unexplained investments in shares amounting to Rs. 5,01,672.

The assessee challenged the AO's order before the Commissioner of Income Tax (Appeals) [CIT(A)] providing explanations for the investments. The CIT(A) upheld the AO's order, stating that the assessee failed to substantiate the sources of investment with adequate evidence.

Aggrieved by the Commissioner of Income Tax (Appeals) [CIT(A)] ’s decision, the assessee appealed before the ITAT arguing that she was not given a fair opportunity to present evidence regarding the source of investments. The tribunal observed that the issue of unexplained investments in properties and shares warranted a thorough examination by the assessing officer.

The two-member bench comprising Dr. B.R.R. Kumar ( Vice-President ) and Suchitra Kamble ( Judicial Member ) reviewed the records and observed that the CIT(A) had not received sufficient evidence from the assessee.

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The tribunal directed the assessing officer to provide the assessee with a proper opportunity to file evidence and clarified that the assessing officer may invoke legal powers in case of non-compliance.

The tribunal explained the importance of a fair reassessment allowing the appeal for statistical purposes and remanded the matter to the assessing officer for fresh adjudication. The tribunal directed the assessee to cooperate and avoid unnecessary delays during the proceedings.

To Read the full text of the Order CLICK HERE

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