CIT(A) Deleted Unexplained Cash Deposit Additions without AO’s Remand Report: ITAT Remands Matter for Fresh Adjudication [Read Order]
The Tribunal remanded the matter back to the CIT(A) for fresh adjudication in the interest of natural justice
![CIT(A) Deleted Unexplained Cash Deposit Additions without AO’s Remand Report: ITAT Remands Matter for Fresh Adjudication [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/05/ITAT-Unexplained-cash-deposit-addition-ITAT-Ahmedabad-TAXSCAN.jpg "CIT(A) Deleted Unexplained Cash Deposit Additions without AO’s Remand Report: ITAT Remands Matter for Fresh Adjudication [Read Order]")
The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) has remanded the matter to the Commissioner of Income Tax (Appeals) [CIT(A)], who deleted additions without obtaining the remand report from the Assessing Officer ( AO ). Dhaneshbhai Parshottamdas Soni, (assessee) engaged in the business of trading and manufacturing gold, silver, and diamond ornaments, filed his return...
The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) has remanded the matter to the Commissioner of Income Tax (Appeals) [CIT(A)], who deleted additions without obtaining the remand report from the Assessing Officer ( AO ).
Dhaneshbhai Parshottamdas Soni, (assessee) engaged in the business of trading and manufacturing gold, silver, and diamond ornaments, filed his return of income for Assessment Year (AY) 2017–18 declaring an income of Rs. 3.23 crore. The AO noted cash deposits of Rs. 6.31 crore made during the demonetization period using Specified Bank Notes (SBNs).
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The AO rejected the assessee’s books of account and made multiple additions including Rs. 7.76 crore as unexplained cash credit under Section 68, Rs. 45.90 crore as unexplained unsecured loans from 22 parties, Rs. 1.44 crore disallowed as interest on the said loan and Rs. 39.49 lakh as difference in Gross Profit. The AO concluded the total assessed income at Rs. 58.74 crore.
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Aggrieved by the AO’s order, the assessee filed an appeal before the CIT(A). The CIT(A) issued notices to the AO seeking a remand report on 13.01.2023 and sent a reminder on 13.02.2023. The remand report was not received until the order was passed on 24.02.2023.
The CIT(A) deleted all additions citing absence of contrary findings from the AO and relying on case law including Laxmichand Baijnath v. CIT. The CIT(A) found that the cash deposits were recorded in the books and supported by corresponding entries.
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Aggrieved by the CIT(A)’s order, the revenue filed an appeal before the ITAT. The counsel for the revenue argued that the deletions were made without considering the AO’s perspective via a remand report, violating Rule 46A of the Income Tax Rules.
The Counsel also argued that the CIT(A)’s failure to wait for a response from the AO led to an order passed without full appreciation of facts.
On the other hand, the assessee’s counsel argued that Rule 46A does not mandate indefinite waiting for a remand report and also submitted that no fresh evidence was submitted warranting such a delay.
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The two-member bench comprising Annapurna Gupta (Accountant Member) and T.R. Senthil Kumar (Judicial Member) held that the CIT(A) failed to grant the AO a reasonable opportunity to respond, which is essential under Rule 46A(3) of the Income Tax Rules.
The Tribunal remanded the matter back to the CIT(A) to obtain the AO’s remand report and decide the appeal afresh after granting both parties a fair opportunity of being heard. The appeal of the Revenue was allowed for statistical purposes.
To Read the full text of the Order CLICK HERE
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