Failure of Lower Authorities to Consider Assessee’s Evidence on Bank Deposits: ITAT Remands Case to CIT(A) [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case to the Commissioner of Income Tax(Appeals) [CIT(A)] for fresh adjudication after finding that the lower authorities failed to adequately consider the evidence provided by the assessee regarding bank deposits.

Faeza Nisarahmed Soniwala,appellant-assessee, appealed against the addition of ₹16,28,500 as unexplained money under Section 69A and the tax calculated for deposits made during the demonetization period.

In the assessment under Section 143(3), the AO added ₹16,28,500, citing the assessee’s failure to provide submissions or substantiate the source of cash deposits with evidence. The addition under Section 69A was upheld by the CIT(A) due to the assessee’s non-compliance with notices during the appeal. Aggrieved, the assessee appealed before the tribunal.

Know How to Investigate Books of Accounts and Other Documents, Click Here

The assessee, a salaried individual, argued that she had withdrawn around ₹12 lakhs in cash from her bank accounts between 2013 and 2016 and provided supporting documents, including bank statements and Form 16, to the authorities. Despite submitting evidence, the authorities made the addition without proper verification. To support her claim, the assessee presented a paper book with 110 pages, showing the deposits were from her salary and savings.

The tribunal reviewed the submissions and orders of the Revenue authorities. The Revenue argued that the addition was made because the assessee failed to provide adequate evidence for the source of the deposits. The assessee, however, claimed to have submitted sufficient evidence, including cash withdrawal details, Form 16, and bank statements, to prove the legitimacy of the deposits, which the Department did not dispute.

Know How to Investigate Books of Accounts and Other Documents, Click Here

The two member bench comprising Suchitra R.Kamble(Judicial Member) and Dr.BRR Kumar(Accountant Member) noted that the Revenue authorities had not fully considered the assessee’s evidence and decided to remand the case to the CIT(A) for a fresh review. The CIT(A) was instructed to issue a new notice to the assessee and adjudicate the matter, ensuring timely compliance and disposal of the case.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates