The Delhi Bench of the Income Tax Appellate Tribunal (ITAT)has held that addition to a cash deposit is not allowable when additional evidence explaining the source is submitted by the assessee.
Dr BR Ambedkar Jain Kalyan Swayam Sahayata Samiti, the assessee is an Association of Persons (AOP) whose assessment was completed under section 144 read with section 147 of the Income-tax Act, 1961 (‘the Act’). The Assessing Officer found that the assessee had made cash deposits of Rs.20,36,900/- in the bank account and added the amount to income alleging that the assessee did not appear and explain the source of such cash deposits.
On appeal before the Commissioner (Appeals), the assessee submitted that the cash deposited in the bank account was out of cash received from the members of the society and furnished certain additional evidence under Rule 46A of the Act. Commissioner (Appeals) refused to accept the additional evidence and upheld the addition made by the Assessing Officer.
Sh. Rohit Tiwari and Sh. Mohan Kalra, Counsels for the assessee stated that the assessment was completed ex-parte as the authorized representative, who was entrusted by the assessee to represent in the proceeding, did not appear and the assessee did not get any opportunity to explain the source of cash deposits with supporting evidence in assessment proceeding.
A Coram of Shri Saktijit Dey, Judicial Member viewed that the Commissioner (Appeals) refused to accept the additional evidence on the ground that the assessee failed to explain, why the evidence could not be furnished before the Assessing Officer. Sh. Om Parkash, counsel for the respondent relied on the addition made by AO.
It was observed that when the assessee remained unrepresented in the assessment proceeding and the assessment order was passed ex-parte, the assessee could not have produced the evidence before the Assessing Officer. The Tribunal directed the Commissioner (Appeals) to accept the evidence and examined them on its own merits before deciding the issue, as the evidence furnished by the assessee can have a crucial bearing on disputed addition.
The Tribunal restored the issue relating to the disputed addition to the file of the Assessing Officer for examining afresh after considering the evidence furnished by the assessee before the first appellate authority and any other evidence, that the assessee may furnish in course of the proceedings. The appeal was allowed for statistical purposes.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
