The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case to the Commissioner of Income Tax (Appeals)[CIT(A)] for fresh adjudication on the Rs. 8.82 lakh Fixed Deposit ( FD ) investment, due to the failure to consider evidence of the source from the Fixed Deposit/Overdraft ( FD/OD ) account.
Kamalbhai Babulal Kahar,appellant-assessee,challenged the addition made to his income on account of unexplained investment in Fixed Deposit Receipts ( FDRs ) amounting to Rs. 8,82,546/-. The authorities found that the assessee had made term deposits on three separate dates totaling Rs. 8,82,546/-, the source of which remained unexplained during the assessment. The details of the FDs were mentioned in the AO’s order.
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The CIT(A) confirmed the addition, as stated in para 7.2 of his order. The CIT(A) noted that the assessee failed to provide details of the sources of the term deposits, which were considered unexplained and added back to the total income. The assessee had argued that the deposits were made from an FD-OD account, but failed to substantiate this claim. As a result, the addition was confirmed under section 69 of the Act.
The assessee’s counsel argued that the CIT(A) erred in stating that the investment from the FD/OD account was not substantiated. He referred to the Paper Book ( PB ), which included the FD/OD account and bank statements clearly showing the investment. The counsel claimed that the CIT(A) had ignored these facts and confirmed the addition based on an incorrect premise.
The Departmental Representative ( DR ) proposed restoring the issue to the CIT(A) for verification of the assessee’s claim, though he acknowledged that the assessee had submitted evidence regarding the source of investment in FDs.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The two member bench comprising T.R.Senthil Kumar ( Judicial Member ) and Annapurna Gupta ( Accountant Member ) after hearing both parties, decided to set aside the addition confirmed by the CIT(A) for fresh adjudication. The assessee had explained the source of the FD investment as being from his FD/OD account and had submitted relevant documents.
However, the CIT(A) failed to consider this evidence and confirmed the addition. The appellate tribunal restored the issue to the CIT(A) for re-evaluation, giving the assessee an opportunity to present his case.
In short, the appeal filed by the assessee was allowed for statistical purposes.
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