In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) ordered JAO to consider additional documents filed before CIT(A) due to non – verification of gifts that were received from the assessee’s grandmother.
In this case, the assessee is Ravindrabhai Lakshmanrav Mane, who trades shares and makes money from a small business. During the assessment proceedings of the Income tax Returns filed by the assessee, an addition of Rs. 8,60,000/- was made under Section 68 of the Income Tax Act 1961 as unexplained income.
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The assessee appealed before the Commissioner of Income Tax (Appeals) [CIT(A)]. But the additions were confirmed by CIT(A). Thus the assessee approached ITAT for relief.
The assessee contended before ITAT that the CIT(A) had made an error in confirming the additions made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, 1961 of Rs .8,60,000/-, considering the amount as unexplained cash credits, which is actually the gift received by the appellant.
During the appellate proceedings before CIT(A), the appellant produced additional documents such as bank accounts, copies of bills, copies of water charges, and also an affidavit explaining relationship details with Aadhar Card and driving license proofs, etc. However, the above submissions were not considered by CIT(A).
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The bench observed that the assessee had made proper submissions before CIT(A), and the additions of Rs .8,60,000/- were the gifts given to the assessee by his grandmother. The bench further observed that the CIT(A) did not verify the above submissions and did not call for a remand report from the AO.
The bench, Annapurna Gupta (Accountant Member) and T.R. Senthil Kumar (Judicial Member), by upholding the principle of natural justice, directed the Jurisdictional Assessing Officer ( JAO ) to consider the additional documents that were filed before the CIT(A). The JAO was directed to pass an order in accordance with the law and to give the assessee a fair chance to be heard.
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