Reassessment Without Proper Consideration of Evidence: ITAT Restores Rs.15.88 Lakh Addition for Fresh Verification [Read Order]

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) restored a reassessment case to the Assessing Officer (AO) observing that the AO failed to properly consider the documentary evidence furnished by the assessee in relation to cash deposits amounting to Rs. 15.88 lakh.

Amit Hasmukhbhai Shah (assessee), whose case was reopened due to the cash deposit of Rs. 15.88 lakh. The AO sought the assessee to explain the source of cash deposit. The assessee replied that the  deposit was made from the loan from farmers, friends and relatives.

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The AO, during the reassessment proceedings, relied on statements and reports obtained under Sections 131 and 133(6) of the Act. Despite receiving confirmation letters and details of the farmer, the AO held that the assessee failed to prove the creditworthiness of the depositors and made the addition.

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Aggrieved by the AO’s order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)], who upheld the reassessment and the addition on the grounds that supporting documents such as land records proof of agricultural activities, and crop sale receipts were not submitted.

The two-member bench comprising Dr. B.R.R. Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) observed that the assessee had submitted considerable information before AO, which was not considered.

The Tribunal observed that although the assessee had submitted several confirmations, “Gram Namuno,” and even produced one lender for examination, the AO failed to consider the merits of this documentation.

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The CIT(A) dismissed the appeal without appreciating the nature and discussing the merits of information furnished by the assessee. The tribunal observed that in the interest of justice the matter may be restored to the AO.

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The Tribunal restored the matter to the file of the AO with directions to grant the assessee a fresh opportunity of hearing and to re-examine the evidence submitted before passing a reasoned order.

The appeal of the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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