The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) allowed the assessee to submit a new cash flow statement as evidence and directed the Assessing Officer ( AO ) to reassess the matter concerning Rs. 1.19 crore added as unexplained cash deposits under Section 69A of the Income Tax Act, 1961.
Virtiben Preyashkumar Shah, the assessee, filed an income tax return for the assessment year 2017-18 declaring a total income of Rs. 3,76,740. During the assessment proceedings, the AO made an addition of Rs. 1,19,41,872 to the returned income, treating the cash deposits in the assessee’s bank accounts as unexplained under Section 69A of the Income Tax Act. The AO assessed total income at Rs. 1,23,18,612.
The assessee challenged the addition before the Commissioner of Income Tax (Appeals) [CIT(A)] arguing that the source of the deposits was explained and the addition was unjustified. The CIT(A) upheld AO’s addition stating that the assessee failed to prove the source of the cash deposits.
On appeal before the ITAT, the assessee’s counsel submitted that the orders passed by the lower authorities violated principles of natural justice as the assessee was not provided a proper opportunity to present evidence.
Transform GST Compliance with Expert Drafting Skills – Click here to Register
The assessee’s counsel further submitted that the provisions of Section 69A and the related taxation under Section 115BBE were not invoked in the original assessment order. Even if the addition under Section 69A is upheld, taxation under Section 115BBE is inapplicable in this case.
The assessee’s counsel also submitted a cash flow statement showing cash deposits, withdrawals, and an opening cash balance of Rs. 16,21,126 to support the claims.
The two-member bench comprising Dr. B.R.R. Kumar ( Vice-President ) and Suchitra Kamble ( Judicial Member ) observed that the revenue had not been given an opportunity to examine the evidence submitted by the assessee during the appeal proceedings.
Transform GST Compliance with Expert Drafting Skills – Click here to Register
The tribunal observed that the new evidence was not submitted before the AO. So, the tribunal allowed the evidence and directed to submit it before the AO. The tribunal explained the need for a fair reassessment and directed the AO to issue fresh notice, examine the evidence, and adjudicate the matter afresh. 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
