Individual Fails to Prove Cash Deposits as Land Sale Proceeds by Father: ITAT remits Matter back on Interest of Justice [Read Order]

An ex-parte income tax assessment order was passed, wherein the Assessing Officer (AO) treated the cash deposits as unexplained income on account of the assessee’s failure to respond to multiple notices.

On appeal, the Commissioner of Income Tax (Appeals) [CIT(A)] upheld the AO’s action, observing that the assessee had failed to produce credible documentary evidence to establish that the deposits indeed represented land sale proceeds.

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Since the claim was based solely on cash transactions, and no supporting material was furnished, the CIT(A) dismissed the appeal, holding that the explanation lacked evidentiary backing.

When the matter came before the ITAT, the Tribunal noted that the ex-parte order and the summary dismissal of the appeal by the CIT(A) had deprived the assessee of a meaningful opportunity to substantiate his claim.

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The Tribunal stated that the principles of natural justice needed a fair opportunity to present evidence, even if it acknowledged the assessee's inability to reply to notices. It concluded that the case needed to be reexamined because there was no verbal order confirming the authenticity of the transactions.

Accordingly, the bench of Mahavir Singh (VP) remitted the case back to the file of the CIT(A) with directions to adjudicate the matter afresh, after affording the assessee an opportunity to produce relevant documents and evidence to substantiate the claim of land sale proceeds.

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