Unexplained Source of Investment on 4Kg Gold: ITAT Directs to Consider R. 46 Evidence Citing Improper Rejection [Read Order]
The Tribunal directed the CIT(A) to reconsider evidence submitted under Rule 46 of the Income Tax Rules, 1962, in a case involving unexplained investment in 4 kilograms of gold, criticizing the improper rejection of such evidence.
![Unexplained Source of Investment on 4Kg Gold: ITAT Directs to Consider R. 46 Evidence Citing Improper Rejection [Read Order]](https://images.taxscan.in/h-upload/2025/07/19/2065501-unexplaine-investment-gold-taxscan.webp "Unexplained Source of Investment on 4Kg Gold: ITAT Directs to Consider R. 46 Evidence Citing Improper Rejection [Read Order]")
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) restored the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication and directed proper consideration of evidence submitted under Rule 46 in the case involved an addition for unexplained investment in 4 kilograms of gold under Section 69 of the Income Tax Act, 1961. Anshul Gupta (assessee) filed...
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) restored the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication and directed proper consideration of evidence submitted under Rule 46 in the case involved an addition for unexplained investment in 4 kilograms of gold under Section 69 of the Income Tax Act, 1961.
Anshul Gupta (assessee) filed an income tax return for the Assessment Year (AY) 2013-14. The Assessing Officer (AO) identified an investment in 4 kilograms of gold, which the assessee failed to satisfactorily explain. The AO treated the investment as unexplained under Section 69, adding Rs. 3,56,16,215 to the assessee’s income.
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Aggrieved by the AO’s order, the assessee appealed to the CIT(A). The assessee submitted additional evidence under Rule 46 to substantiate the source of the gold investment. The CIT(A) rejected the evidence without adequate reasoning, upholding the AO’s addition. Aggrieved by the CIT(A)’s order, the assessee appealed to the ITAT.
The two-member bench comprising Sandeep Gosain (Judicial Member) and Prabhash Shankar (Accountant Member), observed that the CIT(A) failed to provide reasons for rejecting the Rule 46 evidence.
The Tribunal noted that Rule 46 allows the submission of additional evidence during appellate proceedings, provided it is relevant and the assessee was not given sufficient opportunity to present it earlier. The bench found the CIT(A)’s rejection arbitrary and not in accordance with the law.
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The Tribunal emphasized that appellate authorities must duly consider Rule 46 evidence before upholding additions. It held that the CIT(A)’s failure to engage with the evidence warranted restoration of the matter for fresh consideration. It also directed the CIT(A) to examine the Rule 46 evidence afresh and pass a reasoned order.
The Tribunal clarified that the restoration should not be construed as an opinion on the merits of the case, and the CIT(A) was at liberty to call for additional documents or issue further directions as deemed fit.
The Tribunal set aside the CIT(A)’s order and restored the matter for de-novo adjudication. The appeal of the assessee was partly allowed for statistical purposes.
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