It is incumbent upon CIT(A) to examine the veracity of the statements made in affidavits. Addition u/s 68 for cash deposits in bank restored to CIT(A)
ABCAUS Case Law Citation:
ABCAUS 3225 (2020) (01) ITAT
The Assessing Officer (AO) made ex parte addition representing the cash deposits made in the bank account of the assessee u/s. 68 of the Income Tax Act, 1961 (the Act) in the absence of source explained for the same.
On appeal, the CIT(A) gave only the part relief and confirmed the remaining additions as unexplained.
The assessee challenged the order of the CIT(A) before the Tribunal and submitted that the assessee had filed affidavits from the concerned parties who advanced money to the assessee which was not properly examined by the CIT(A) and he had not verified the contents in the affidavits from the parties.
Therefore, the assessee pleaded that the issue may be remitted to the file of the CIT(A) for fresh consideration.
The Tribunal observed that the assessee had filed affidavit before the CIT(A) stating that he had no taxable income during the relevant assessment year. That the assessment was completed ex parte by the Assessing Officer. In the affidavit filed before the CIT(A), it was stated that none of the notices issued by the Assessing Officer prior to completion of assessment was served on him as he was not in India and the first communication he received from the Income Tax Department was the assessment order and the demand notice forming part of it.
In the affidavit, the assessee had explained the source of the date wise cash credits in his bank accounts. The sources as stated ranged from loan/advances from friends, bank gold loan, gifts received from mother, amount received against agreement for sale, sale of agricultural land.
The assessee had also filed affidavit of his mother stating that gifts were made out of her accumulated balances from pension income as well as income by way of small savings interests collected from local women engaged in fish trading by way of interest on loans given to them.
The Tribunal observed that from the contents in the affidavits, the various parties advanced money to the assessee and the contents therein had not been examined by the CIT(A).
The Tribunal opined that it is incumbent upon the CIT(A) to examine the veracity of the statements made in the affidavits.
Hence, in the interest of justice, the entire issue in dispute was remitted to the file of the CIT(A) for fresh consideration.
It was directed that the CIT(A) shall call for remand report from the Assessing Officer on the issue in dispute and thereafter, the CIT(A) shall give opportunity of hearing to the assessee.
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