Ramesh R. Havele Vs ITO (ITAT Ahmedabad)
CIT(A) Relied on Suspicion & News Reports – Enhancement Without Hearing: ITAT Pune Sends Rs.6.41 Cr Cash-Deposit Case Back
Assessee, an individual engaged in share trading & portfolio management, filed ROI declaring Rs.17,98,950. AO completed scrutiny u/s 143(3) making an addition of Rs.5,47,51,000 as unexplained cash credit based on large cash deposits, despite Assessee’s explanation that these represented (i) cash from share sales already recorded in books & reflected in P&L, & (ii) cash transfers between bank accounts.
CIT(A), dissatisfied with Assessee’s repeated non-compliance, not only upheld the addition but enhanced it to Rs.6,41,53,960 by relying on suspicion, news reports & allegations of involvement in a Ponzi scheme, without having the benefit of any evidences from Assessee.
Before Tribunal, Assessee requested one more opportunity to produce books of accounts & documentary evidence showing the nature of cash deposits. Tribunal noted that vital records placed in the paper book had never been examined by CIT(A) & that enhancement was made without representation from Assessee.
In the interest of justice, Tribunal set aside the CIT(A)’s order & restored the matter for fresh adjudication, directing CIT(A) to examine the evidence, call for a remand report if necessary, & pass a speaking order u/s 250(6). Assessee was directed to cooperate & avoid unnecessary adjournments. Appeal was allowed for statistical purposes.
