Hemant Keshavrao Barsagade Vs ITO (ITAT Nagpur)
Cash Withdrawn Earlier Cannot Be Treated as Unexplained Investment Merely Because Assessee Changed His Explanation: ITAT Nagpur
The Nagpur Bench of the Income Tax Appellate Tribunal has held that an investment cannot be treated as unexplained under section 69 where the assessee demonstrates the availability of sufficient cash withdrawn from disclosed bank accounts before making the investment. The Tribunal granted relief notwithstanding the fact that the assessee had initially offered a different explanation regarding the source of the investment.
Consequent to the deletion of the quantum addition, the Tribunal also deleted the penalty imposed under section 271(1)(c).
The decision was rendered in the case of Hemant Keshavrao Barsagade v. ITO, Ward-1, Chandrapur, concerning Assessment Year 2013-14.
Delay of More Than 600 Days Condoned
The assessee filed two appeals before the Tribunal. One appeal challenged the quantum addition, whereas the other challenged the consequential penalty.
There was a delay of 606 days in filing the quantum appeal and 602 days in filing the penalty appeal. The assessee filed applications for condonation of delay supported by affidavits.
After considering the explanation and hearing both sides, the Tribunal found that the delay was neither intentional nor deliberate. Following the liberal approach laid down by the Supreme Court in Collector, Land Acquisition, Anantnag v. Mst. Katiji & Ors. [1987 (2) SCC 107] and Inder Singh v. State of Madhya Pradesh [(2025) INSC 382], the Tribunal condoned the delay in the interest of justice and admitted both appeals for adjudication.
