Case Law Details
Sunder Lal Vs ITO (ITAT Delhi)
Introduction: The cases of Sunder Lal vs. ITO (ITAT Delhi) for Assessment Years 2011-12 and 2012-13 revolve around issues concerning the deposit of sale consideration into a bank account. These cases highlight the challenges faced due to a lack of effective representation before the lower authorities and the subsequent direction by the Income Tax Appellate Tribunal (ITAT) for re-adjudication.
Assessment Year 2011-12: In the case related to Assessment Year (AY) 2011-12, the assessment was reopened under Section 147 of the Income-tax Act, 1961, and the assessment was framed under Section 144 r.w.s. 147. The reason for reopening was the deposit of cash into the assessee’s bank account. During the assessment process, the Assessing Officer (AO) sought an explanation from the assessee. However, no effective representation was made on behalf of the assessee. Consequently, the entire cash deposit and other receipts were treated as the assessee’s income. The assessee appealed this decision before the Commissioner of Income Tax (Appeals) or CIT(A), who upheld the addition due to the lack of an explanation.
In the appeal to the ITAT, the assessee contended that the deposit in the bank account was from the sale consideration of a piece of land and provided documents, including sale deeds and an affidavit, as evidence. The ITAT found that the CIT(A) had not adequately verified the correctness of the claim and that the assessee had not been given a fair opportunity to present their case. Therefore, the ITAT directed re-adjudication by the Assessing Officer with proper consideration of the evidence provided.
Assessment Year 2012-13: In the case related to AY 2012-13, the AO noticed that the assessee had not filed a return of income based on information about the transfer of a capital asset with a stamp duty value higher than the declared sale value. Consequently, the AO issued a notice under Section 148. The assessee filed the return of income but subsequently faced an addition of Rs. 8,36,000/- for the difference in property value and Rs. 42,854/- in undeclared salary income.
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