Kumaravel HUF Vs ITO (ITAT Chennai)
Rule 46A Evidence Cannot Be Made Invisible—CIT(A) Must Examine HUF & Agricultural-Land Documents Before Confirming Section 69A Addition: Chennai ITAT
The Chennai ITAT has held that where an assessee files additional evidence under Rule 46A to prove its HUF status, ownership of agricultural lands & source of cash deposited during demonetisation, the CIT(A) cannot confirm the addition without even recording or dealing with the application.
Finding that the AO had also provided an inadequate effective opportunity during the scrutiny proceedings, the Tribunal restored the addition of ₹14,34,000 made u/s 69A for fresh examination.
The order is a remand & not deletion of the addition. The assessee must now substantiate the source of cash deposits before the AO through reliable evidence.
Facts of the Case
The assessee was an HUF which filed its return for AY 2017-18 on 25.12.2017, declaring taxable income of ₹1,000 & agricultural income of ₹4,69,800.
The return was selected for scrutiny because the assessee had deposited substantial cash during the demonetisation period.
During assessment, the assessee furnished its profit & loss account, balance sheet and certain particulars relating to agricultural income and expenditure.
The AO called upon the assessee to produce evidence concerning the formation of the HUF as well as documents supporting the agricultural income. According to the AO, only part of the required information was furnished.
