ITO Vs Siddharth Suryakant Deshmukh (ITAT Mumbai)
ITAT Mumbai remands ₹3 crore addition case – directs AO to verify FDs, cash & flat investment afresh- Cryptic CIT(A) order set aside- Tribunal stresses on reasoned findings & natural justice Additional bank evidence accepted – ITAT orders fresh inquiry on unexplained deposits
Background
In these cross appeals, Revenue challenged the deletion of addition relating to investment in flat, while Assessee contested the sustenance of additions towards fixed deposits & cash deposits treated as unexplained.
The assessment was completed u/s 144 determining total income of ₹3.08 crore as against returned income of ₹11.46 lakh. Additions made were:
- ₹1,02,58,276/- – unexplained fixed deposits u/s 69;
- ₹46,19,500/- – unexplained cash deposits u/s 69A;
- ₹1,20,31,195/- – unexplained investment in flat u/s 69;
- ₹27,54,302/- – unexplained credit as per Form 26AS.
CIT(A), NFAC, partly allowed the appeal – deleting the addition of ₹1.20 crore (flat investment) but sustaining others. Both parties approached Tribunal.
Assessee’s Contentions
- Fixed deposits were not fresh investments but renewals of old FDs from earlier years; maturity proceeds were used to buy the flat.
- Certificates & statements from banks now obtained showed FDs placed as early as FY 2011–12, continuously renewed till maturity in FY 2016–17.
- Cash deposits represented proceeds from sale of jewellery belonging to his mother, wife, & sister, already offered to tax in the return.
- Assessment was void for want of notice u/s 143(2) after filing return in response to notice u/s 142(1).
Revenue’s Arguments
- Assessee failed to substantiate the source of FDs or cash deposits during assessment.
- CIT(A)’s order deleting the flat investment addition was cryptic & non-speaking, lacking correlation between deposits & property investment.
Tribunal’s Observations
