ITO Vs Ellora Hitech Infra Venture Private Limited (ITAT Mumbai)
No Remand Report No Excuse – Tribunal Criticizes CIT(A)’s Mechanical Deletion- CIT(A) Has Co-terminus Powers – Rs. 2.05 Cr Addition Deleted Without Verification- Must Independently Verify Evidence, Rules ITAT- CIT(A) Cannot Grant Relief Without Verification – ITAT Restores Cash Investment Case
Assessee had filed return declaring income of Rs. 19.45 lakh. During assessment proceedings, it was noticed that Assessee had purchased land worth Rs. 10.28 crore, out of which Rs. 2.57 crore was paid in cash. As Assessee failed to produce the cash book despite specific directions, AO treated Rs. 2.05 crore as unexplained cash investment after adjusting available withdrawals & framed assessment u/s 143(3).
On appeal, Assessee explained that the source of cash was share application money received from one of its directors, Shri Vijay Gajra, & furnished additional evidence before CIT(A). CIT(A) sought a remand report from AO, but no report was furnished despite reminders. Without independently verifying the additional evidence, the CIT(A) deleted the addition & allowed the appeal.
Revenue challenged this, contending that CIT(A) erred in granting relief without examining the source of cash independently. Tribunal observed that both during assessment & appellate proceedings, the issue of source of cash was not properly examined. CIT(A), having co-terminus powers with AO, should have examined the evidence on his own rather than allowing relief merely because no remand report was received.
