Ambasa Babansa Raibagi Vs ITO (ITAT Bangalore)
In the case of Ambasa Babansa Raibagi Vs ITO (ITAT Bangalore), the assessee challenged an order from the CIT(A) confirming an addition of Rs. 25,66,195 under section 69A of the Income Tax Act. The addition was made due to cash deposits in the assessee’s bank account during the demonetisation period, but the assessee did not file the return of income on time. Despite being issued notices under section 142(1) and 144, the assessee failed to substantiate the source of the deposits or provide the required documents. As a result, the assessment was completed based on available material, leading to the addition. The First Appellate Authority (FAA) upheld the assessment, dismissing the assessee’s arguments, which led the assessee to appeal to the Income Tax Appellate Tribunal (ITAT).
The assessee’s key defense was that the cash deposits belonged to a partnership firm and that the PAN was erroneously linked to the bank account. The assessee also pointed out that their association with the partnership firm had ended before the relevant period, as per the deed of partnership. ITAT acknowledged that the PAN of the assessee was linked to the partnership’s bank account during demonetisation, which may have led to the erroneous addition. Additionally, the FAA was criticized for passing a cryptic order without properly considering the submissions of the assessee. In light of these factors, ITAT remitted the matter back to the Assessing Officer (AO) for fresh examination, directing the AO to reconsider the case in a fair and just manner and provide the assessee with a reasonable opportunity to present all necessary documents. The case was allowed for statistical purposes.
