ITO Vs Pradipbhai Dineshchandra Thakkar (ITAT Ahmedabad)
Rule 46A: CIT(A) Cannot Play a Solo Innings-₹1.01 Crore Addition u/s 69A Restored to AO for Fresh Examination
Background of the Case
The assessee had not filed his return of income for AY 2018-19. He also failed to comply with the statutory notices issued u/s 142(1). Consequently, the AO completed the assessment ex parte u/s 144 r.w.s. 147 of the Income-tax Act, 1961.
During the assessment proceedings, the AO noticed cash deposits aggregating to ₹1,01,67,590 in the assessee’s bank account. Since the assessee neither participated in the proceedings nor furnished any explanation regarding the nature & source of the deposits, the AO treated the entire amount as the assessee’s unexplained money u/s 69A. The statutory provision concerning unexplained money under section 69A was thus invoked in the assessment.
Thus, the absence of an explanation at the assessment stage resulted in the entire cash deposit being brought to tax.
Relief Granted by the CIT(A)
Before the CIT(A), the assessee appeared to have changed course & furnished detailed submissions along with several documents. These included confirmations, copy of the ITR, audit report, profit & loss account, balance sheet, ledger account & bank statements.
The assessee contended that the impugned transactions had already been recorded & reported under another PAN, namely AFLPG5282. On the strength of these documents, the CIT(A) concluded that the assessee had satisfactorily explained both the source of the cash deposits & their recording in the books of account.
