Jayapal Deepak Gowda Vs ITO (ITAT Bangalore)
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench, allowed the assessee’s appeal for statistical purposes and remanded the matter to the Jurisdictional Assessing Officer (JAO) for fresh consideration. The case arose from additions made under Section 68 of the Income-tax Act, 1961 in relation to unsecured loans and cash deposits during Assessment Year 2018-19. The Assessing Officer had treated the amounts as unexplained cash credits on the ground that the creditworthiness of the creditors and debtors had not been established.
The Tribunal noted that the assessee had furnished several documents relating to the creditors, including bank statements, ledger accounts, PAN details, and confirmation letters. Prima facie, these documents indicated that the loans had been received from genuine persons, but the lower authorities had not verified the material placed on record. Regarding cash deposits, the assessee explained that the amounts represented collections from dealers arising from cash sales, including GST, in the course of its business as a distributor of ITC products. The assessee also correlated the deposits with supporting sales records.
The Tribunal observed that the authorities had not properly appreciated the documentary evidence before concluding that additions under Section 68 were warranted. It therefore set aside the orders of the lower authorities and restored the matter to the JAO for fresh adjudication after considering the supporting documents. The Tribunal also clarified that the assessee would be at liberty to raise the legal plea regarding non-issuance of notice under Section 143(2) during the remand proceedings.
