Case Law Details
Sh. Dharampal Tyagi Vs ITO (ITAT Delhi)
In this case the assessee has filed copy of Remand Report on record. The assessee initially submitted reply before the A.O. explaining the source of bank deposits out of advance received from OBC Green Card, receipt from supply of sugar cane to mills, sale of milk, wheat, rice and potato.
However, at the appellate stage the assessee explained that out of total deposits of Rs.13,15,000/- deposited in cash in the bank account, an amount of Rs.12,15,000/- were deposited out of advance money received by assessee against an agreement to sell his agricultural land and remaining cash of Rs.65,000/- was deposited by assessee out of agricultural savings.
Copy of agreement with Shri Bal Kishan and affidavit of assessee were filed in support of the same. The A.O. verified these documents and noted that the claim of assessee is verifiable but assessee has changed his stand during the appellate proceedings. Further assessee did not produce these evidences before the A.O. at the assessment stage, therefore, A.O. pleaded that application for admission of additional evidence may be rejected.
These facts makes it very clear that whatever evidences were filed by assessee at the appellate stage are relevant and goes to the root of the matter and may explain the source of cash deposits in the bank account of assessee. The same requires consideration and examination at the level of Ld.CIT(A). Once the additional evidences have been examined by the A.O. at the appellate stage and A.O. says that the claim of assessee is verifiable would support the claim of assessee that these documents were essential for just decision in the matter.
The Ld.CIT(A) therefore instead of rejecting these additional evidences should have admitted the additional evidences for deciding the appeal on merits. Hon’ble Supreme Court in the case of Tek Ram 262 CTR 118 and Hon’ble P&H High Court in the case of Mukta Metal Works, 336 ITR 555, admitted the additional evidences as being relevant and required to be looked into.
In view of these circumstances, I am of the view that the Ld.CIT(A) should have admitted these additional evidences and decided the appeal of assessee on merits.
FULL TEXT OF THE ITAT JUDGMENT
This appeal by assessee has been directed against the order of Ld. CIT(A), Meerut dated 27.11.2017 for the A.Y. 2009-10.
2. Briefly the facts of the case are that no PAN and ITR has been filed in this case. The case was selected for scrutiny on the basis of AIR Information regarding cash deposits in S.B. account by assessee without quoting PAN numbers in the A.Y. under appeal. The A.O. issued notice u/s 148 of the Income Tax Act, 1961 (the Act) as well as notice u/s 142(1) of the Act. The assessee filed written submissions but no ITR has been filed u/s 148 of the Act. The A.O. noted that as per AIR information, it is confirmed from the copy of bank statement that assessee had deposited cash of Rs.13,15,000/- on 21.07.2008 in his bank account maintained with OBC, Kaland, Meerut. In support of source of cash deposits only general reply was filed stating therein that cash was deposited in the bank account out of collection made from number of sources such as advance from OBC against Green Card, receipts from supply of sugar cane to the mills, and some money was collected out of sale proceeds of milk, sale proceeds of wheat, rice and potato etc. The A.O. noted that reply of the assessee is general and source of cash deposits is not explained with reference to any evidence. Therefore, the A.O. made an addition of Rs.13,15,000/- on account of unexplained cash deposits in the bank account.
3. The assessee challenged the addition before the Ld.CIT(A) and filed submissions and evidences which were remanded to A.O. on the issue of admission of additional evidences. A.O. filed Remand Report on 15.11.2017 on the issue of admissibility of additional evidences and noted that “the assessee had changed his stand and despite giving sufficient opportunity, no documentary evidence is filed, therefore, application for admission of additional evidence under Rule 46A may be rejected”.
4. The Ld.CIT(A) noted that despite giving sufficient opportunities assessee did not produce sufficient evidences before the A.O. Therefore, application under Rule 46A for admission of additional evidence was rejected. The Ld.CIT(A) on merit noted that assessee has now come up with new set of evidences but failed to establish sufficient cause or reasons for admission of the same, therefore, addition on merit was also confirmed.
5. The assessee has challenged the order of ld.CIT(A) for refusing admission of additional evidence under Rule 46A of I.T.Rules.
6. After considering rival submissions, I am of the view that the matter requires reconsideration at the level of Ld.CIT(A). The assessee has filed copy of Remand Report on record. The assessee initially submitted reply before the A.O. explaining the source of bank deposits out of advance received from OBC Green Card, receipt from supply of sugar cane to mills, sale of milk, wheat, rice and potato. However, at the appellate stage the assessee explained that out of total deposits of Rs.13,15,000/- deposited in cash in the bank account, an amount of Rs.12,15,000/- were deposited out of advance money received by assessee against an agreement to sell his agricultural land and remaining cash of Rs.65,000/- was deposited by assessee out of agricultural savings. Copy of agreement with Shri Bal Kishan and affidavit of assessee were filed in support of the same. The A.O. verified these documents and noted that the claim of assessee is verifiable but assessee has changed his stand during the appellate proceedings. Further assessee did not produce these evidences before the A.O. at the assessment stage, therefore, A.O. pleaded that application for admission of additional evidence may be rejected. These facts makes it very clear that whatever evidences were filed by assessee at the appellate stage are relevant and goes to the root of the matter and may explain the source of cash deposits in the bank account of assessee. The same requires consideration and examination at the level of Ld.CIT(A). Once the additional evidences have been examined by the A.O. at the appellate stage and A.O. says that the claim of assessee is verifiable would support the claim of assessee that these documents were essential for just decision in the matter. The Ld.CIT(A) therefore instead of rejecting these additional evidences should have admitted the additional evidences for deciding the appeal on merits. Hon’ble Supreme Court in the case of Tek Ram 262 CTR 118 and Hon’ble P&H High Court in the case of Mukta Metal Works, 336 ITR 555, admitted the additional evidences as being relevant and required to be looked into.
6.1. In view of these circumstances, I am of the view that the Ld.CIT(A) should have admitted these additional evidences and decided the appeal of assessee on merits. In this view of the matter, I set aside the order of Ld.CIT(A) and direct him to admit the additional evidences as above and decide the appeal of assessee on merits, giving reasons of decision on merits in accordance with law by giving reasonable, sufficient opportunity of being heard to assessee.
7. In the result the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court.
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