2014 (2) TMI 611 - AT - Income Tax

Tribunal remands case for evidence on old car sale & cash credit source

Satpal Singh Chhabra Versus DCIT, Saharanpur

The Tribunal remanded the case back to the Assessing Officer, allowing the assessee an opportunity to present evidence, including an affidavit, to prove ... Addition made u/s 68 of the Act – Unproved sale of car – Held that:- The decision in RANBAXY LABORATORIES LIMITED vs. COMMISSIONER OF INCOME TAX [2011 (6) TMI 4 - DELHI HIGH COURT] followed - no addition could be made in re-assessment if no additions in respect of the grounds on which the proceedings u/s 147 were initiated has been made by the AO - the complete material not being and none having represented the assessee in the appeal proceedings the matter remitted back to the AO - The assessee shall also be at liberty to produce any other evidence to prove sale of car by him to Shri Bhasin – Decided in favour of Assessee. Issues Involved:Appeal against addition of unexplained cash credit in bank account under section 68 of the IT Act for Assessment Year 2007-08.Analysis:1. The appeal was filed by the assessee against the addition of Rs. 80,000 made by the Assessing Officer under section 68 of the IT Act as unexplained cash credit in the bank account. The assessee claimed that the amount was received from the sale of an old car to Shri Bhasin. However, the Assessing Officer found no evidence to support this claim and added the amount to the assessee's income.2. The assessee, before the Ld. CIT (A), contended that the amount received was exempt from tax and was a capital receipt. An affidavit from Shri Bhasin confirming the payment for the sale of the old car was submitted. Despite this, the Ld. CIT (A) upheld the addition, stating that the assessee failed to provide evidence of the sale of the car, and the affidavit was not entertained as no reasonable cause was shown for not submitting it earlier.3. In the absence of representation by the assessee during the appeal proceedings, written submissions were filed raising a legal issue. It was argued that since no additions were made in the completed assessment on the grounds for reopening the assessment, no addition could be made in the reassessment proceedings. The Tribunal allowed this legal plea and remitted the matter back to the Assessing Officer for a decision in accordance with the law, providing the assessee with an opportunity to present evidence, including the affidavit of Shri Bhasin, to prove the sale of the car.4. The Tribunal ordered the remand of the case to the Assessing Officer for further examination and directed the assessee to cooperate in the proceedings. As a result, the assessee's appeal was treated as allowed for statistical purposes, with the decision pronounced on 12.02.2014.