ITAT Remands Issue for Verification & Directs Assessee to Produce Evidence

The ITAT remanded the issue back to the AO for verification and directed the assessee to produce evidence to substantiate the claim of cash deposits. The ITAT found the assessee's arguments were not presented before lower authorities, allowing the appeal for statistical purposes. The judgment favored the assessee, indicating a partial victory in challenging the addition of Rs. 18,00,000 as cash deposits under section 68 of the Income Tax Act.

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Issues Involved:
- Whether the CIT-A justified in confirming the addition of Rs. 18,00,000 towards cash deposits into bank u/s. 68 of the Act.

Analysis:
The only issue in this case was whether the CIT-A was correct in upholding the addition of Rs. 18,00,000 as cash deposits into the bank account under section 68 of the Income Tax Act. The assessee, an individual, had filed his return of income for the assessment year 2009-10 but failed to comply with notices issued by the Assessing Officer (AO) under sections 143(2) and 142(1) of the Act. The AO found that the assessee had deposited Rs. 18 lakhs in his bank account with Axis Bank Ltd based on information from AIR. Due to non-compliance, the AO added this amount to the total income of the assessee under section 144/143(3) of the Act.

The assessee challenged this addition before the CIT-A but failed to provide any supporting evidence to rebut the AO's addition. The CIT-A, noting the lack of compliance and explanation from the assessee, confirmed the addition under section 68 of the Act. The assessee then argued before the ITAT that the deposits were made by withdrawing from the same bank account and referred to cash flow statements to support this claim. The ITAT observed that the assessee did not respond to the statutory notices or offer any explanation before the AO, and failed to properly prosecute the case before the CIT-A.

Considering the submissions made before it, the ITAT found that the arguments presented by the assessee were not brought before the lower authorities. Therefore, the ITAT remanded the issue back to the AO for verification and directed the assessee to produce any evidence to substantiate the claim. The ITAT allowed the assessee's grounds for statistical purposes and ultimately allowed the appeal of the assessee. The judgment was pronounced on 28/02/2017 by the ITAT Kolkata.

In conclusion, the ITAT decided to remand the issue back to the AO for further verification and directed the assessee to provide evidence to support their claim. The appeal of the assessee was allowed for statistical purposes, indicating a partial victory for the assessee in this case.

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