2017 (10) TMI 170 - AT - Income Tax

ITAT remands CIT(A)'s decision on income enhancement and unaccounted cash, stresses legal procedures

Smt. Poonam Gupta And Rajesh Kumar Gupta Versus DCIT, Central Circle-4, New Delhi

The Income Tax Appellate Tribunal (ITAT) remanded the issues back to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication. The ITAT ... Enhancement of the income on account of jewellery weighing 461.046 grams. - Held that:- In the present case, it appears that the ld. CIT(A) added the jewellery valuing ₹ 9,26,702/- which the AO considered as explained but no proper reason has been given by the ld. CIT(A) in support of his action. It is also noticed that the ld. CIT(A) had confirmed the addition of ₹ 34,23,008/- without assigning any cogent reason. We, therefore, deem it appropriate to set aside this issue back to the file of the ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. Addition on account unaccounted cash - Held that:- In the present case, it appears that the explanation of the assessee was that the cash found during the course of search was out of the withdrawals made by him and his wife. In our opinion, the authorities below had not appreciated the facts in right perspective. We, therefore, deem it appropriate to set aside this issue back to the file of the ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. Issues involved:1. Enhancement of income on account of jewellery weighing 461.046 grams.2. Addition of unaccounted cash amounting to &8377; 1,40,000.Issue 1: Enhancement of income on account of jewellery weighing 461.046 gramsThe case involved a search and seizure operation under section 132 of the Income Tax Act, 1961, resulting in the discovery of jewellery valuing &8377; 50,31,008, out of which &8377; 29,68,072 was seized. The assessee explained that the jewellery was received on various occasions and purchased over time. However, the Assessing Officer (AO) added &8377; 41,04,306 as unexplained investment, considering only three purchase bills as reflecting payment details. The Commissioner of Income Tax (Appeals) [CIT(A)] partially allowed relief but included jewellery valuing &8377; 9,26,702 as part of the total amount. The Income Tax Appellate Tribunal (ITAT) found discrepancies in the CIT(A)'s reasoning and remanded the issue back to the CIT(A) for fresh adjudication with proper opportunity for the assessee to be heard.Issue 2: Addition of unaccounted cash amounting to &8377; 1,40,000During the search, cash of &8377; 1,40,000 was found and seized. The AO considered this amount unexplained and added it to the income of the assessee. The assessee claimed the cash was from withdrawals made by family members. The CIT(A) upheld the addition without detailed reasoning. The ITAT observed that the CIT(A) did not consider the explanation provided by the assessee and remanded the issue back for proper adjudication in accordance with the law.In conclusion, the ITAT allowed the appeals of the assessees for statistical purposes, highlighting the need for proper consideration of explanations and adherence to legal procedures in determining additions to income.