Additional evidence in cash deposit disputes may be admitted and verified before additions are finally sustained.

Additional evidence may be admitted at the appellate stage where it goes to the root of the dispute and the Assessing Officer has not examined it earlier, particularly in an ex parte best judgment assessment. Here, evidence offered to explain cash deposits treated as unexplained was accepted because it required verification before a merits decision could be made. The Tribunal therefore protected the revenue's right to test the material and remitted the disputed additions to the Assessing Officer for verification and fresh consideration.

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Issues: (i) Whether additional evidence produced at the appellate stage should be admitted and the disputed additions remitted for verification by the Assessing Officer.

Analysis: The assessee sought admission of additional evidence to explain cash deposits treated as unexplained. The Tribunal noted that the assessment had been completed ex parte under best judgment procedure and that the evidences sought to be relied upon went to the root of the controversy. As the Assessing Officer had not examined those materials, the Tribunal found it to afford the revenue an opportunity to verify and test the claim before adjudication on merits.

Conclusion: The additional evidence was admitted and the matter was remitted to the Assessing Officer for verification and fresh consideration.

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