Tribunal directs reassessment of travel claim, AO to verify with evidence, appeal allowed.

The Tribunal set aside the matter to the Assessing Officer for re-examination, directing verification of the assessee's claim by conducting necessary inquiries from the travel agent and the bank. The AO must provide the assessee with a reasonable opportunity to substantiate the claim with fresh evidence. The appeal was allowed for statistical purposes, and the general ground was dismissed as not pressed.

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Issues Involved:
1. Sustaining the addition of Rs. 23,13,502/- made by the Assessing Officer.
2. Justification of the CIT(A)'s rejection of the assessee's sworn affidavit.
3. Compliance with the law as laid down by the Hon’ble Supreme Court in CIT vs. P K Noorjahan.
4. General grounds against the order under appeal.

Detailed Analysis:

1. Sustaining the addition of Rs. 23,13,502/- made by the Assessing Officer:
The assessee filed a return of income declaring Rs. 1,59,500/- for Assessment Year 2011-12. During the scrutiny assessment, the Assessing Officer (AO) observed cash deposits of Rs. 45.50 lacs in the assessee's Saving Bank Account. The assessee claimed ignorance about the source of these deposits, attributing them to his friend, a travel agent, who allegedly managed his account to facilitate his visa application to Canada. The AO rejected this explanation, considering it a fabricated story, and added the peak of the cash deposits, Rs. 23,13,052/-, as unexplained income under Section 69 of the Income Tax Act.

2. Justification of the CIT(A)'s rejection of the assessee's sworn affidavit:
The assessee appealed to the CIT(A), submitting an affidavit claiming that his friend managed the bank account. The CIT(A) rejected the affidavit as self-serving and unsubstantiated by corroborative material. The CIT(A) also noted that the assessee did not produce his friend or any supporting statement. Consequently, the CIT(A) upheld the AO's addition of Rs. 23.13 lacs as unexplained income.

3. Compliance with the law as laid down by the Hon’ble Supreme Court in CIT vs. P K Noorjahan:
The assessee's counsel argued that the AO had the discretion not to make an addition under Section 69, citing the Supreme Court's judgment in CIT vs. P K Noorjahan. The Tribunal noted that the prevailing practices in Punjab, where individuals often go to great lengths to facilitate immigration, should have been considered. The Tribunal criticized the CIT(A) for dismissing the affidavit without due consideration and without calling for a remand report to verify the facts from the travel agent and the bank.

4. General grounds against the order under appeal:
The fourth ground of appeal was dismissed as not pressed.

Conclusion:
The Tribunal set aside the matter to the AO for re-examination, directing the AO to verify the assessee's claim by conducting necessary inquiries from the travel agent and the bank. The AO is to provide the assessee with a reasonable opportunity to substantiate his claim with fresh evidence. The appeal was allowed for statistical purposes, and the general ground was dismissed as not pressed. The order was pronounced on 24th December 2021.

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