2023 (5) TMI 57 - AT - Income Tax

Tribunal allows appeal citing inadequate hearing, cash source explanations

Kishoresinh Hemantsinh Chudasama Pipali, Dhandhuka Ahmedabad. Versus The DCIT, Cir. 1 (2) Vadodra.

Kishoresinh Hemantsinh Chudasama Pipali, Dhandhuka Ahmedabad. Versus The DCIT, Cir. 1 (2) Vadodra. - [2023] 103 ITR (Trib) 391 (ITAT [Ahm]) Issues involved:The appeal pertains to addition made to the income of the assessee on account of unexplained cash deposits in the bank amounting to Rs.22,01,000 for the Assessment Year 2017-18.Details of the Judgment:Issue 1: Opportunity of HearingThe assessee contended that he was not offered adequate opportunity of hearing before both the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) due to being misinformed and not well-versed in tax matters. The plea was made to grant another opportunity of hearing to present evidence and explanations for the source of cash deposits. The Tribunal found merit in the assessee's argument, acknowledging the genuine reasons for non-appearance before the authorities. Consequently, the issue was restored back to the AO for fresh consideration after providing a proper opportunity of hearing to the assessee.Issue 2: Merit of the CaseThe assessee explained that the cash deposits in question were from compensation received for land acquisition by the Government, which was withdrawn and redeposited in the bank for future land purchase. Additionally, cash belonging to the assessee's wife was also deposited during the demonetization period. The Tribunal noted the consistent stand of the assessee regarding the source of cash deposits and the genuine reasons for not presenting the case effectively before the authorities. Considering the circumstances, the Tribunal allowed the appeal for statistical purposes and directed the matter to be reconsidered by the AO with proper opportunity for the assessee to substantiate the explanations with evidence.Conclusion:The Tribunal acknowledged the valid reasons for the assessee's inability to effectively present the case before the authorities and granted a further opportunity of hearing for the assessee to explain the source of cash deposits. The appeal was allowed for statistical purposes, and the issue was remanded back to the AO for fresh consideration in accordance with the law. The assessee was directed to cooperate in the proceedings before the lower authorities for the disposal of the case.