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of <h1>Cash transactions for livestock purchase explained with adequate records defeats Section 69C addition</h1> <h3>Chandra Pal Versus ACIT, Central Circle-11, Noida</h3> Chandra Pal Versus ACIT, Central Circle-11, Noida - TMI Issues involved:1. Addition of Rs. 30,00,000 under section 250 of the Income Tax Act, 1961.2. Alleged investigation carried out without informing the appellant.3. Rejection of explanations and evidences by the LD. CIT(A).4. Sustaining the addition under section 69C without assuming jurisdiction.5. Passing order under section 250 without disposing off objections.6. Justification of the impugned additions.Issue 1: Addition of Rs. 30,00,000 under section 250 of the Income Tax Act, 1961The case involved a search and seizure operation under section 132 of the Income Tax Act, 1961, where the assessee made cash payments totaling Rs. 30 lakhs to an individual in three installments. The Assessing Officer added this amount to the income of the assessee under section 69C as the source of cash remained unexplained. The CIT(A) sustained this addition, stating the explanation provided by the assessee was not supported by independent evidence. However, the Tribunal found that the assessee consistently explained the transactions, supported by evidence, and directed the AO to delete the addition, emphasizing that it was based on suspicion and surmises, lacking legal justification.Issue 2: Alleged investigation carried out without informing the appellantThe appellant contended that investigations by the Income Tax Department were conducted without his knowledge, and no material or outcomes were shared with him. This lack of transparency was raised as a procedural issue, affecting the appellant's ability to confront evidence or provide explanations. However, the Tribunal did not delve deeply into this issue as the focus was primarily on the justification of the additions made by the authorities.Issue 3: Rejection of explanations and evidences by the LD. CIT(A)The LD. CIT(A) rejected the explanations and evidences provided by the appellant, particularly regarding the cash transactions and the source of funds. The appellant argued that the assessment should not be based on assumptions and presumptions, citing legal precedents. However, the LD. CIT(A) upheld the addition, stating that the appellant failed to provide sufficient independent evidence to support the claims. This issue was crucial in determining the validity of the addition made by the authorities.Issue 4: Sustaining the addition under section 69C without assuming jurisdictionThe appellant challenged the jurisdiction of the authorities to sustain the addition under section 69C without proper legal grounds. The argument revolved around the legality and procedural aspects of the addition, questioning whether the authorities had the appropriate jurisdiction to make such an addition. The LD. CIT(A) upheld the addition, leading to the appellant's appeal to the Tribunal for a review of this decision.Issue 5: Passing order under section 250 without disposing off objectionsThe appellant raised concerns about the order passed under section 250 without addressing the objections filed, highlighting a procedural irregularity. This issue focused on the due process followed by the authorities in reaching the decision to add the amount to the appellant's income. The Tribunal did not delve deeply into this issue as the primary focus was on the justification of the additions made by the authorities.Issue 6: Justification of the impugned additionsThe Tribunal analyzed the explanations provided by the appellant, the evidence presented, and the actions of the assessing authorities in making the addition of Rs. 30,00,000 to the appellant's income. It found that the appellant had adequately explained the nature and source of the transactions, supported by documentary evidence. The Tribunal concluded that the addition was unjustified, lacking legal and factual basis, and directed the AO to delete the addition. This issue was central to the final decision of the Tribunal in favor of the appellant.This detailed analysis of the judgment covers all the relevant issues involved in the case, providing a comprehensive understanding of the legal proceedings and the Tribunal's decision.
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