2018 (12) TMI 1377

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....e on ground that in his statement before the Learned Income Tax Officer, WardIII(3), Ludhiana he had admitted that he has not sold any machinery, whereas in the bank statement of assessee deposit of Rs. 4,50,000/- has been narrated/written on account of Sale of Machinery. Therefore, addition of Rs. 4,50,000/- made by the Learner Assessing Officer and sustained by the Learned Commissioner of Income Tax (Appeals)-I, Ludhiana is illegal, unwarranted, uncalled for and may be deleted. 2. That the appellant craves to leave, to add or to amend any ground of appeal before it is finally disposed. 3. Further the assessee filed an application seeking admission of the following additional ground: "1. That the Id. CIT(A)-I, Ludhiana has erred in sustaining the addition of Rs. 450000/- amount deposited in bank account against the sale of machinery, merely on basis of remand report submitted by the Id. assessing officer dated 21.07.2016, whereas the said remand report was never provided to the appellant and thus, the demand has been upheld without any opportunity to the assessee in respect of the remand report, wherein the Id. assessing officer has submitted incomplete and wrong fa....

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....2007-08.The bank vide this office letter dated 24.11.10 was requested to clarify whether any document was furnished by the customer i.e. Sh.Rajan Kumar for the sale of machinery. The bank vide letter dated 16.12.10 has informed that for amount less than 5 lacs the bank request to the customer verbally for source of funds/purpose of withdrawal and whatever customer says the bank captures it in the transaction and no letter was taken for cash deposited on 13.4.07 for Rs. 4,50,000/-." 7. Referring to the above the Ld. counsel for assessee stated that it is evident that the source of the cash deposited in the bank as being from sale of machinery had been duly explained and substantiated also by way of furnishing the bank statement reflecting the purchase of the machinery on 8.5.2006 and 15.5.2006 for Rs. 2,10,000/- and Rs. 2,04,000/- respectively and the sale thereof reflected as such in the bank statement for Rs. 4,50,000/-. The Ld. counsel for assessee stated that as confirmed by the Assessing Officer also the assessee had communicated the source of the cash deposited in the bank on the said date itself to the bank as being from sale of machinery on account of which the said de....

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....ur honor in the appeal of above stated appellant. That a cash flow statement reflecting all the cash withdrawals from and deposits into the bank account is part of the written submissions. Regarding, it is respectfully submitted before your honor that the bank statement is already part of the assessment record. In fact, the assessment order contains addition on basis of cash transactions reflecting in this account. The details of cash transactions were already submitted during the assessment proceedings and have been reproduced in parts by the Id. Assessing Officer in the assessment order. The cash flow statement which is part of the written submissions, is in fact consolidated detail of the cash flow transactions persued during the assessment proceedings and reflecting in the bank statement. Thus, even if cash flow statement is considered as additional evidence, the same be admitted by your honor being details of facts already available on assessment record." 8. The Ld. counsel for assessee further contended that the Assessing Officer in his Remand Report had stated that the additional evidences in the shape of the sale invoice could not be accepted s....

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....or assessee has, we find, duly demonstrated before us that it had never filed an invoice of sale of machinery as a piece of additional evidence before the CIT(Appeals) and its request for admission of additional evidence only pertained to cash flow statement filed before the CIT(Appeals). The said fact is evident from the submissions made before the CIT(Appeals) as reproduced in the CIT(Appeals)'s order at para 2.2 and reproduced above also by us. Therefore, the findings of the Assessing Officer with regard to the admission of the sale invoice as additional evidence was misplaced and incorrect. The CIT(Appeals) in any case should have given an opportunity to the assessee to rebut the same before relying upon the same to refuse to admit it as additional evidence. In view of the above, we allow the additional ground raised by the assessee. Further we find merit in the contention made by the assessee. We agree that the assessee had all along claimed the said cash deposits to be from the sale of machinery so much so that even when the cash was deposited in the bank, the identical fact was conveyed to the bank authority also who have noted the same in the narration made against th....