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2022 (9) TMI 1020 - Income Tax
Reopening of assessment u/s 147 - Addition u/s 68 - unexplained deposits in bank account - HELD THAT:- This is a case where, although, the assessee did not file any kind of confirmation nor could explain, with evidence, the source of entries appearing in his bank statement, his case requires a sympathetic view. Accordingly, without going into the question of the validity of the reopening or the question of the legality of the impugned addition u/s 68 on peculiar facts of the case, hold that the impugned addition is not sustainable.
While reaching this conclusion, the consideration which has weighed in favour of the assessee is the fact that he is a small time tea and pakoda seller and he could not have been expected to grasp intricacies of Income Tax Law. The deposits in the bank account are also on two dates only, as is evident from the assessment order, and it also lends credence to the version of the assessee that the amount had been deposited with a purpose to deposit the same towards margin money for the auction.
Amounts were also withdrawn immediately within a short period of time in cash, apparently, when the auction did not took place. Next, is the impossibility of obtaining confirmation of Mr. Diwakar Chaurdhary at this stage as he has already passed away.
As reached the conclusion that the assessee’s case deserves that a sympathetic view may be taken - the assessment order was also passed exparte qua the assessee as the assessee had furnished the reply before the wrong AO.
Restoring, the issue back either to the CIT(A) or the AO also would not serve any purpose as Mr. Diwakar Chaudhary, who would have been in a position to confirm the transaction, has already passed away. Therefore, looking into smallness of amount, the status of the assessee as well as the various facts as mentioned in the preceding paragraphs and without going into question of legality of reopening or legality of addition made under section 68, purely on facts, we set aside the order of the Ld. CIT(A) and direct the AO to delete the addition. Appeal of the Assessee is allowed.