Income Tax Officer vs. Raj Malhotra

Parties Involved

Facts Summary

The assessee filed his return of income declaring total income of Rs.13,81,690/- on 27-09-2016. The case of the assessee was selected for limited scrutiny on the basis of CASS on the reason, whether Deduction claimed on account of business expenses is admissible. The first notice was issued under section 143(2) of the Act on 03-07-2017 and served upon the assessee. The assessee was asked to explain the source of cash deposits, vide notice under section 142(1) but no reply was filed by the assessee. The Assessing Officer passed the assessment under section 144 of the Act because the assessee failed to comply with the terms of a notice issued under section 142(1) of the Act. The Assessing Officer completed the assessment proceedings after making the addition of Rs.3,71,04,500/-. Aggrieved with the additions, the assessee preferred the appeal before the Ld. NFAC, who vide order dated 13-06-2025 allowed the appeal. Aggrieved the order of the Ld. NFAC, the Revenue is in appeal before the Tribunal.…

Legal Issues

• 1. Deletion of addition by Ld. CIT(A) without appreciating the fact that assessee has failed to file classification with documentary evidence.
• 2. Allowing additional evidence when the AO had provided ample opportunities during the course of assessment proceedings.
• 3. Ld. CIT(A) has failed to note that during the course of assessment proceedings assessee failed to justify /establish the relationship link between the business & cash deposits made.
• 4. Decision of Ld. CIT(A), NFAC is not acceptable on merits as the Assessing Officer has correctly made the addition.
• 5. Ld. CIT(A) has erred in appreciating the facts that the assessee has failed to comply with the terms of notices issued by this office and never responded to the communication sent to the assessee in terms of proceedings.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

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