INCOME TAX ACT, 1961

Section 144

Assessment - Best judgment assessment - CIT(A) refusing to admit additional evidences - Addition relating to bank deposits and interest from banks

Assessee made a cash deposits in banks. AO noticed that the assessee was a director in a company and received remuneration. Besides the above, the assessee declared loss from house property and interest income. Hence, AO asked for explanation from the assessee with regard to the sources of deposits. Since there was no response from assessee, AO completed the assessment under section 144. AO also noticed that assessee had not declared interest income from banks and accordingly assessed the same also. Before CIT(A), assessee furnished certain details relating to bank deposits. Since the explanation was not substantiated, CIT(A) rejected them and refused to admit the additional evidences. Held: AO was constrained to complete the assessment to the best of his judgment under section 144 in view of non-cooperation from assessee's side. As stated assessee was unwell and hence, he did not properly represent the matter before AO. Assessee had furnished evidences before CIT(A) to substantiate cash deposits made into the bank account. Hence, assessee should not be put into difficulties. Further, assessment was completed by AO to the best of his judgment under section 144. Accordingly, additional evidences furnished by assessee should have been admitted by CIT(A) and matter was remanded back to AO for fresh consideration. Since there was failure on the part of assessee to properly represent before the AO, assessee should bear a cost for causing unwarranted inconveniences to the department.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2014-15

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