PER G. PAVAN KUMAR, JUDICIAL MEMBER: The Revenue has filed an appeal against the order of Commissioner of Income Tax (Appeals) - 3, Coimbatore, dated 09.09.2016 passed u/s. 143 and 250 of the Income Tax Act. :-2-: I.T.A. No. 3215/Mds/2016
2. Before we proceeded for hearing there is a delay of 3 days in filing the appeal by the Revenue. The ld. DR filed condonation petition and explained the circumstances for delay which are not deliberate. Further, ld. AR of the assessee has no serious objections for condonation of delay. After hearing the submissions, we are satisfied with the Reasonable cause explained in affidavit for filing the Appeal belatedly. Therefore, the delay is condoned and appeal is admitted.
3. The Revenue has raised the following grounds: 3.1 The Ld. Commissioner of Income Tax (Appeals)-3, has failed to understand the fact that the genuineness of the partition deed itself is not a source for giving an amount of Rs. 1 Crore to assessee during the financial year 2012-13 towards settlement by the family members 3.2 The Ld. Commissioner of Income Tax (Appeals)-3, has failed to note the fact that the assessee has not produced the confirmations from the family members who made settlements among them. 3.3 The Ld. Commissioner of Income Tax (Appeals)-3, has failed to note the fact that the assessee has not produced the details of the income tax assessment of the HUF and also she has not been able :-3-: I.T.A. No. 3215/Mds/2016 to explain the amount of Rs. 1 Crore given to her on partition by her father and brother during the financial year 2012-13 even though she is one of the family members.
4. The Brief facts of the case that the assessee is an individual and engaged in Running school and having income from tuition fees and filed the Return of income for the assessment year 2013-14 electronically on 26.07.2013 declaring total income of Rs. 4,94,880/-. Subsequently, the case was selected for scrutiny and notice u/s. 143(2) and 142(1) of the Act was issued. In compliance to the notice, Ld. AR of the assessee appeared from time to time and filed the Bank Statement, copy of partition deed, copy of income tax return and statement of inflow and outflow of cash. The Ld. AO from the assessment records found that the assessee has credited a sum of Rs. 1 Crore in her cash flow statement as on 31.03.2013 and explained that the sum is received by cheque from her father and brother on settlement of property among the family members as per the conditions of the partition deed. The Ld. AO also verified the revised cash flow statement, Balance sheet filed by the assessee. The Ld. AO called the details of income tax assessment of HUF and confirmation from the assessee father and brother even though the amount paid by cheque. As the assessee has not produced any confirmation irrespective of sufficient time available and income tax asset details of HUF, the Ld. AO treated the sum of Rs. 1 crore as unexplained :-4-: I.T.A. No. 3215/Mds/2016 credit u/s. 68 of the Act and made addition to the returned income and passed order u/s. 143(3) dated 31.03.2016 and assessed the total income of Rs. 1,04,94,880/-. Aggrieved by the order, assessee filed an appeal with the CIT(A). In the appellate proceedings, the Ld. AR argued that the Assessing Officer is not correct in making addition u/s. 68 of the Act in spite of registered partition deed of family arrangement and amount is received as per memorandum of understanding between family members. Whereas, the Ld. CIT(A) considered the submissions of the Ld. AR and the findings of the Assessing Officer is of the opinion that the Ld. AO has not disputed the partition deed but transaction of cheque and required income tax assessment details of HUF. The Ld. CIT(A) is of the opinion that the Genuineness of cheque transaction by the assessee has been proved based on the family partition deed and the Assessing Officer assumed that the HUF is not having adequate funds and same shall be dealt independently in HUF assessment and there is no necessity for addition of unexplained credit u/s. 68 of the Act as the transactions are duly supported with the partition deed and deleted the addition and allowed the appeal.
5. Aggrieved by the order of CIT(A), Revenue filed an appeal before the Tribunal. Before us, the Ld. DR argued that the CIT(A) erred in understanding the facts that the assessee has shown Rs. 1 Crore credit in the financial year2012-13 by cheque transferred by the family members and there :-5-: I.T.A. No. 3215/Mds/2016 is no clarity whether the income tax particulars of HUF are verified by the CIT(A) and whether confirmation of father and brother are filed and in family partition assessee being one of the beneficiary and prayed for set aside of the order of the CIT(A). Contra, the Ld. AR relied on the orders of the CIT(A) and opposed the grounds.
6. We heard the both the parties and perused the material on record. The sole crux of the disputed issue that the CIT(A) has deleted an addition of Rs. 1 Crore unexplained cash u/s. 68 of the Act without considering the fact that the assessee has obtained this money as per the partition deed from the father and brother who have not confirmed the payment to the assessee. The Ld. AR's contention that the partition deed is not disputed by the AO. But in the Assessment proceedings or in Appellate proceedings the assessee could not submit the confirmations of father and brother in respect of Rs. 1 Crore cheques and details of income tax assessment of HUF, which are necessary to substantiate to claim the amount is actually received in family settlement. We are of the view, that the Ld. CIT(A) has relied on family partition deed but there is also necessity to obtain the confirmations as alleged by the Ld. AO. Further, the Ld. CIT(A) has not called for comments or Remand report from the Assessing Officer before disposal of the appeal. :-6-: I.T.A. No. 3215/Mds/2016
7. Considering the Apparent facts and circumstances and material on record, we are of the opinion that the matter has to be examined by the Assessing Officer, as he was deprived of opportunity to verify the facts/material relied by the Ld. CIT(A). In the interest of justice, we remit the disputed issue for limited purpose to the file of Assessing Officer to re- examine the facts and pass the order on merits and it is nevertheless to mention that the assessee should be provided with adequate opportunity of hearing before passing the order.
8. In the result, the Revenue appeal is allowed for statistical purpose. Order pronounced on Wednesday, the 11th day of January, 2017 at Chennai. Sd/- ( ") (CHANDRA POOJARI) $/ACCOUNTANT MEMBER Sd/- (. ) (G. PAVAN KUMAR) ) $/JUDICIAL MEMBER /Chennai, 1/Dated: 11th January, 2017 ' *#34 54/Copy to:
1. Appellant 2. *+&/Respondent 3. 6 ()/CIT(A)
4. 6/CIT 5. 4 *## /DR 6. 9 /GF