ITAT Admits Additional Evidence Relating to Unexplained Cash Credits :

Egberts India Private Limited filed its return of income for Assessment Year 2022–23 declaring total income of Rs 5,88,38,660. The AO, through an assessment order dated 25 March 2024 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, determined the assessee’s income at Rs 21,31,16,511.

The AO made an addition of Rs 5,42,87,785 under Section 68 on account of unexplained cash credits and another addition of Rs 10 crore under Section 69 on account of unexplained investments. These additions arose in connection with the purchase of time deposits during the financial year 2021–22 and an increase in share capital. The AO had called upon the assessee to furnish relevant details and supporting documents through notices under Section 142(1) and show-cause notices. However, as the requisite material evidence was not furnished, the AO proceeded with the additions. The CIT(A) subsequently upheld them.

The Tribunal condoned the 87-day delay in filing the appeal after considering the assessee’s affidavit and petition explaining the reasons for the delay. During the proceedings, the assessee sought admission of additional evidence contained in a paper book and requested that the matter be remanded to the AO for fresh consideration. The Revenue raised no objection to the request.

Considering the relevance of the additional documents to the disputed issues concerning the increase in share capital and the purchase of time deposits, the Tribunal held that the evidence was necessary for the fair adjudication of the matter. It accordingly set aside the CIT(A)’s order and remanded the case to the AO for fresh consideration, granting the assessee liberty to furnish any further evidence in support of its claims.