Addition purely based on third-party non-compliance is unwarranted: ITAT Ahemedabad.
ITAT Ahemdabad in the case of Dushyant M. Pandya v. DCIT, deleted an addition of ₹10,00,000 made under Section 69A of the Income Tax Act, 1961, treating cash deposits during demonetization as unexplained. It held that addition purely based on third-party non-compliance is unwarranted
The assessee provided robust evidence, including agricultural income records, land ownership details, and consistent past returns, proving the deposits originated from the sale of agricultural produce.
The AO rejected the claim solely due to the buyer’s non-response to a notice under Section 133(6), despite undisputed agricultural income. The Tribunal held that the burden of further inquiry rested with the AO, not the assessee, and concluded that rejection based on third-party non-compliance was unwarranted.
The Copy Of the order is as under: