Case Law Details
Sh. Jagjit Singh S/o Inder Singh Vs ITO (ITAT Amritsar)
Considering the order of the revenue authorities the assessee was not able to submit the confirmation from the sundry debtor, M/s AD Traders. The confirmation is annexed with the paper book of the assessee APB page no. 3. The assessee received SBN during demonetization period on dated 10.11.2016. The amount was deposited in the bank account. The amount was received before the appointed day i.e., dated 31.12.2016. So, the assessee shall not in a violation for receiving SBN as per the Act. In Income tax Act the source was unexplained before the revenue authorities as the evidence was not able to submit before any of the lower authorities by the assessee. Considering the factual matrix here we direct to set aside the matter before the ld.AO for necessary verification denovo. Both the revenue and the counsel of the assessee had not made any objection for remanding back the issue before the ld. AO. Needless to say, that the AO shall provide proper and adequate opportunity of being heard to the assessee in set aside proceedings. The evidence/explanation submitted by assessee in its defence shall be admitted by the AO and adjudicated on merits in accordance with law. We order accordingly. Accordingly, the appeal of the assessee is remanded back to the ld. AO as per above terms.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeal), NFAC, Delhi, [in brevity the ‘CIT (A)’] bearing appeal DIN & Order No.ITBA/NFAC/S/250/2021-22/1032736376(1), date of order 30.04.2021, the order passed u/s 250of the Income Tax Act 1961, [in brevity the Act] for A.Y. 2017-18.The impugned order was emanated from the order of the ld. Income Tax Officer Ward-1,TTN, (in brevity the AO) order passed u/s 144 of the Act date of order 31.12.2019. The assessee took the following grounds which are extracted as below:
“1. That Learned Commissioner of Income Tax (Appeals) has erred in law while confirming the addition of Rs, 3,84,706/- as unexplained income.
2. That Learned Commissioner of Income Tax (Appeals), as well as, Ld. A.O. has erred in law, if the agriculture produce sold before demonetization and part of sale proceeds thereof Rs. 3,84,706/- received after demonetization date is a unexplained income, then it is a bad debt too for the appellant and be allowed/ as well and wrongly blown hot & cold.
3. That the Ld. A.O. has not proved on record , the appellant has taken any other / double benefit of agriculture sale proceeds of Rs. 3,84,706/- received after demonetization date and now liable for addition.
4. That the Ld. A.O. is bound to make correct assessment.
5. That Learned Commissioner of Income Tax ( Appeals) has erred in appreciating that Ld AO passed the Assessment order u/s 144 in haste without giving sufficient and reasonable time to postal department to deliver the reply of commission agent, payee.
Alternative Ground :-
6. That if there is any fault of the appellant for receiving any money after demonetization date then that has nothing to do under Income Tax Act, 1961 and no addition is warranted for the same.
7. The order passed by Learned Commissioner of Income Tax (Appeals) is bad-in-law, as well as, on facts.”
2. Brief fact of the case is that the assessee depositing the cash during the demonetization period from 10.11.2016 amount of Rs.3,84,706/-. The amount was deposited through SBN, Specified Bank Note (in short ‘SBN’). The assessee explained that the cash was received from Sundry Creditors M/s AD Traders, Commission Agent, Mandi Bhagtanwala, Amritsar, the amount was received in SBN. The AO is unable to verify the party M/s AD Traders and the amount was in SBN during demonetization.Accordingly treated it’s as unexplained income of the assessee and added back with the total income. The assessee challenged the order of the ld. AO before the ld. CIT(A). The ld. CIT(A) upheld the order of the ld. AO. Being aggrieved assessee filed an appeal before us.
3. During hearing, the counsel for the assessee placed paper book which is kept in the record. The assessee submitted the confirmation of AD Traders, bank account as proof of deposited amount during demonetization which are in APB page 3 to 4. The ld. Counsel further explained through his written submission that the provision of section 5 of Specified Bank Notes (Cessation of Liability Act, 2017), specified that
“On and from the appointed dayno person shall knowingly or voluntarily hold, transfer or receive any specified bank note. He submitted that the appointed day was fixed as 31.12.2016”
The assessee has received SBN prior 31.12.2016. The assessee respectfully relied on the order of the ITAT, Bangalore, Bench Prathamika Krushi Pattina vs. ITO, ITA No.593/Bang/2021 date of order 01/06/2022.
4. The ld. Sr. DR argued and relied on the order of the ld. CIT(A). The relevant para of the said order is extracted as below:
“During assessment it is undisputed that the impugned amount mentioned above was deposited into the appellant’s bank account in cash. This was claimed by the appellant to have been made by one M/S AD Traders who were commission agents in Mandi Bhagtanwala. When the AO asked for verification of the said deposit and wished to ascertain if the deposits were made in old currency there was no response from the said party. The appellant also did not seek to make any clarifications before the AO. Even during appeal, there is no effort by the appellant to prove the bone fides of this transaction and to provide more details about the specific transaction. All he has stated during appeal is that the cash deposits were made out of cash received from M/S AD Traders. The appellant has not provided any supporting details even though his electronic submissions say he has done so. The only submission made by the appellant is a copy of his bank account for a limited specific period, which itself shows nothing of note. This is after specific requests having been made during appeal proceedings. The only contention of the appellant is his reliance upon the decision of the Apex Court in 30 ITR 181 and 37 ITR 288 through which he wishes to state that since a part of the transaction with AD Traders has been accepted the AO is now legally bound to accept the entire transaction without question. The appellant has obviously not applied the ratio of the decisions correctly. The fact that some transactions were accepted with AD Traders does not preclude the fact that some other transactions could be bogus. The transaction has to be proved with material evidence, which the appellant has not even tried to do. His contention is therefore rejected.”
5. We heard the rival submission and relied on the documents available on the record. Considering the order of the revenue authorities the assessee was not able to submit the confirmation from the sundry debtor, M/s AD Traders. The confirmation is annexed with the paper book of the assessee APB page no. 3. The assessee received SBN during demonetization period on dated 10.11.2016. The amount was deposited in the bank account. The amount was received before the appointed day i.e., dated 31.12.2016. So, the assessee shall not in a violation for receiving SBN as per the Act. In Income tax Act the source was unexplained before the revenue authorities as the evidence was not able to submit before any of the lower authorities by the assessee. Considering the factual matrix here we direct to set aside the matter before the ld.AO for necessary verification denovo. Both the revenue and the counsel of the assessee had not made any objection for remanding back the issue before the ld. AO. Needless to say, that the AO shall provide proper and adequate opportunity of being heard to the assessee in set aside proceedings. The evidence/explanation submitted by assessee in its defence shall be admitted by the AO and adjudicated on merits in accordance with law. We order accordingly. Accordingly, the appeal of the assessee is remanded back to the ld. AO as per above terms.
6. In the result, the appeal of the assessee bearing ITA No. 42/Asr/2021 is allowed for statistical purposes.
Order pronounced in the open court on 08.12.2022
