ITO Vs Ashesh Sidharth Agarwal (ITAT Ahmedabad)
ITAT Ahmedabad held that merely because the books of accounts have been subjected to tax audit under Section 44AB of the Act and the Auditor had certified the books of accounts to be in order, the contention made by the assessee cannot be stated to be full proof.
Facts-
On the basis of AIR information that the appellant has deposited cash amounting to Rs. 5,10,00,700/- in bank accounts, a notice u/s. 143(2) of the Income Tax Act followed by notice under Section 142(1) of the Act alongwith questionnaire was served upon the assessee.
However, no document has been filed by the assessee. In the absence of any detail submitted by the assessee neither capital gain earned by the assessee could be worked out. Having no other alternative, the addition was made by the AO on the basis of the figures furnished by the department as per AIR/CIB, which was, in turn, deleted by the First Appellate Authority. Hence, the instant appeal before us.
Conclusion-
We fail to follow as to whether the CIT(A) can grant relief on the basis of the documents, which has not been verified by the AO neither been placed before the CIT(A) as per the statement made by the appellant in their submissions itself against the remand report filed by the AO.
Now, merely because the books of accounts have been subjected to tax audit under Section 44AB of the Act and the Auditor had certified the books of accounts to be in order, the contention made by the assessee cannot be stated to be full proof. In that view of the matter, we do not find the impugned order deleting addition made by the Ld.AO to be justified.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The instant appeal filed by the Revenue is directed against the order dated 27.02.2018 passed by the Ld. Commissioner of Income Tax (Appeals)-3, Ahmedabad arising out of the order dated 30.03.2015 passed by the Income Tax Officer, Ward-3(3)(1), Ahmedabad, under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) for Assessment Year 201213.
2. The matter relates to deletion of addition of Rs.5,10,00,700/- on account of unexplained cash deposits.
3. On the basis of AIR information that the appellant has deposited cash amounting to Rs.5,10,00,700/- in bank accounts, a notice under Section 143(2) of the Act dated 23.09.2013 followed by notice under Section 142(1) of the Act alongwith questionnaire dated 05.05.2014 was served upon the assessee. It appears that the AIR details consist of 107 entries for deposit of amount into the bank and entry for sale of immovable property whereupon assessee was directed to furnish the details, particularly, in regard to the long term capital gain earned on sale of immovable property situated at Paldi, Ahmedabad, for a consideration of Rs.62,00,000/-. However, no document has been filed by the assessee. On the other hand, AIR details reveals deposit of Rs.5,10,00,70/- in the ICICI Bank and in Sardar Vallabhbhai Sahkari bank Ltd. Further, deposit of Rs.6,13,000/- by the assessee in ING Vaisya Bank Ltd. and Rs.33,19,000/-in Axis Bank also revealed from the said AIR information. In the absence of any detail submitted by the assessee neither capital gain earned by the assessee could be worked out. Having no other alternative, the addition was made by the Ld.AO on the basis of the figures furnished by the department as per AIR/CIB, which was, in turn, deleted by the First Appellate Authority. Hence, the instant appeal before us.
4. During the course of appellate proceedings, the assessee submitted as follows:
“The Appellant carried out the business of trading of fabrics through 3 proprietorship firms namely M/s Innotex Solution, M/s Inspiration & M/s Lotus Trading. The appellant booked loss under three of its concerns, the details of which are as under
