Case Law Details
ITO Vs Bhavesh Sureshchandra Shah (ITAT Ahmedabad)
During the assessment proceedings, assessee once appeared before the Assessing Officer and not furnished any details, but only simple letter explaining sufficient cash on hand available in the cash books are deposited in the bank accounts, but no details about the said bank accounts were filed before the A.O. In the absence of the same, the A.O. is not satisfied with the reply filed by the assessee and made the addition of Rs. 2.09 crores as unexplained income u/s. 68 of the Act. The Ld. CIT(A) without calling for a Remand Report from the Assessing Officer, deleted the additions which is against the provisions of law and Rule 46A of the I.T. Rules. Therefore in the Interest of Natural Justice, we deem it fit to set aside the appellate order passed by ld. CIT(A) and remand the matter back to the file of the Assessing Officer to verify the submissions of the assessee with proper records, bank statements and any other relevant evidences. With this observations, the appeal filed by the Revenue is partly allowed for statistical purpose.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal is filed by the Revenue as against the appellate order dated 10.10.2018 passed by the Commissioner of Income Tax (Appeals)-3, Ahmedabad, arising out of the assessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2011-12.
2. The brief facts of the case is that the assessee is an individual who is engaged in trading of cotton bales. For the Assessment Year 2011-12, the assessee filed his original Return of Income on 27.03.2012 admitting total income of Rs.1,54,760/-.
2.1. On verification of the details available in the office of the A.O., it was found that the assessee had deposited cash amount of Rs. 2,09,58,440/- in his bank accounts which is not reflecting in the original Return of Income. Thereafter a notice u/s. 148 dated 31.03.2017 was issued for escapement of income, which was served by Speed Post and personally to the assessee. However, there was no response from the assessee.
2.2. Thereafter a show cause notice dated 24.10.2017 was issued to the assessee to furnish details of cash deposit of Rs. 2.09 crores. In response to the show cause notice, the assessee submitted there was sufficient cash on hand available in cash book, which cash was deposited in the bank accounts. Therefore the entire cash deposit was fully explained and it is out of cash withdrawal from the said bank account. The assessee submitted that Cash Flow Statement of various Bank accounts and requested not to make any additions. The A.O. duly considered the above reply but found not acceptable as the details was furnished insufficient and the assessee failed to submit bank statements and other evidences before the A.O. None appeared before the A.O. and the assessee has submitted his fabricated chemistry of cash deposits but not submitted any supporting documents from which genuineness of cash deposit, transaction proved. Therefore the A.O. added the cash deposit of Rs. 2,09,58,440/- as unexplained cash u/s. 68 of the Act and demanded tax thereon.
3. Aggrieved against the same, the assessee filed an appeal before Ld. CIT(A). The assessee filed a written submission stating that the Assessing Officer passed a high-pitched assessment order. The Assessing Officer also not explained why the assessee’s explanation was not acceptable. The Ld. CIT(A) considered the cash book submitted by the assessee and various entries therein and considering that the assessee is dealing in cash crop, such as cotton, which involves cash payment for purchases largely from local farmers and small agents and considering the compulsions of rural economy has to be kept in mind. The Ld. CIT(A) convinced with the explanation of withdrawal of cash from the bank accounts as found to be justified and thereby deleted the addition made by the A.O. The Ld. CIT(A) has not called for a Remand Report from the Assessing Officer before deleting such addition. However on the ground of reopening of assessment, the Ld. CIT(A) dismissed the grounds of the assessee thereby partly allowed the appeal.
4. Aggrieved against the same, the Revenue is in appeal before us raising the following Grounds of Appeal:
1. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,09,58,920/- made by the assessing officer on account of unexplained cash deposit u/s. 68 of the Act.
2. On the facts and circumstances of the case, Ld. CIT(A) ought to have upheld the order of the Assessing Officer.
3. It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored.
4.1. Today is the 21st time of hearing of the above appeal. Right from the first posting of this appeal, none appeared on behalf of the assessee and no adjournments sought from the assessee’s side, inspite of service of notices to the assessee. This shows that the assessee is not interested in pursuing this Revenue appeal.
4.2. No evidences or Paper Book are filed before us, so with the assistance of Ld. D.R., we are proceedings further with the case. The Ld. D.R. submitted the ld. CIT(A) without giving an opportunity to the Assessing Officer by way of calling for a Remand Report, simply deleted the additions which is violation of Rule 46A of the Rules. Therefore in the Interest of Natural Justice, the matter should be remanded back to the file of the Assessing Officer for proper verification.
5. We have given our thoughtful consideration and perused the materials available on record. During the assessment proceedings, assessee once appeared before the Assessing Officer and not furnished any details, but only simple letter explaining sufficient cash on hand available in the cash books are deposited in the bank accounts, but no details about the said bank accounts were filed before the A.O. In the absence of the same, the A.O. is not satisfied with the reply filed by the assessee and made the addition of Rs. 2.09 crores as unexplained income u/s. 68 of the Act. The Ld. CIT(A) without calling for a Remand Report from the Assessing Officer, deleted the additions which is against the provisions of law and Rule 46A of the I.T. Rules. Therefore in the Interest of Natural Justice, we deem it fit to set aside the appellate order passed by ld. CIT(A) and remand the matter back to the file of the Assessing Officer to verify the submissions of the assessee with proper records, bank statements and any other relevant evidences. With this observations, the appeal filed by the Revenue is partly allowed for statistical purpose.
6. In the result, the appeal filed by the Revenue is partly allowed for statistical purpose.
Order pronounced in the open court on 12 -05-2023
