Case Law Details
Facts of the case
These are the two appeals having the same issues in common. The Assessee is engaged in the business of running tent house and derives business profit, apart from income from property and agricultural income. During the assessment proceedings, AO observed that the amount of Rs.25,73,902 was deposited as cash on various dates in the bank account maintained with Andhra Bank and in the absence of any details and explanations for the sources of cash deposits, AO treated the entire cash deposits as unexplained income of the assessee and passed an ex-parte order u/s 144. Subsequently, a revised remand report was furnished indicating the contents/entries of one more bank account (Vijaya Bank, Sahebnagar Branch) which was not shown to the department. The AO had considered the deposits only in Andhra Bank account and not Vijaya Bank account. It was further pointed out that only before the CIT (A), assessee had mentioned about the Vijaya Bank account and had filed the details of the same.
Question of Law
Whether the Revenue was right in doing the Assessment without taking into consideration all the different bank accounts?
Contentions of the Assessee
Assessee earned income through various sources, such as rents, business receipts and loans etc. In the rejoinder to the remand reports, assessee submitted that during the year an amount of Rs.7,11,026 was earned as commission in real estate business in which the receipts were both in cash and cheques, without assessee involving in the purchase and sale of any property. The ld CIT (A) should have deleted the credits of Rs.8,80,668 with Vijaya Bank instead of directing that amount of Rs.2,46,208 is to be deleted by the AO after verification of the credits. An amount of Rs.25,73,902 which has been deposited on various dates in Andhra Bank account are not taxable amount, because the amount of Rs.25,73,902 is cash on hand as per the books of accounts and includes the income which has been earned for the financial year 2008-09 and earlier years. The assessee also enclosed his cash book and bank statements which indicate that the amount of Rs.25,73,902 is cash rotated through business.
Contention of the Revenue
The CIT(A) remanded the matter and according to the remand report cash deposits were not explainable as there was cash in hand. Also, it was came to known that Assessee maintained one more account in Vijaya Bank which was not shown to the Department. Regarding the rental receipts it was observed by the AO that it was not credited in the Andhra Bank and it was credited in the Vijaya Bank. Also in the remand order it was mentioned that the Assessee was not furnishing the returns of income of the transactions of the Vijaya Bank.
Held by the Tribunal
The Hon’ble Tribunal held that the AO has verified only one account namely Andhra Bank and has passed the assessment order u/s 144 as ex-parte order and also that the assessee has informed about the Vijaya Bank a/c only before the CIT (A) Accordingly, it was held that the matter should be remitted back to the AO to verify the bank accounts. Since the assessee has provided copy of the bank statements with Andhra Bank and Vijaya Bank and Form No.26AS for the A.Y 2009-10 in the paper book, the AO shall verify the same and decide the issue in accordance with law.
