SHIVA ENTERPRISES,PATNA vs. DEPUTY/ASSISTANT COMMISSIONER, CIRCLE-6, PATNA

ITA 227/PAT/2022Status: DisposedITAT Patna05 June 2023AY 2017-184 pages

AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that neither the Assessing Officer nor the CIT(Appeals) properly analyzed the details submitted by the assessee. The CIT(Appeals) also failed to follow the mandatory procedure under Section 250(6) of the Income Tax Act.

What were the facts?

The assessee, Shiva Enterprises, a motorcycle dealer, deposited a significant cash amount in its bank accounts. The Assessing Officer made an addition for unexplained cash deposits, which was confirmed by the CIT(Appeals) without a detailed adjudication.

What were the issues?

Whether the lower authorities properly adjudicated the issue of unexplained cash deposits after considering the assessee's submissions and whether the CIT(Appeals) followed the prescribed procedure.

Which sections of the Income-tax Act were involved?

Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA-PATNA ‘e-COURT’, KOLKATA

Before: Shri Rajpal Yadav, Vice-(KZ) & Dr. Manish Borad

Per Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax

Assessment Year: 2017-2018 Shiva Enterprises (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 21.06.2022 passed for Assessment Year 2017-18.

The assessee has filed its return of income on 29.11.2017 declaring total income of Rs.46,20,672/-. The case of the assessee was selected for scrutiny assessment. The ld. Assessing Officer found that the assessee has made deposit of Rs.1,21,21,760/- in cash in two Bank accounts maintained of HDFC and ICICI Bank. According to him, the assessee failed to give any plausible explanation. Hence, he made the addition and determined the taxable income of the assessee.

Dissatisfied with this addition, the assessee carried the matter in appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) did not adjudicate the issue on merit, rather he reproduced the assessment order and thereafter observed that the assessee has not filed any reply on its part till date. Hence, he dismissed the appeal and confirmed the addition.

With the assistance of ld. Representatives, we have gone through the record carefully. It has been brought to the notice by the assessee that it is trading of Hero Motorcycle on dealership basis. It has submitted all details regarding purchases and sales of motorcycles and out of the sale proceeds, amount deposited in the Bank

Assessment Year: 2017-2018 Shiva Enterprises but both the authorities have not gone through all these details. Sub-section (6) of section 250 contemplates that ld. CIT would formulate the point in dispute and thereafter record reasons in support of her conclusion on those points, but here the ld. 1st Appellate Authority did not adhere to the mandatory procedure provided in the Income Tax Act. Similar is the position of the ld. Assessing Officer. He has not analysed any details. Considering the above facts, we deem it appropriate to set aside both the orders and restore these issues to the file of ld. Assessing Officer for fresh adjudication. It is needless to say that ld. Assessing Officer shall provide due opportunity of hearing to the assessee and the assessee will be at liberty to submit any details in support of its explanation.

In view of the above, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 05.06.2023.

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