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आयकर अपील"य अ"धकरण, च"डीगढ़ "यायपीठ “बी” च"डीगढ़, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B, CHANDIGARH "ी एन. के. सैनी, उपा"य" एवं "ी संजय गग", "याय"क सद"य BEFORE: SHRI N.K. SAINI, VICE PRESIDENT AND SHRI SANJAY GARG, JUDICAL MEMBER
आयकर अपील सं./ ITA No.170/Chd/2021 "नधा"रण वष" / Assessment Year : 2017-18
Ravinder Kumar बनाम Income Tax Officer, M/s Ravinder Papita Store Ward-3, Shop No.32, Subzi Mandi, Ambala. Karnal. "थायी लेखा सं./PAN NO: BCRPK3146H
"नधा"रती क" ओर से/Assessee by : Shri Dhruv Goel, CA राज"व क" ओर से/ Revenue by : Shri Ashok Khanna, Addl. CIT
सुनवाई क" तार"ख/Date of Hearing : 23.11.2021 उदघोषणा क" तार"ख/Date of Pronouncement: 07.12.2021 2021 (Hearing Through Video Conferencing) आदेश/Order Per Sanjay Garg, Judicial Member :
The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, (in short referred to as CIT(A) dated 17.03.2021 relating to A.Y. 2017-18 Page 2 of 7
assessment year 2017-18, passed u/s 250(6) of the Income
Tax Act,1961 (hereinafter referred to as “Act”).
The assessee in this appeal has taken following
grounds:
“1. That learned CIT A has erred on facts and in law in confirming the addition of Rs. 5,37,966/- by estimating sales turnover at Rs. 1,44,15,075/- instead of actual sales of Rs. 90,17,838/- and applying net profit rate of 8% on alleged turnover.
That learned CIT A has erred in law and facts in confirming the action of AO in taking total bank deposit at Rs. 1,44,15,075/- and adopting the same as sale turnover.
That learned C1TA has erred in law and facts in confirming the action of AO wherein additions are made without issue of any show cause notice under e Assessment proceedings. 4. `That the learned CIT A has erred in law and facts in completing the appellate proceedings without providing reasonable opportunity of being heard.
That Appellant craves leave to add, alter, amend or to substitute the above grounds of appeal either before or at the time of hearing of case.”
Though the Registry has pointed out that the appeal is time barred by 43 days, however, in view of the decision of the Hon'ble Supreme Court dated 23.09.2021 in MA No.665
of 2021 in SMW(C) No.3 of 2020, the period of filing appeal
during the Covid-19 Pandemic is to be excluded for the purpose of counting the limitation period. In view of this,
the appeal is treated as filed within the limitation period. A.Y. 2017-18 Page 3 of 7
Now coming to the facts of the case, the assessee filed
e-return of income declaring the income of Rs.6,15,140/- as income from ‘business and profession’. This case was selected for limited scrutiny to examine the source of total
cash deposits of Rs.63.43 lacs into the two bank accounts of the assessee maintained in ICICI Bank. The assessee
explained that the total cash deposits were much more i.e.
Rs.1.44 crores as against Rs.63,43 lacs pointed out by the AO. The assessee explained that the assessee was doing the business of sale of fruits more specifically of papaya. It was explained that the assessee used to purchase papaya from farmers and traders and sell the same to the local traders of Ambala, Shahbad, Barara and other nearby areas. The assessee enclosed his bank account statement and gave
detailed explanation of the cash deposits alongwith cash
book, etc.. However, the Ld. AO estimated the income of the assessee @ 8% of total cash deposited in the bank account
at Rs.11.53 lacs. The AO further noted that the assessee has also shown profits @ 8% on the total turnover of Rs.90.17
lacs at Rs.6.15 lacs. The AO added the remaining amount of Rs.5.37 lacs into the income of the assessee.
The Ld.CIT(A) confirmed the addition so made by the AO. A.Y. 2017-18 Page 4 of 7
Before us, the Ld.Counsel for the assessee has submitted that the assessee had given the details of cash
deposits and had also explained that some of the cash
deposited was out of the withdrawals made by the assessee
from the bank account. The Ld.Counsel for the assessee
invited our attention to page 3 of the Paper Book to submit
that a detailed reply was furnished by the assessee to the AO. A perusal of the aforesaid reply dated 17.12.2019
reveals that the assessee had not only furnished the copy of bank account statement for the financial year under consideration but had also given a chart explaining the details of the cash deposited which included the amount
received from suppliers and debtors and also out of the cash
withdrawn from the bank apart from opening cash, etc. The AO has also mentioned in para 4 of the assessment order
that the assessee had also furnished cash book with the AO.
However, a perusal of the assessment order reveals that though the AO has mentioned in para 4 of the assessment
order that the assessee has filed reply alongwith the cash
book, however the AO has not discussed a single word about
the reply and cash book filed by the assessee. The AO
simply took the entire deposits of Rs.1.44 crores as sale of the assessee and estimated the profits @ 8%, whereas, the assessee had duly explained that his sale turnover was A.Y. 2017-18 Page 5 of 7
Rs.90.17 lacs and that the remaining amount was deposited
out of the cash withdrawn from the bank by the assessee.
The assessee, in our view, had given a fair picture of his
accounts to the AO. The AO had information only of cash
deposited of Rs.63.43 lacs, whereas, the assessee came with the actual figure of Rs.1.44 cores and explained about the source of deposits. However, the AO by way of a cryptic
order brushed aside the all submissions made by the assessee without any discussion and simply made the impugned addition, which in our view, is not sustainable in the eyes of law. The Ld.Counsel for the assessee, in this respect, has relied upon the order of the Hon'ble
Juri ictional Punjab & Haryana High Court in the case of dated 07.02.2011 wherein the Hon'ble High Court under somewhat similar circumstances has upheld the order of the Tribunal setting aside the addition made by the AO of somewhat similar nature. The relevant para of the order of the Hon'ble High Court (supra) is reproduced hereunder:
“4. During hearing of this appeal, it was pleaded by the learned counsel for the assessee that each and every entry was duly explained to the Assessing Officer by giving its narration and complete cash book was produced. This factual matrix was not controverted by the Revenue. Even the assessee vide her letter dated 24 12.2007 explained her position. As far as the contention of the learned DR that the assessee made frequent A.Y. 2017-18 Page 6 of 7
withdrawals/ deposits in the respective accounts, we are of the view that there is no bar in depositing or withdrawing the amounts unless and until some foul play is brought on record. Even if, the argument of the assessee that the amounts were deposited/withdrawn, as the assessee wanted to purchase a residential property is not accepted, still there is no bar. Even in the impugned order, the stand of the assessee was not found convincing in the fight of the decision in the case of Sumiti Dayal, we are of the view that the ratio of preponderance of human probability is applicable to both sides. The paper book filed by the assessee (running into 59 pages) contains cash book for financial year 2004-05, bank statement of Indusfnd Bank In the absence of any specific defect or rejection of books of account, the information/books of account filed by the assessee simply cannot be brushed aside. The additions seem to be on the basis of suspicion, conjecture and surmises, therefore, such additions cannot be sustained Our view is fortified by the decision from the Hon'ble Apex A.Y. 2017-18 Page 7 of 7
In view of the above, finding no merit in the appeal, the same is dismissed.”
The above observations made by the Hon'ble High Court are duly applicable to the facts and circumstances of the case in hand. In view of the above discussion, the additions made by the lower authorities are hereby ordered to be deleted.
In the result, the appeal of the assessee stands allowed.
Order pronounced on 2021. (N.K.SAINI) (SANJAY GARG) उपा"य"/VICE PRESIDENT "या"यक सद"य/ Judicial Member
Dated: 07.12.2021 *रती*
आदेश क" ""त"ल"प अ"े"षत/ Copy of the order forwarded to : 1. अपीलाथ"/ The Appellant
""यथ"/ The Respondent 3. आयकर आयु"त/ CIT 4. आयकर आयु"त (अपील)/ The CIT(A)
"वभागीय ""त"न"ध, आयकर अपील"य आ"धकरण, च"डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड" फाईल/ Guard File
आदेशानुसार/ By order, सहायक पंजीकार/