ABJAYONI TRADING PRIVATE LIMITED,THANE vs. DCIT, CENTRAL CIRCLE-2(2), MUMBAI, MUMBAI

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ITA 2514/MUM/2023Status: DisposedITAT Mumbai14 November 2023AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee company was struck off before the assessment order was passed and that the assessee's explanation for not submitting this information was unsatisfactory. To meet the ends of justice, the Tribunal set aside the CIT(A)'s order and restored the issues to the AO for fresh adjudication.

What were the facts?

The assessee's appeal concerns additions made by the AO under Section 69A for unexplained cash deposits during demonetization, which were confirmed by the CIT(A). The assessee argued that the CIT(A) erred in not considering explanations and that the company was struck off from the register of companies before the assessment order was passed.

What were the issues?

Whether the CIT(A) erred in confirming additions under Section 69A without considering the fact that the assessee company was struck off before the assessment order was passed.

Which sections of the Income-tax Act were involved?

Section 69A,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI PAVAN KUMAR GADALE

For Appellant: Shri Neeraj Mangla.AR
For Respondent: Shri G.J. Ninawe, Sr. DR
Hearing: 02.11.2023Pronounced: 08.11.2023

Assessee by : Shri Neeraj Mangla.AR Revenue by : Shri G.J. Ninawe, Sr. DR Date of Hearing 02.11.2023 Date of Pronouncement 08.11.2023 आदेश / O R D E R

PER PAVAN KUMAR GADALE JM:

1.

The appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC)Delhi / CIT(A) passed u/s 144 and U/sec 250 of the Ac. The assessee has raised the following grounds of appeal:

1. That the assessment order passed by Ld AO as well as the appellate order passed by Ld CIT(A) are bad in law and have been passed in contravention of prevailing law as well as facts of the case, therefore liable to be annulled

AbJayoni Trading Pvt Ltd, Mumbai. - 2 -

2 That the Ld AO grossly erred in law and in facts of the case in holding cash withdrawals of Rs10,50,000/- as cash deposits and thereafter assessing the same as unexplained money u/s 69A of the Act.

3That the Ld AO grossly erred in law and in facts of the case in assessing cash deposits of Rs27,92,000/- made during demonetization period as unexplained money u/s 69A of the Act.

4That the appellant seeks leave to amend, alter, change any grounds of appeal or take any further ground at any time even during the course of hearing of instant appeal..

2. The brief facts of the case that, the assessee is engaged in the business. The Assessing Officer (AO) has received information that during the demonetization period the assessee has made cash deposits of Rs.27,92,000/- in the eight bank accounts. Whereas the AO has issued notice u/s 142(1) of the Act calling for various details and to explain the sources of deposits. Since there was no compliance, the AO has invoked the provisions of Sec. 144(1)(b) of the Act and made best judgment assessment. The AO has dealt on the facts and issued notice U/sec133(6) of the Act on the banks for the account statements. Finally the A.O has relied on the credits in AbJayoni Trading Pvt Ltd, Mumbai. - 3 - bank statements and made an addition u/sec 69A of the Act of Rs. 38,42,000/- and assessed the total income of Rs. 38,42,000/- and passed the order u/sec 144 of the Act dated 23.12.2019.

3.

Aggrieved by the order the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, submissions of the assessee and findings of the AO and observed that the cash deposits could not match with the sources and withdrawals by the assessee and has confirmed the action of the AO and dismissed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon’ble Tribunal.

4. At the time of hearing, the Ld. AR submitted that the CIT(A) erred in not considering the explanations on the cash deposits and the assessee company was not existing at the time of passing of order u/s 144 of the Act and the Ld.AR substantiated the submissions with the paper book and prayed for allowing the appeal.

5. Contra, the Ld. DR submitted that the assessee has not informed about the dissolution of the company in the AbJayoni Trading Pvt Ltd, Mumbai. - 4 - course of assessment proceedings and relied on the CIT(A) order.

6.

Heard the rival submissions and perused the material on record. The sole matrix of the disputed issue, as the CIT(A) has erred in confirming the action of the AO on the addition of cash deposits, irrespective of the fact that the assessee has substantiated with the material information in the proceeding. The Ld. AR submitted that the assessee company was strike off from the register of companies of ROC-Mumbai on 12.09.2018 and whereas the assessment order U/sec144 of the Act was passed on 23.12.2019. The Ld.AR demonstrated the notice of striking off placed at page 1 to 6 of the Paper book. When a query was raised to Ld.AR for not submitting the information of Strike off of the assessee company in the assesseement proceedings the explanations of the Ld.AR are not satisfactory and the Ld.AR prayed for an opportunity for substantiating the details before the lower authorities. Therefore considering the facts, circumstances and to meet the ends of justice, set aside the order of the CIT(A) and restore the disputed issues to the file of the Assessing officer to adjudicate fresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in filling the AbJayoni Trading Pvt Ltd, Mumbai. - 5 - information and allow the grounds of appeal of the assessee for statistical purposes.

7.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 08.11.2023.

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