SHRI PRADEEP SANJEEV SHETTY,PALGHAR vs. NATIONAL FACELESS APPEAL CENTRE, DELHI

O R D E R

PER PAVAN KUMAR GADALE JM:

1. The assessee has filed the appeal against the order of National Faceless Appeal Centre (NFAC), Delhi/ CIT(A) passed u/s 143(3) and 250 of the Act.

2. The Hon’ble Tribunal in MA No. 157/Mum/2023 vide order dated 06.07.2023 has recalled the ex parte order of the tribunal dated 31.10.2022 and now the Shri Pradeep Sanjeev Shetty., Mumbai. - 2 - case is posted for hearing. The assessee has raised the following grounds of appeal:

Ground No. 1 :-

a) On the facts and in the circumstances of the case and in law, the AO erred in making addition of Cash Deposited into Bank without considering the Assessee submission made before the AO. b) On the facts and in the circumstances of the case and in law, the AO erred in considering the modus operandi of business of Assessee and addition of Cash Deposit during the demonetization period Rs 6,48,500 (8,53,500 2,05,000) c) On the facts and in the circumstances of the case and in law, the AO erred in considering the fact that Assessee has small scale business of Catering and Desi Bar which mainly in cash and AO failed to understand the fact that the Bank statement cannot be considered as Book of Accounts for the purpose of making addition u/s 69A of the Act.

However, the assessee has relied on the various judgements which stated that mere deposit in the Banks cannot be presumed as undisclosed income.

Ground No. 2 :-

On the facts and in the circumstances of the case and in law, the AO erred in considering the fact that Assessee

Shri Pradeep Sanjeev Shetty., Mumbai. - 3 - had not filed income tax Return u/s 139(1) therefore the Notice of Scrutiny u/s 143(2) where the return is not filed is bad in law. Further, The AO erred in considering the fact that Assessee had not filed income tax Return u/s 139(1) therefore the Notice of Scrutiny u/s 143(2) where the return is not filed is bad in law. AO has ignored the CBDT circular No F No. 225/333/2019/ITA-II 2. The brief facts of the case are that, the assessee is engaged in the business of catering and desi bar. The assessee has not filed the return of income u/s 139(1) of the Act. Whereas the Assessing Officer (AO) has received the information on AIMS module that in the F.Y 2016-17, an aggregate amount of Rs. 13,66,250/- was deposited in the assessee bank account maintained with Punjab Maharashtra Co-op Bank. Since the assessee has not filed the return of income, therefore the notice u/s 142(1) of the Act was issued. Whereas the AO on perusal of the facts and information found that the assessee has offered the income of Rs. 6,09,783/- after claiming deduction under chapter VI A of Rs.1,19,366/-. The assessee has disclosed the income from business as per provisions of Sec. 44AD of the Act estimating @ 8% of total turnover of Rs.90,37,064/- and the assessee

Shri Pradeep Sanjeev Shetty., Mumbai. - 4 - has also disclosed income from other sources. The AO has dealt on the facts and submissions and found that the assessee could not substantiate the sources of cash deposits in the bank account during the year and the AO has made an addition of Rs.6,48,500/- u/s 69A of the Act and assessed the total income of Rs.12,58,283/- and passed the order u/s 144 of the Act dated 16.11.2019.

4. At the time of hearing the Ld. AR submitted that the CIT(A) erred in not considering the facts and information filed before the AO and the Ld. AR contended that the assessee has substantial sources and has filed paper book and submissions supported with the evidences explaining the sources

Shri Pradeep Sanjeev Shetty., Mumbai. - 5 - of cash deposits. Contra, the Ld. DR relied on the order of the CIT(A).

Shri Pradeep Sanjeev Shetty., Mumbai. - 6 - and the assessee should cooperate in submitting the information. Accordingly, the grounds of appeal of the assessee are allowed for statistical purposes.

Order pronounced in the open court on 22.08.2023.