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Income Tax Appellate Tribunal, HYDERABAD ‘B’ BENCH : Hyderabad
Before: Smt. P. Madhavi Devi & Shri A. Mohan Alankamony
Date of Hearing : 07/07/2021 Date of Pronouncement : 12/08/2021 O R D E R PER P. MADHAVI DEVI, JM
This is assessee’s appeal filed against the order of CIT(A)-1, Hyderabad dated 28.08.2019 relating to A.Y. 2013-14.
Brief facts of the case are that the assessee, an individual, filed his return of income for AY 2013-14 on 20.03.2015 totalling to Rs.2,96,910/-. During the assessment proceedings u/s 143(3) of the Income Tax Act, 1961 [the Act in short], the AO observed that assessee received salary from the Nizamabad Dist, Toddy Co-operative Society Ltd. @ Rs. 17,000/- p.m. and also that the assessee has declared income from long term capital gain to the tune of Rs.92,910/-. Further, he observed that the assessee has made huge cash deposits, to the tune of Rs.86,83,000/- into his bank account with Sri Madhusudhan Goud Kaire, Nizamabad various banks and assessee was asked to explain sources for such cash deposits. Assessee furnished cash flow statement and after taking the same into consideration the AO observed that there were total deposits of Rs. 86,83,000/- and there is also withdrawal of Rs. 24,72,000/-. The difference of Rs. 62,11,000/- was treated as unexplained cash deposits. When asked to explain the same, on 23.3.2016, the assessee submitted that he is an employee of Nizamabad Toddy Co-Op Society, and the cash deposits are actually the sale receipts from 11 shops. He submitted that such receipts were deposited into his three bank accounts and subsequently returned to the concerned Members of the society. In support of the same, assessee submitted a copy of the letter of the President of the Toddy Distribution Society. The AO, however did not accept the contentions of the assessee and after reducing the withdrawals from the total of the deposits, the AO made an addition of Rs.62,11,000/-. Aggrieved, assessee preferred an appeal before the CIT(A) who confirmed the order of the AO and assessee is in second appeal before us by raising following grounds of appeal.
“1. The ld.CIT(A) erred in law and on facts while confirming the addition of Rs62,11,000/- towards unexplained cash deposits in the three bank accounts of the appellant totally ignoring the Notarized Affidavit filed before the CIT(A) by the President of Toddy Distribution Society confirming that the money deposited in assessee’s three bank accounts was returned to the eighteen hundred members of the society by withdrawing the same on different dates.
2. The ld.CIT(A) failed to observe that the said addition of Rs.62,11,000/- was in fact made by the AO for want of such an affidavit.
3. Without prejudice to foregoing grounds, the ld.CIT(A) ought to have conceded the alternative argument advanced before her that in case the main argument of the appellant that the money belonged to various members of the society is not acceptable, the said deposits of Rs.62,11,000/- may be treated as retail turnover of appellant u/s 44 AD of the Act and an addition to the extent of Sri Madhusudhan Goud Kaire, Nizamabad Rs..4,96,880 may be made as business income in place of entire sum of Rs.62,11,000/-.”
Having regard to rival contentions and material placed on record, we find that undisputedly the assessee is an employee of Toddy Co-operative Society, Nizamabad and he has also submitted an affidavit of the President of the Society stating that the deposits are from the receipts of the society and such an affidavit also has not been doubted by the revenue. In such circumstances, we are of the opinion that the CIT(A) ought to have called for a report from the AO, who in turn, could have given an opportunity to assessee and also verified whether sales were recorded in books of accounts of the Society and assessee’s contentions that deposits are made out of sales of the society. Hence, for this limited purpose of verification of the contentions of the assessee that the deposits are from the sales of Nizamabad Toddy Co-Op Society, we deem it fit and proper to remand the issue back to the file of the AO for de novo consideration in accordance with law.
In the result, assessee’s appeal is treated as allowed for statistical purposes.