BORRA RAKESH ,NALGONDA vs. INCOME TAX OFFICER, WARD-1, SURYAPET

At the outset, it is seen that there is a delay of 2 days in filing of this appeal. The assessee has filed an application seeking condonation of delay. Being satisfied that the delay is not willful or wanton, I condone the delay of 2 days ad proceed to dispute of the appeal as under:-

Brief facts of the case are that the assessee, an individual, running a furniture shop at Bhongir town under the name “Gayathri Steels and Wood Furniture Works”, filed his return of income for the A.Y 2013-14 on 2.4.2014 admitting a net income of Rs.2,46,230/- on a total turnover of Rs.45,80,500/-. The return was selected for scrutiny to verify the sources of cash deposits into the Bank A/c which were more than the turnover Page 1 of 3 declared in the return of income. Though the notices u/s 143(2) and 142(1) were issued to the assessee, none appeared on behalf of the assessee. Therefore, the AO was constrained to complete the assessment u/s 144 of the I.T. Act. The AO observed that the assessee had credited a total amount of Rs.63,07,492/- into his Bank A/c during the relevant financial. After giving credit to the demand drafts for an amount of Rs.27,81,400/- in the months of May 2012 to July 2012, and also the business turnover of Ambica Wines for the period of 4 months i.e. April 2012 to July 2012, the AO arrived at a figure of Rs.21,51,393/- as not explained by the assessee and therefore, treated it as undisclosed income of the assessee and brought it to tax as “income from other sources”. Aggrieved, the assessee preferred an appeal before the CIT (A) and filed statement of facts and written submissions explaining the transactions. The assessee has submitted that the AO did not examine the fact that there was an opening balance of Rs.59,91,186/- with Canara Bank. The CIT (A) has reproduced the submissions of the assessee as well as the finding of the AO but did not give any finding on merits. Therefore, the assessee prayed for an opportunity to explain the transactions before the AO.

The learned DR was also heard who relied upon the orders of the authorities below.

Having regard to the rival contentions and the material on record, I find that the assessment order is an ex-parte order and in the appeal filed before the CIT (A), no speaking order is passed. Therefore, I deem it fit and proper to remand the issue to the file of the AO, for denovo consideration of assessee’s written submissions in accordance with law. The assessee’s appeal is accordingly allowed for statistical purposes.

In the result, assessee’s appeal is allowed for statistical purposes. Order pronounced in the Open Court on 22nd February, 2021.