MADHAVPRASAD GOVINDRAM JALAN ,MUMBAI vs. ITO 10(1)(3), MUMBAI

In the facts and circumstances of the case and in law, 1. In the facts and circumstances of the case and in law, 1. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing O erred in upholding the action of the Ld. Assessing O erred in upholding the action of the Ld. Assessing Officer in making addition of bank credits aggregating to Rs. making addition of bank credits aggregating to Rs. making addition of bank credits aggregating to Rs. 1,08,00,000/ 1,08,00,000/-under section 68 of the Act; disregarding the under section 68 of the Act; disregarding the factual and legal matrix of the case; inter factual and legal matrix of the case; inter-alia the following: alia the following: a) that the amount aggregating to Rs. 1,00,00,000/ a) that the amount aggregating to Rs. 1,00,00,000/ a) that the amount aggregating to Rs. 1,00,00,000/- credited in credited in Appellant's bank account represented the Appellant's bank account represented the amount of short term transfer from a listed public company; amount of short term transfer from a listed public company; amount of short term transfer from a listed public company; which was immediately repaid back to the said company. which was immediately repaid back to the said company. which was immediately repaid back to the said company. b) b) b) that that that the the the amount amount amount aggregating aggregating aggregating to to Rs. 7,00,000/ to Rs. 7,00,000/ Rs. 7,00,000/- represented the amount of repayment of loan by a li represented the amount of repayment of loan by a li represented the amount of repayment of loan by a listed public company, which was earlier advanced by the public company, which was earlier advanced by the public company, which was earlier advanced by the Appellant to the said company. Appellant to the said company. c) that the amount aggregating to Rs. 1,00,000/ c) that the amount aggregating to Rs. 1,00,000/ c) that the amount aggregating to Rs. 1,00,000/- was already offered as income under the head of Salary by the already offered as income under the head of Salary by the already offered as income under the head of Salary by the Appellant.

In the facts and circumstances of the case an 2. In the facts and circumstances of the case an 2. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred Commissioner of Income Tax (Appeals) has erred Commissioner of Income Tax (Appeals) has erred upholding the action of the Id. Assessing Officer in making upholding the action of the Id. Assessing Officer in making upholding the action of the Id. Assessing Officer in making addition of bank credits aggregating to Rs. 1,08.00,000/ addition of bank credits aggregating to Rs. 1,08.00,000/ addition of bank credits aggregating to Rs. 1,08.00,000/- under section 68 disregarding the fact and law that in under section 68 disregarding the fact and law that in under section 68 disregarding the fact and law that in absence of Books Of absence of Books Of Accounts of the Assessee, no addition Accounts of the Assessee, no addition can be made under section 68 of the Act. can be made under section 68 of the Act. 3. In the facts and circumstances of the case and in law, 3. In the facts and circumstances of the case and in law, 3. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred Commissioner of Income Tax (Appeals) has erred Commissioner of Income Tax (Appeals) has erred upholding the action of the Ld. Assessing Officer in making upholding the action of the Ld. Assessing Officer in making upholding the action of the Ld. Assessing Officer in making addition of peak credit of cash deposits of Rs. 4,75,000/ ition of peak credit of cash deposits of Rs. 4,75,000/- ition of peak credit of cash deposits of Rs. 4,75,000/ under section 68 of the Act disregarding the Factual and under section 68 of the Act disregarding the Factual and under section 68 of the Act disregarding the Factual and Legal matrix of the case. Legal matrix of the case. 4. In the facts and circumstances of the case and in law, 4. In the facts and circumstances of the case and in law, 4. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred Commissioner of Income Tax (Appeals) has erred Commissioner of Income Tax (Appeals) has erred upholding the action of the Ld. Assessing Officer in making ding the action of the Ld. Assessing Officer in making ding the action of the Ld. Assessing Officer in making addition of peak credit of cash deposit of Rs. 4,75,000/ addition of peak credit of cash deposit of Rs. 4,75,000/ addition of peak credit of cash deposit of Rs. 4,75,000/- under section 68 of the Act disregarding the fact and law under section 68 of the Act disregarding the fact and law under section 68 of the Act disregarding the fact and law that in absence of Books Of Accounts of the Assessee, no that in absence of Books Of Accounts of the Assessee, no that in absence of Books Of Accounts of the Assessee, no addition can be made under se addition can be made under section 68 of the Act.

In the facts and circumstances of the case and in law, 6. In the facts and circumstances of the case and in law, 6. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) and the Ld. the Ld. Commissioner of Income Tax (Appeals) and the Ld. the Ld. Commissioner of Income Tax (Appeals) and the Ld. Assessing Officer has erred in passing the respective Assessing Officer has erred in passing the respective Assessing Officer has erred in passing the respective impugned orders impugned orders - a) without providing adequate and sufficient opportunity of a) without providing adequate and sufficient opportunity of a) without providing adequate and sufficient opportunity of being heard to the Appellant; thereby violating the being heard to the Appellant; thereby violating the being heard to the Appellant; thereby violating the principles of natural justice; and principles of natural justice; and b) by disregarding the submissions/explanations and b) by disregarding the submissions/explanations and b) by disregarding the submissions/explanations and documentary evidences on record. documentary evidences on record. 2. Briefly stated facts of the case are that the assessee did not file Briefly stated facts of the case are that the assessee did not file Briefly stated facts of the case are that the assessee did not file regular return of income for the year under consideration within the return of income for the year under consideration within the return of income for the year under consideration within the time limit prescribed u/s 139(1) or 139(4) of the Income-tax Act, time limit prescribed u/s 139(1) or 139(4) of the Income time limit prescribed u/s 139(1) or 139(4) of the Income 1961 (in short ‘the Act’). The Ld. Assessing Officer on verification of 1961 (in short ‘the Act’). The Ld. Assessing Officer on verification of 1961 (in short ‘the Act’). The Ld. Assessing Officer on verification of the data available on the Income the data available on the Income-tax Portal, found that t tax Portal, found that the assessee had deposited of Rs.14,00,000/ had deposited of Rs.14,00,000/- in his saving account in his saving accounts and also received salary of Rs.4,50,000/ received salary of Rs.4,50,000/- from Mahalaxmi Seamless Ltd. from Mahalaxmi Seamless Ltd. however did not file return of income and therefore, he issued notice however did not file return of income and therefore, he issued notice however did not file return of income and therefore, he issued notice u/s 148 of the Act on 28.12.2017 u/s 148 of the Act on 28.12.2017 after seeking approval from the pproval from the competent authority u/s 151 of the Act competent authority u/s 151 of the Act and initiated the and initiated the reassessment proceedings u/s 147 of the Act. In response, the reassessment proceedings u/s 147 of the Act. In response, the reassessment proceedings u/s 147 of the Act. In response, the assessee filed return of income declaring salary from Mahalaxmi assessee filed return of income declaring salary from Mahalaxmi assessee filed return of income declaring salary from Mahalaxmi Seamless Ltd. during the assessment proceedings. On veri during the assessment proceedings. On verification of during the assessment proceedings. On veri the submission of the assessee, the Assessing Officer made addition the submission of the assessee, the Assessing Officer made addition the submission of the assessee, the Assessing Officer made addition for cash deposit of Rs.4,50,000/ for cash deposit of Rs.4,50,000/- taking a peak of cash transaction taking a peak of cash transaction

Aggrieved, the assessee filed appeal before the Aggrieved, the assessee filed appeal before the Aggrieved, the assessee filed appeal before the Ld. First Appellate Authority having jurisdiction over the assessee [i.e. ‘Ld. Appellate Authority having jurisdiction over the assessee [i.e. ‘ Appellate Authority having jurisdiction over the assessee [i.e. ‘ CIT(A)’]. The appeal was The appeal was then transferred to NFAC. However, the Ld. However, the Ld. ‘NFAC’ noted that despite several opportunitie noted that despite several opportunities, the assess s, the assessee did not comply and therefore and therefore, he passed the order on the basis of the he passed the order on the basis of the available document and dismiss available document and dismissed the appeal of the assessee the appeal of the assessee, observing as under:

We have heard rival submission of the parties on the issue We have heard rival submission of the parties on the issue We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that the Ld. NFAC has not taken into consideration submission of the has not taken into consideration submission of the has not taken into consideration submission of the assessee. Before us, the Ld. Counsel of assessee. Before us, the Ld. Counsel of the assessee submitted that the assessee submitted that during the course of the hearing before the Ld. CIT(A), i.e. during the course of the hearing before the Ld. CIT(A), during the course of the hearing before the Ld. CIT(A), predecessor to NFAC predecessor to NFAC, the assessee filed various documentary the assessee filed various documentary evidence in the form of additional evidence to substantiate the evidence in the form of additional evidence to substantiate the evidence in the form of additional evidence to substantiate the receipts from the company. The Ld. CIT(A) vi receipts from the company. The Ld. CIT(A) vide letter dated de letter dated 12.09.2019 called for the comment of the Assessing Officer on the 12.09.2019 called for the comment of the Assessing Officer on the 12.09.2019 called for the comment of the Assessing Officer on the additional evidence. During the course of remand proceedings, the additional evidence. During the course of remand proceedings, the additional evidence. During the course of remand proceedings, the assessee filed detailed submission along with the documentary assessee filed detailed submission along with the documentary assessee filed detailed submission along with the documentary evidence to substantiate receipts from the com evidence to substantiate receipts from the company and also in pany and also in respect of the cash deposit. The Assessing Officer issued notice u/s respect of the cash deposit. The Assessing Officer issued notice u/s respect of the cash deposit. The Assessing Officer issued notice u/s 133(6) of the Act to company. Thereafter, the Assessing Officer after 133(6) of the Act to company. Thereafter, the Assessing Officer after 133(6) of the Act to company. Thereafter, the Assessing Officer after verification has sent remand report vide letter dated 23.01.2020 remand report vide letter dated 23.01.2020. A copy of the said remand report w copy of the said remand report was provided to the assessee by the as provided to the assessee by the Ld. CIT(A). Thereafter, appeal of the assessee was transferred to the Ld. CIT(A). Thereafter, appeal of the assessee was transferred to the Ld. CIT(A). Thereafter, appeal of the assessee was transferred to the Ld. NFAC. Before the . Before the Ld. NFAC, the assessee claimed to assessee claimed to have filed all the documents but the Ld. all the documents but the Ld. NFAC has noted that the assessee has noted that the assessee failed to produce substantial evidence failed to produce substantial evidence. Thus it is evident that . Thus it is evident that additional evidences, which were filed before the Commissioner of additional evidences, which were filed before the Commissioner of additional evidences, which were filed before the Commissioner of Income-tax (Appeals) and tax (Appeals) and remand report thereon filed by the remand report thereon filed by the Assesisng Officer, have have not been considered by the National dered by the National Faceless Appeal Centre and order has been passed in ex-parte Faceless Appeal Centre and order has been passed in Faceless Appeal Centre and order has been passed in manner.

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