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Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by revenue is directed against order of NFAC for the assessment year 2017-18 dated 11.9.2023 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”). The revenue has raised following grounds of appeal:
1. The order of the ld. CIT(A) in so far as it is prejudicial to the interest of the Revenue is opposed to law and the fact and circumstances of the case.
2. The CIT(A) erred on facts and law in giving relief or Rs.74.22 lakhs.
3. Whether on the facts and circumstances of the case, the ld. CIT(A) failed to appreciate that AO has considered various other credits while computing the unexplained cash credits.
4. Whether on the facts and circumstances of the case, the ld. CIT(A) failed to appreciate that the assessee has not explained the sources of cash deposits of Rs.74.22 lakh (out of total Rs.99,14,738/- cash deposits during the assessment proceedings,
Sri Chandrashekar, Bangalore Page 2 of 3 5. Whether on the facts and circumstances of the case the ld. CIT(A) ought to have appreciated the increase in loans of Rs.41,34,137/- has been telescoped towards the other credits in the bank accounts. 6. The above grounds and any other grounds may be urged at the time of hearing. 7. The appellant craves leaves to add, alter, amend and or delete any of the grounds that may be urged.”
Facts of the issue are that the assessee is an individual engaged in the business of distribution of food to the allied products. The assessee has filed return of income for the assessment year 2017-18 on 29.10.2017 declaring net income of Rs.9,09,400/-. The ld. AO has completed the assessment u/s 143(3) of the Act dated 23.12.2019 making addition of Rs.99,14,738/- u/s 68 of the Act and also levied additional tax u/s 115BBE of the Act. Against this, assessee carried the appeal before NFAC. Before NFAC, assessee submitted that there are various payments made directly to the account by way of ECS/NEFT/RTGS to the tune of Rs.43.33 lakhs and there are also certain cheques returned to the tune of Rs.14.04 lakhs and also inter-bank transfers credited by the bank at Rs.8.85 lakhs and advance refund of Rs.17 lakhs and balance credited into bank account was only to the tune of Rs.15.93 lakhs, which is out of regular cash collection from the customers against the invoices which was deposited to bank account. Thus, the NFAC observed that except Rs.24.93 lakhs, balance has been explained as such deleted the additions. Against this revenue is in appeal before us.
We have heard the rival submissions and perused the materials available on record. In this case, assessee has furnished certain details of source of deposit into assessee’s bank account before NFAC. However, these bifurcations were not made available to AO while framing assessment. The ld. AO clearly recorded that total cash/credits into bank accounts was Rs.6,92,58,653/- as Sri Chandrashekar, Bangalore Page 3 of 3 against the turnover declared by assessee at Rs.5,98,32,500/-. As such, the excess was considered as cash deposit by assessee and treated as an amount of Rs.94,26,153/- as unexplained credit u/s 68 of the Act. However, the findings of the NFAC are contrary to these observations made by the ld. AO. Hence, in the interest of justice, the entire issue in dispute is remitted to the file of ld. AO for fresh consideration with a direction to the assessee to place all necessary evidences in support of his case before ld. AO. The ld. AO shall consider all evidences furnished by the assessee afresh and decide in accordance with law.
In the result, appeal of the revenue is partly allowed for statistical purposes. Order pronounced in the open court on 13th Dec, 2023