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Income Tax Appellate Tribunal, “SMC - B” BENCH : BANGALORE
Before: SHRI GEORGE GEORGE K
This appeal at the instance of the assessee is directed against CIT(A)’s order dated 26.07.2023, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year 2016-17.
Grounds raised
by the assessee read as follows:
1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.
2. The appellant denies himself liable to be assessed on a total income of Rs. 29,17,050/- as against the returned income of Rs. 4,01,350/- for the year under appeal, under the facts and in the circumstances of the appellant's case.
3. The learned CIT[A]/NFAC is not justified in upholding the addition of Rs. 25,15,700/- as unexplained cash deposited in the bank account made under section 68 of the Act without appreciating that the provisions of section 68 of the Act have no application to the cash deposits made in the bank account and therefore. the impugned addition made ought to have been deleted. 3.1 The learned CIT[A] ought to have appreciated that the cash deposits Rs. 20,61,400/- in Axis Bank Account No. 909020032709357 did not long to the appellant and the said bank account related to a partnership firm M/s Raju Electro Centre having PAN AAKFR 4729F in which the appellant was a partner and thus, no addition ought to have been made in the appellant's hands under the facts and in the circumstances of the appellant's case. 3.2 The learned CIT[A] failed to appreciate that the cash deposits made by the appellant in his bank account was only Rs. 4,54,300/- which bank account of the appellant was maintained in M/s Sree Charan Souharda Cooperative Bank Ltd., and the said cash deposits were from out of known I and explainable sources of funds of the appellant and therefore, the addition made to the said extent ought to have been deleted under the facts and in the circumstances of the appellant's case.
Assessee, an individual, had filed the return of income for Assessment Year 2016-17 on 31.03.2018 declaring total income of Rs.4,01,350/-. Assessment was selected for scrutiny and notice under section 143(2) of the Act was issued on 24.09.2018. During the course of assessment proceedings, assessee was directed to explain the source of cash deposit made. The assessee, in response to the notice issued, had filed certain details (including the bank statement) through e- proceedings portal. Assessee was issued a notice dated 01.12.2018 directing him to furnish the source of cash deposits. Since there was no reply from the assessee before 04.12.2018, the cash deposits aggregating to Rs.25,15,700/- was added under section 68 of the Act.
Aggrieved by the order of the AO, assessee filed appeal before the First Appellate Authority (FAA). Since there was no compliance to the five notices issued from the Office of the FAA, the CIT(A) dismissed the appeal in limine and confirmed the addition made by the AO.
Aggrieved by the order of the CIT(A), assessee has filed the present appeal before the Tribunal. Assessee has filed a Paper Book comprising of 45 pages enclosing therein the notices issued under sections 143(2), 142(1), copy of the bank statements of Sree Charan Souharda Co-operative Bank Ltd., copy of the bank statement of Axis Bank, acknowledgement of the return filed in the case of Raju Elecro Centre for Assessment Year 2016-17, judicial pronouncement relied on, etc. The learned AR submitted that AO had received Axis Bank statement from the Manager on 10.12.2018 through post and assessee was requested to furnish the details on or before 04.12.2018. It was submitted that the Axis Bank account does not belong to the assessee but belong to a partnership firm in which assessee was a partner. Therefore, it was submitted that the addition if at all is to be made in the hands of the partnership firm M/s. Raju Electro Centre. As regards non-appearance / non-filing of written submissions before the CIT(A), the learned AR submitted that the hearing notices were never received by the assessee.
The learned Standing Counsel was duly heard.
I have heard the rival submissions and perused the material on record. The AO had made addition of Rs.25,15,700/- under section 68 of the Act. The addition under section 68 of the Act was for cash deposits made in Sree Charan Souharda Co-operative Bank Ltd., of Rs.4,54,300/- and Axis Bank account of Rs.20,61,400/-. The learned AR has placed on record copy of the bank statement of Axis Bank. Prima facie, on perusal of the same, it is clear that the account belongs to the partnership firm and not to the assessee. Therefore, the addition of Rs.20,61,400/- on account of cash deposits with Axis Bank cannot be justified. Moreover, I notice that Axis Bank statement was not provided by the assessee but was obtained by the AO from the bank directly on 10.12.2018 through post. It is further to be mentioned that assessee was given a last opportunity vide show cause notice dated 01.12.2018 to furnish the source of deposit on or before 04.12.2018.
Since the AO had received a bank statement subsequent to 04.12.2018 (the last hearing date given to the assessee), ideally AO ought to have granted further opportunity to the assessee to explain source of cash deposit. In the interest of justice and equity, the matter needs to the reconsidered by the AO. Accordingly, the issue is restored to the AO to reconsider the addition of Rs.25,15,700/- under section 68 of the Act. Assessee shall furnish the necessary details and shall not seek necessary adjournments. It is ordered accordingly.
In the result, appeal filed by the assessee is allowed for statistical purposes.