Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI MANOJ KUMAR AGGARWAL & SHRI MANOMOHAN DAS
आदेश / O R D E R PER MANOMOHAN DAS, JM:
Aforesaid appeal by the assessee is directed against
the order dated 21-03-2022 passed by Ld. Commissioner
of Income Tax (Appeals), (“CIT(A)”) National Faceless
Appeal Centre (NFAC), Delhi passed under section 250 of
the Income Tax Act, 1961 (“the Act”) pertaining to
Assessment year (“AY”) 2017-18.
ITA No.266/Chny/2022 :: 2 ::
The assessee has raised the following grounds of
appeal:-
The Commissioner of Income-tax (Appeals) having reproduced at Page 7 of appellate order the fact that only "Demonetized Currency Deposits" made between 10-11-2016 and 30-12-2016 were being considered, such deposits of Rs.36,29,500/- alone ought to have been taken into account and not Rs.1.94 crores. 2. As cash deposits made into bank were recorded in tax audited books of account, it should have been accepted that there was no need for a separate explanation for their sources. 3. All purchases being from reputed companies and most of the sales verifiable, and as cash deposits made were much less than sales in trading account, no addition ought to have been made. 4. As activity in Bharti Airtel Mobile Coupons commenced only on 25-02-2016, cash deposits being more during year ended 31-03- 2017 should not have suspected. 5. As sales out of which cash deposits were made are considered in trading, adding deposits amounts to taxing same amount twice over. 6. Judgements relied upon by Assessing Officer ought not to have been cited by Commissioner (Appeals) again, ignoring written submissions filed distinguishing them. 7.As Section 69A applies only to unrecorded money and as amounts credited in Business books constitute business income, computing tax under section 115BBE is incorrect (35 1TR 416 SC, 20 ITR 579 and 27 ITR 658 Bom) For these and other reasons, which may be stated at the time of hearing of the appeal, it is prayed that the addition made to income may please be deleted.
The brief facts of the case are that the assessee is an
individual and stated to be engaged as authorized
distributor of Mobile recharge coupons, locker and door
ITA No.266/Chny/2022 :: 3 :: closures of products of Godrej Co, Fevical, Himalaya’s
Cosmetic Co., Samsung Mobile Phones and accessories,
MTR Foods Products, TTK Health Care Ltd. etc. During the
previous year relevant to the Assessment Year 2017-18,
the assessee e-filed its return of income on 30-10-2017
declaring total income of Rs.29,79,690/- which was e-
processed under section 143(1) of the Act. The case was
selected for scrutiny under CASS as there was cash deposit
during demonetization period and abnormal increase in
cash deposits during the demonetization period as
compared to pre-demonetization period.
In the course of assessment proceedings, the
Assessing Officer issued notice to the assessee u/s 143(2)
of the Act on 22-09-2018 which was served upon him on
26-09-2018. Subsequently, notice under section 142(1)
was issued to the assessee on 16-10-2019 asking him to
submit the details of source of cash deposit, source of
advances received, investments made / assets acquired
ITA No.266/Chny/2022 :: 4 ::
during the year, Profit & Loss A/c, income computation
statement, copy of sales tax return, TDS Reconciliation as
per Form 16/16A & 26AS statement etc. for verification.
The details sought from the assessee were as under:-
(i) the details of sources of cash deposits made into the bank account along with reconciliation of bank account entries and cash book. (ii) Explanation regarding the sources for cash deposit made during the period of demonetization. The assessee was asked to provide explanation in a prescribed format and other information as stated in the assessment order dated 15-12-2019.
Since assessee did not respond, another notice was
issued to him on 22-11-2019 giving final opportunity to
submit the requisite details.
It was stated in the assessment order that the assessee
had submitted the desired details other than cash deposit
breakup and sources of cash deposit details.
Thereafter, the Assessing Officer examined the reply
submitted by the assessee and the information available in
his office and observed that the assessee made cash and
credit deposits in the following bank accounts :-
ITA No.266/Chny/2022 :: 5 ::
Name of Bank Account Number Demonetization currency Deposits during Demonetization period (9.11.2016 to 30.12.2016) Cash IOB 00800200090093 77,39,080 IOB 00802000012835 95,33,880 IOB 211702000005730 21,51,287 Total 1,94,24,247/-
The Assessing Officer, in para No. 5(a) of his
assessment order dated 15-12-2019, stated that the
aforesaid cash deposit of Rs.1,94,24,247 made during the
period of demonetization into the accounts of the assessee
remained unexplained as to its nature and source.
Therefore, the said amount was added to the total income
of the assessee.
Being aggrieved, the assessee filed first appeal before
the Ld. CIT-(A). The Ld. CIT-(A), vide impugned order
dated 21-03-2022, rejected the appeal of the assessee
merely by endorsing the observation of the Assessing
Officer.
ITA No.266/Chny/2022 :: 6 :: 10. Aggrieved, the assessee is in further appeal before
Tribunal.
Heard the representatives of both the parties and
perused the materials on records.
The Ld. Representative of the assessee submitted that
the allegation that there was no response to the notices
issued by the Ld. Assessing Officer, are not correct. In this
regard, Ld. AR pointed out detailed submissions made by
assessee vide its reply dated 03.12.2019 as well as
submissions made before Ld. CIT(A) on 31-12-2020. The
same are kept on page nos. 36 to 76 of paper-book. The
Ld. AR submitted that the assessee furnished the
denomination of currency, reasons for increase in turnover
along with cash deposited by the assessee. The assessee
also furnished summary of total cash deposits during
various periods along with month-wise purchase and sales,
etc. The list of parties to whom sales were made,
realizations of amounts received from the parties including
ITA No.266/Chny/2022 :: 7 :: cash sales of mobile recharge coupons was also furnished.
The details were e-filed before the Assessing Officer under
acknowledgment. The Ld. AR submitted that all the
purchases were made by the assessee through banking
channels and the products sold by the assessee were
covered under VAT/GST which are evidenced by the
returns filed under those acts. According to Ld. AR, the
assessment order alleging that details were not submitted
was not factually correct.
The Ld. AR also submitted that the audited books of
account and Chartered Accountant’s Report in Forms 3CB
and 3CD were filed to the Assessing Officer during the
assessment proceeding and the Assessing Officer did not
point out a single defect in the accounts. He also disputed
the finding of the Assessing Officer that Rs.1,94,24,247/-
is the demonetized currency. His claim is that demonetized
currency is only for Rs. 36,29,500/-.
ITA No.266/Chny/2022 :: 8 :: 14. On the other hand, the Ld. DR has supported both the
assessment order as well as the order passed by the Ld.
CIT-(A). He submitted that the assessee failed to submit
the requisite details in support of its claim.
After hearing both the parties and upon perusal of
relevant material on record, we observe from the
assessment order that the Assessee has submitted the
requisite details including submissions as pointed out by
Ld. AR. It appears that the reply furnished by the
assessee was examined partially by lower authorities which
is clear from the body of assessment order as well as
impugned order. The Assessing Officer did not state in the
assessment order how the materials submitted by the
assessee were inadequate regarding the source of cash
credit. In our view, if the materials submitted by the
assessee were inadequate in ascertaining the source of
cash deposit, the Assessing Officer ought to discuss the
same in the assessment order. The Ld. CIT(A) has merely
ITA No.266/Chny/2022 :: 9 :: endorsed the view of Ld. A.O without rendering any
independent findings.
In view of the above stated facts, we deem it fit to set
aside the impugned order and remand the matter back to
the Assessing Officer for passing a fresh assessment order
on the impugned issues. Needless to add that the
Assessing Officer will give reasonable opportunity of
hearing to the assessee. The assessee, in turn, is directed
to substantiate its claim.
In the result, appeal filed by the assessee is allowed
for statistical purposes.
Order pronounced on the 28th day of April, 2023, in Chennai.
Sd/- Sd/- (मनोज कुमार अ�वाल) (मनोमोहन दास) (MANOMOHAN DAS) (MANOJ KUMAR AGGARWAL) �याियकसद�य/JUDICIAL MEMBER लेखासद�य/ACCOUNTANT MEMBER चे�ई/Chennai, �दनांक/Dated: 28th April, 2023. TLN
ITA No.266/Chny/2022 :: 10 :: आदेशक��ितिलिपअ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 4. आयकरआयु� (अपील)/CIT(A) 3. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF