M/S. MOHAN MOTOR BUSINESS PVT. LTD.,KOLKATA vs. D.C.I.T., CIRCLE-11(1), KOLKATA, KOLKATA

order : October 18, 2023 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 10.01.2023 of the National Faceless Appeal Centre [(hereinafter referred to as the ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The assessee in this appeal has taken the following grounds of appeal: “1. For that the Ld CIT(A) erred in rejecting the ground of appeal of violation of principles of natural justice by the AO by ignoring the submissions of the assessee and passing the order.

2. For that the Ld CIT(A) erred in confirming the addition of cash deposits during demonetization on ground of non-production of any documentary evidences when the cash balance as on 08.11.2016 was duly proved with Assessment year: 2017-18 M/s Mohan Motor Business Pvt. Ltd reference to the audited books of accounts which was sufficient to cover the cash deposits which was supported by audited balance sheet. 3 For that the Ld CIT(A) erred in rejecting the explanation filed by the assessee ignoring the nature and volume of business as automobile dealer, the turnover was more than Rs 210 crores, the sales of the motors cars/two wheelers were covered under VAT, the VAT return was filed and VAT authorities duly accepted the sales where the name and address of the parties was also available, each and every vehicle sold was registered with Motor Vehicle authorities, hence there was no justification to doubt the sales on imaginary grounds.

4. For that the addition made in the disclosed bank account duly reported by the auditor in the TAR was not called for as a matter of routine in all cases simply because the deposit was made during demonetization period.

5. For that the Ld CIT(A) erred in confirming the action of the AO in taxing the assessee by applying section l15BBE of the IT Act 1961 which was not applicable.

6. For that the addition and application of sec 115BBE was not in accordance with law and is liable to be deleted.

7. For that the Ld CIT(A) should have given due weight to the fact that non- compliance on some dates was for sufficient reasons but in any case the books of accounts were duly produced which has not been rejected by the AO and hence the addition was not called for.”

3. A perusal of the above grounds of appeal would reveal that the assessee is aggrieved by the action of the lower authorities in making the addition on account of cash deposits during the demonetization period treating the same as unaccounted income of the assessee.

4. The brief facts of the case are that the Assessing Officer noticed that the assessee had deposited a total amount of Rs.4,25,80,516/- during the demonetization period. However, since the assessee did not respond to the notice issued by the Assessing Officer, therefore, the Assessing Officer treated the entire cash deposits as unexplained cash credits and added the same in the income of the assessee. Assessment year: 2017-18 M/s Mohan Motor Business Pvt. Ltd 5. The ld. CIT(A) confirmed the addition so made by the Assessing Officer. 6. At the outset, the ld. Counsel for the assessee has submitted that during the crucial period, there was no business functions in the premises of the assessee company and that the notices issued by the Assessing Officer through email were not attended to. That notices uploaded by the Assessing Officer in Income Tax site was opened only on 20.11.2019. Further that one of the two directors of the company, Smt. Anju Bajaj was suffering from cancer and other director Shri Pradip Bajaj, husband of Smt. Anju Bajaj, was looking after her and was not in a position to attend his office or the assessment proceedings. The ld. Counsel, in this respect, has brought our attention to the copy of the letter dated 25.11.2019 written by the assessee to the Assessing Officer. Apart from the above stated facts, the assessee has also furnished the balance sheet of the company for F.Y 2016-17. The ld. Counsel has further invited our attention to page 20 of the paper-book which is the details of the Specified Notes and further submitted that the source of the entire cash deposits were duly furnished which the Assessing Officer failed to take note of. He has further submitted that total revenue of the assessee for the relevant year was 210 crores. He has further submitted that even there were duplicate entries which have been wrongly taken into account by the Assessing Officer. He, in this respect, has submitted that though the assessee has furnished all the details before the Assessing Officer, however, the Assessing Officer failed to take into consideration the same. Moreover, due to cancer to one of the directors who was the wife of the other director of the assessee, the earlier notices sent by the Assessing Officer could not be properly responded. The ld.