MORAMKANTI GOPAL REDDY AND OTHERS,HYDERABAD vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6(1), HYDERABAD

सुिवधई की तधरीख/Date of hearing: 26.12.2023 घोर्णध की तधरीख/Pronouncement on: 27.12.2023 O R D E R PER LALIET KUMAR, J.M.

The captioned appeal is filed by the assessee feeling aggrieved by the order of Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC), Delhi dt.11.09.2023 invoking proceedings under section 143(3) of the Income Tax Act, 1961 (in short, “the Act”) for the A.Y 2017-18.

by the assessee read as under : “

1. The order of the learned Commissioner of Income- Tax (Appeals) is erroneous both on facts and in law.

2. The learned Commissioner of Income-Tax (Appeals) erred in deciding the appeal ex parte without providing proper opportunity to the appellant.

3. The learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing officer in treating the cash deposits into the bank account of Rs.40 lakhs as the income assessable u/s 69A of the I.T. Act.

4. The learned Commissioner of Income-Tax (Appeals) ought to have seen that the appellant was in possession of cash which was withdrawn in the immediately earlier past and the same was re-deposited into the bank account.

5. The Assessing officer and the learned Commissioner of Income-Tax (Appeals) did not have any data to show that the amount withdrawn was otherwise utilized and was not available for redeposit into the bank account.”

5.3 Having considered the factual matrix of the case, I find that the assesses had deposited an amount of Rs. 45,00.000/- during the demonetization period in bank accounts. The source of the cash deposit was sought to be explained from an amount of Rs. 48,00,000/- withdrawn from the very same bank accounts Just before the demonetization period. On being asked about the reasons for withdrawal of cash, the assessee replied that the withdrawals were for family requirements However, no nexus was established between the cash' withdrawal and cash deposited. The reply of the assessee was found to be vague by the AO and it did not favour with the AO. The AO, therefore, after considering only the withdrawal of Rs.5,00,0001- made on 07.11.2016 treated the remaining cash deposits of Rs. 40,00,000/- as unexplained money u/s 69A of the Act and taxed the same u/s II5BBE of the Act. I also find that even during the appellate proceedings, the assessee has failed to establish the nexus between the cash withdrawn and cash deposited. No reasons for such huge cash withdrawn have been submitted. In the circumstances, I do not see any reason to interfere with the well reasoned and speaking order of the AO. Therefore the addition of Rs.40,00,000/- made by the AO u/s.69 of the Act is confirmed.”

7.1. From the perusal of the assessment order and the order passed by the ld.CIT(A), it is clear that the assessee has withdrew the amount of Rs.48 lakhs just before the demonetization and thereafter assessee deposited Rs.45 lakhs during the demonetization period. However, the submissions of the assessee withdrawing the amount of Rs.45 lakhs were not considered except withdrawal of 5 lakhs made on 07.11.2016. Thereafter, the Assessing Officer made the addition to the extent of Rs.40 lakhs, which, the ld.CIT(A) confirmed. In the present case, admittedly, the assessee filed bank statements showing the withdrawal of amounts, which can be verified from the bank statements placed before the ld.CIT(A) as well as before us. However, the ld.CIT(A) without verifying the withdrawal of cash in June 2016 and thereafter in October 2016, had confirmed the addition by concluding that cash was not available for deposit in the bank. In our view, the above said documents, more particularly, the bank statements, showing the availability of cash, and other documents filed by the assessee showing the availability of cash and subsequent deposits in the bank account are required to be considered by the ld.CIT(A) before confirming the order passed by the Assessing Officer.

7.2. Since the documents were not considered by the ld.CIT(A) and further the assessee being failed to upload the submissions before the ld.CIT(A), we deem it appropriate to remand back the matter to the file of ld.CIT(A) for passing afresh order after considering the submissions filed by the assessee and after granting due opportunity of hearing to the assessee. Accordingly, the appeal of the assessee is remanded back to the file of ld.CIT(A) with a direction to pass a fresh speaking order after giving due opportunity of hearing to the assessee, in accordance with law. The assessee shall be at liberty to file documents, if any, as required for proving its case and the ld.CIT(A) shall consider such evidences, if any, filed by the assessee. Needless to say, the ld.CIT(A) shall examine those documents / evidence filed by the assessee and also the other documents available on record. Accordingly, the appeal of assessee is allowed for statistical purposes.