BHAVENDRA HASMUKHLAL PATADIA (L/H. HASMUKHLAL PATADIA),AHEMDABAD vs. ITO WARD-1 (1), CUTTACK

Shri Deepak Deepak Shah, ld AR appeared for the assessee and Shri d AR appeared for the assessee and Shri S.C.Mohanty, S.C.Mohanty, Ld Sr. DR appeared for the revenue.

It was submitted by ld AR that the assesse is an individual who It was submitted by ld AR that the assesse is an individual who It was submitted by ld AR that the assesse is an individual who derives income from trading of equity shares, future trading, derives income from trading of equity shares, future trading, derives income from trading of equity shares, future trading, income from brokerage & commission and agricultural income e & commission and agricultural income. It was the submission . It was the submission

P a g e 1 | 5 that the return filed by the assessee came to be processed and the assessment came to be completed u/s.143(3) of the Act on 29.12.2017, wherein, the Assessing Officer treated the cash deposits in the bank account to an extent of Rs.42,32,,795/- out of total deposit of Rs.1,09,10,000/- as the unexplained income of the assessee. It was the submission that the Assessing Officer has not done item to item wise verification of the deposits in the bank account. Consequently, the assessee has also given reply, wherein, the cash flow statement has been shown to the extent of deposits in the bank account. It was the further submission that when the AO has not specifically referred to section 69A of the Act, the only section to which he could have made addition under section 69A of the Act and as the assessee was maintaining his books of account and as the deposits in the bank were shown out of books of account, no addition u/s.69A was permissible. Ld AR drew our attention to the reply filed by the assessee before the Assessing Officer to pages 5 & 9 of the paper book, wherein, the assessee has also submitted the cash flow statement for the financial year 2014-15. It was the submission that the addition as made by the Assessing Officer and confirmed by the ld CIT(A) was liable to be deleted. It was the further submission that the assessee had expired on 5.6.2020 during the pendency of the appeal proceedings before the ld CIT(A). Consequently, the assessee was unable to represent itself as the legal heir did not get notice of the date of hearing.

In reply, ld Sr DR submitted that section 69 could also be considered. It was the submission that what has been produced in respect of cash flow statement, funds flow statement and books of account have never been submitted before the Assessing officer. The notice u/s.143(2) of the Act was issued to the assessee and it was for the assessee to produce the evidence to substantiate his return. Just because, the Assessing Officer has not asked for any particular books of account would not determine for the assessee not to produce the evidence as required to support his return.

We have considered the rival submissions. A perusal of the assessment order in para 1.1 shows that the assessee has produced the computation statement of income, bank statement, copy of ITR and copy of tax audit report. Admittedly, the cash book has not been produced. A perusal of para 2 of the assessment order shows that the Assessing officer has questioned the assessee in regard to cash deposit in State Bank of India account of the assesse to the tune of Rs.1,09,10,000/-. The assessee has explained the said Rs.1,09,10,000/- as withdrawals from the bank and same cash is redeposited in the bank as also sale of agricultural income etc. The Assessing Officer has accepted the sale proceeds of the agricultural income, receipt of advance from sale of land, income of house property and brokerage and commission, etc. A perusal of the bank statement shows that the assessee has deposited Rs.1,09,10,000/- in the bank account and the Assessing Officer is questioning the source of the cash deposit in the P a g e 3 | 5 bank account. Now, the assessee has mentioned that there is gross agricultural income of Rs.40,00,000/- which has resulted into total income of Rs.16,76,505/-. Therefore, if the assessee is able to show that the agricultural income has been put into the bank account, obviously, that would be a source of cash deposit. Thus, as all the details have not been produced before the Assessing Officer, in the interest of substantial justice, the issues needs to be restored to the file of the Assessing Officer for readjudication after granting the assessee adequate opportunity to substantiate his claim. Accordingly, we set aside the order of the ld CIT(A) and restore the matter back to the file of the Assessing officer for readjudication. The assessee shall produce all such evidences, as are required by the AO, to substantiate the cash deposits in the bank. The Assessing Officer shall specifically mention the provisions under which, he proposes to make the addition.

In the result, appeal of the assessee stands partly allowed for statistical purposes.