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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI RAJPAL YADAV & SHRI WASEEM AHMED
आदेश / O R D E R
PER SHRI RAJPAL YADAV, JUDICIAL MEMBER :
The Assessee is in appeal before us against the order of Ld.Commissioner of Income Tax(Appeals)-10, Ahmedabad [‘CIT(A)’ in short] dated 17/12/2018 passed for Assessment Year (AY) 2014-15.
The assessee has pleaded that Ld.CIT(A) has erred in confirming addition of Rs.54,68,135/- in an ex-parte order. The addition has been made by the Assessing Officer with the aid of section 69 of the Act on Shri Hasmukh Prabhulal Mehta vs. ITO Asst.Year – 2014-15 - 2 - account of unexplained investment in depositing the amounts in savings bank account.
The ld.counsel for the assessee, at the very outset, submitted that the assessee has filed an adjournment application pleading therein that hearing may be adjourned for 3 – 4 days as office staff is engaged in marriage function today. He placed copy of application filed on 13/12/2018 which has duly been received in the office of the ld.CIT(A).
On the other hand, ld.DR contended that CIT(A) has given sufficient opportunities to the assessee. He failed to explain the source of deposit. Under the compelling circumstances, ld.CIT(A) has to adjudicate the appeal.
We have duly considered the rival contentions and gone through the record carefully. While considering the appeal of the assessee, ld.CIT(A) has made following observations:- “After considering all the facts and circumstances of the case and all the material available on record, I hold that the AO was justified in making addition of Rs.54,68,135/- since there is no substance in the contention of the appellant regarding source of above credit entries. The appellant has made several contentions. However, no explanation or contention is supported by credible evidence. The appellant has not given any working of deposits and withdrawals from the bank. Further, through the appellant submitted he was into business of selling cloth on a small scale, but no proof of the same was filed either before the AO or Shri Hasmukh Prabhulal Mehta vs. ITO Asst.Year – 2014-15 - 3 - during the appeal proceedings. Further, it is seen that two letters were filed before the AO whereby confirmation has been given regarding deposit of Rs.3,00,000/- by cheque from Shri S.P. Thakkar & Associates, Ahmedabad and for deposit of Rs.2,50,000/- by cheque from Shiv Chrome Pvt.Ltd. A perusal of these letters shows that these have been signed by the same person. Also, PAN of these parties has not been mentioned on these letters. All in all the appellant failed to file credible evidence to explain the deposits of Rs.54,68,135/- in his bank account. Accordingly, the AO was justified in making addition of Rs.54,68,135/- u/s.69 of the Act. Accordingly, addition of rs.54,68,135/- is upheld. This ground of appeal is rejected.
In the result, the appeal is dismissed.”
6. Sub-section(6) of section 250 contemplates that CIT(A) would state the points in dispute and thereafter record reasons in respect of those conclusions. A perusal of the finding of the ld.CIT(A) reveals that assessee failed to substantiate its contention regarding source of credit entries in his bank account. He failed to give working of deposits and withdrawals from the bank. Qua this finding, we are of the view that since there was a marriage in the office of the tax consultant of the assessee and tax-consultant has filed adjournment letter. This fact must have not been brought to the notice of the assessee that ex-parte proceedings would be taken up against him. The assessee should be more vigilant in doing the income-tax proceedings, but if we weigh the scale regarding punishment in the shape of tax liability, vis-a-vis negligence of the assessee would tilt in favour of assessee, because
Shri Hasmukh Prabhulal Mehta vs. ITO Asst.Year – 2014-15 - 4 - punishment is disproportionate to the negligence. The ld.first appellate authority ought to have granted one more opportunity to the assessee.
Considering the above aspect, we deem it appropriate to set aside the impugned order of the CIT(A) and remit these issues to the file of ld.CIT(A) for fresh adjudication.
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 13 -01-2020 at Ahmedabad.