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Before: SMT. P. MADHAVI DEVI
IN THE INCOME TAX A PPELLATE TRIBUNAL HYDERABAD BENCH ‘SMC', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER Assessment Year: 2009-10 Sri Rajendra Prasad vs. Income-tax Officer, Koochana, Warangal. Ward – 1, Warangal. PAN – ACFPK 6191 B Appellant Respondent Assessee by: Shri K.C. Devdas Revenue by: Shri Nilanjan Dey Date of hearing: 11/03/2020 Date of pronouncement: 30 /04/2020 O R D E R
This is assessee’s appeal for the AY 2009-10 against the order of CIT(A) – 3, Hyderabad, dated 15/09/2017.
Brief facts of the case are that the assessee, an individual, deriving income from business, filed his return of income for the AY 2009-10 on 04/01/2010 admitting total income at Rs. 11,59,705/-. The return was initially processed u/s 143(1) of the IT Act and subsequently, the assessment was taken up for scrutiny. During the assessment proceedings u/s 143(3) of the IT Act, the AO asked the assessee to produce books of account and all bank account statements and the assessee produced the same. On verification of the same, the AO noticed that certain cheque deposits and cheque withdrawals were shown as cash deposits and cash withdrawals in the books of account. The AO, therefore, asked to the assessee to explain the cash deposits, but, since the assessee could not explain the same, the AO brought the total cash deposits and cash withdrawals of Rs. 16,92,517/- to tax.
Aggrieved, the assessee preferred an appeal before the CIT(A) along with necessary evidence. The CIT(A) called for a remand report from the AO, who submitted his report dated 22/08/2017. 3.1 The CIT(A) observed that the assessee has submitted re-written cash book, but, as per the new cash book, the assessee was not able to justify the variation between the opening cash balance as per the old cash book and the new cash book. He, therefore, confirmed the order of the AO and the assessee is in second appeal before the Tribunal by raising the following grounds of appeal: “1. The order of the Hon'ble CIT(A) is erroneous in law as well as facts of the case.
2. The Hon'ble CIT(A) ought not to have upheld the action of the assessing officer in treating the cheque deposit of Rs. 1,00,000/- as unexplained cash credit and therefore the assessing ought to have been directed to delete the same.
3. The Hon'ble CIT(A) ought not to have upheld the action of the assessing officer in treating the amount of Rs.10,300/- being cash withdrawal appearing in the bank account as unexplained credit and therefore the assessing officer ought to have been directed to delete the same.
4. The Hon'ble CIT(A) ought not to have upheld the action of the assessing officer in treating the cheque deposit of RsA,80,000/- as unexplained cash credit and therefore the assessing officer ought to have directed to delete the same.
5. The Hon'ble CIT(A) ought not to have upheld the action of the assessing officer in treating the withdrawal of Rs.36,436 as unexplained cash credit and therefore the assessing officer ought to have directed to delete the same. 6. The Hon'ble CIT(A) ought not to have upheld the action of the assessing officer in treating the amount ofRs.10,63,644/- as unexplained cash credit and therefore the assessing officer ought to have directed to delete the same. 7. The Hon'ble CIT(A) ought not to have upheld the action of the assessing officer in treating the interest receipt of Rs.2,137/- as unexplained cash credit and therefore the assessing officer ought to have directed to delete the same. 8. The Hon'ble CIT(A) ought not to have upheld the action of the assessing officer in making total addition of Rs.16,92,517/- as unexplained cash credits without proper appreciation of the facts and therefore, the entire addition of Rs.16,92,517/- is liable to be deleted. 9. Any other ground will be raised at the time of hearing of appeal.”
The ld. counsel for the assessee submitted that the assessee has given all the details before the AO and that actually the deposits and withdrawals were made by cheques only, but, erroneously the same were shown in the books of account as cash deposits and cash withdrawals. He submitted that both the AO and CIT(A) have not considered the issue properly and have made the addition.
The ld. DR was also heard, who supported the orders of revenue authorities.
Having regard to the rival contentions and material on record, I find that in the assessment order, the AO himself mentioned that the cheque deposits and cheque withdrawals were shown as cash deposits and cash withdrawals in the books of account. Therefore, it is clear that there were no cash deposits and cash withdrawals, and, therefore, the amount could not have been brought to tax as unexplained credit.
6.1 As regards the variation in the cash books, ld. counsel for the assessee submitted that the assessee has given all the details and has filed reconciled cash book before the authorities below. I find that the assessee’s contention needs to be verified properly. The assessee has clearly explained as to why the new cash book had to be drawn. The AO, (in the remand report) as well as the CIT(A) have not stated as to why the assessee’s contention for the new cash book is not acceptable. Therefore, I deem it fit and proper to set aside the issue to the file of AO for de-novo consideration in accordance with law after giving the assessee a fair opportunity of hearing. The assessee is directed to cooperate with the AO for speedy completion of the assessment.
In the result, appeal of the assessee is treated as allowed for statistical purposes. Pronounced in the open court on 30th April, 2020.