DHARTI ZINC,SABARKANTHA vs. ITO, WARD-3, HIMATNAGAR

Registry has pointed out that appeal filed by the assessee is time barred by 101 days. In order to explain the delay, the assessee has filed affidavit of its partner Shri Bhupendrakumar Ramabhai Patel, and accountant Shri Sandipkumar Vinbhai Patel. It is deposed in both the affidavits that father of Shri Sandipkumar Vinubhai Patel was diagnosed with cancer and admitted to civil hospital at Ahmedabad on 24.3.2018. On account of sudden illness of his father he could not come to the office and failed to hand over appeal papers to Shri Kalpit Mehta, CA. According to 2 the deponent Shri Bhupendrakumar R. Patel, this fact came to his notice when Shri Kalpit Mehta called him about non-filing of the appeal against order of the ld.CIT(A).

On due consideration of the above affidavits, along with medical report of Shri Vinubhai Manibhai Patel, father of Shri Sandipkumar V. Patel, we are satisfied that the assessee was prevented by reasonable cause for not filing appeal with the Tribunal within time limit. Therefore, we condone the delay and proceed to decide the appeal on merit.

Now we take appeal of the assessee. Grounds of appeal taken by the assessee are running into six pages. Thus, they are not in consonance with the Rule 8 of the Income Tax (Appellate Tribunal) Rules, 1963 - they are descriptive and argumentative in nature. In brief, grievance of the assessee is that the ld.CIT(A) has erred in confirming the addition of Rs.22,03,288/- and Rs.34,61,500/- which was added by the AO with aid of section 68 of the Income Tax Act.

Brief facts of the case are that the assessee has filed its return of income on 27.09.2013 declaring NIL income. The assessee firm at the relevant time was engaged in manufacturing and trading of zinc oxide. It has achieved turnover of Rs.10.46 crores and GP at 8.69%. On scrutiny of the accounts, it revealed to the AO that the assessee has taken advance of Rs.22,03,288/- from six persons. The details have been noticed on page no.4 of the assessment order. He further found that the assessee has deposited Rs.34,61,500/- in cash on different dates in the bank account with Bank of Baroda, Motipura Branch, Himatnagar. The ld.AO has confronted the assessee for furnishing identity of creditors, genuineness of transaction, and their credit-worthiness with regard to the loan of Rs.22,03,288/-, and with regard to cash deposits in the bank

3 account, he directed the assessee to explain source of such deposits. In response to the query of the AO, the assessee has filed explanation qua each creditor, submitting therein that they have sufficient source of funds out of which they have given above loan to the assessee through account payee cheque. With regard to cash deposit, it was submitted that the assessee has achieved turnover of Rs.10.46 crores in day-to-day business. It required cash which were used for payment to labourers, repair expenses and certain other small factory expenses. Therefore, this cash were deposited through cash book. For sample check, the assessee submitted the cash book. Somehow, the AO was not satisfied with the explanation and made addition. On appeal, according to the assessee, it has submitted its reply through online portal and the evidence to this effect is filed before us. The ld.CIT(A) has observed that the assessee did not make any submission, and therefore, concurred with the AO.

With the assistance of the ld.representatives, we have gone through record. Section 68 of the Income Tax Act contemplates that where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof, or the explanation offered by the assessee is not, in the opinion of the AO satisfactory, then the sum so credited in the accounts may be treated as income of the assessee of that previous year.

A perusal of the record would indicate that out of Rs.22,03,288/-, a sum of Rs.7,61,738/- was received from Brijesh S. Patel. While giving explanation, assessee submitted that he was an employee of the assessee, but currently he is doing job in another company; whenever required, the assessee used to take money from this employee who was trading in agriculture produce also, and the alleged confirmation was also submitted. The AO

In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the Court on 1st October, 2019 at Ahmedabad.