SHRI GAURANGKUMAR JAYSUKHLAL VAKHARIA,,MEHSANA vs. THE INCOME TAX OFFICER, WARD-1,, MEHSANA

This appeal has preferred by the assessee against the order passed by the Ld. CIT (A), Gandhinagar (hereinafter called the ‘CIT(A)’) for Assessment Year 2008-09 wherein, vide the impugned order, the Ld. CIT(A) has upheld addition of Rs. 46,38,137/- pertaining to certain deposits in the assessee’s bank account.

2.0 The brief facts of the case are that the assessee is an individual and derives income by way of commission and share in [Gaurangkumar Jaysukhlal Vakharia vs. ITO] A.Y. 2008-09 - 2 - partnership firm M/s. Gayatri Poly Print. The return of income was filed declaring total income of Rs. 1,10,860/-. Based on Annual Information Report, the Assessing Officer (AO) came to know that the assessee had made cash deposits of Rs. 24,89,850/- in his savings bank account with Kotak Mahindra Bank. Therefore, the assessee’s case was reopened under sec. 147 of the Income Tax Act, 1961 (hereinafter called ‘the Act’).

2.1 In response to the notice under sec. 148 of the Act, the assessee requested that the original return filed by him may be treated as the return filed his compliance to the notice under sec.

2.2 The assessee’s appeal before the Ld. First Appellate Authority was also dismissed by noting that the assessee has not submitted copy of personal cash book, details of Mutual Funds, ledger of cash balance of fund etc. [Gaurangkumar Jaysukhlal Vakharia vs. ITO] A.Y. 2008-09 - 3 - 2.3 Now, the assessee is before the Tribunal (ITAT) against the dismissal of the assessee’s appeal by the Ld. CIT (A) and has raised the following grounds of appeal:-

“1.1 The order passed u/s. 250 on 09.11.2016 for A.Y. 2008-09 by CIT(A)-GNR, confirming addition of Rs. 46,38,137/-, is wholly illegal, unlawful and against the principles of natural justice.

1.2 The Ld. CIT(A) has grievously erred in law and or on facts in confirming the impugned addition without intimating the so-called deficiency in the material produced before him.

2.1 The Ld. CIT(A) has grievously erred in law and or on facts in upholding the cash deposits made during the year in SB account no. 13066 with Kotak Mahindra Bank as undisclosed income and thereby confirming an addition of Rs.46,38,137/- as undisclosed deposits.

2.2 That in the facts and circumstances of the case as well as in law, the Id. CIT(A) has grievously erred in law and or on facts in upholding the cash deposits made during the year in SB account no. 13066 with Kotak Mahindra Bank as undisclosed income and thereby confirming an addition of Rs.46,38,137/- as undisclosed deposits.

3.1 The Ld. CIT(A) ought to have accepted the explanation furnished by the appellant in respect of the cash deposits made in the said bank account.

4.1 Without prejudice to above, the Ld. CIT(A) ought to have allowed credit for the cash withdrawn and re-deposited and thereby restricted the addition to the peak credit.

It is therefore prayed that the addition of Rs.46,38,137/-made by the AO and confirmed by CIT(A) should be deleted.”

3.0 The Ld. Authorised Representative (AR) submitted that voluminous details had been submitted by the assessee before the AO in this regard.

He drew our attention to the copies of various documents filed before the AO and which were placed in the Paper Book. It was the Ld. Authorised Representative’s contention that all the relevant details had been filed before the AO but the same had not been considered in the proper perspective. [Gaurangkumar Jaysukhlal Vakharia vs. ITO] A.Y. 2008-09 - 4 - 4.0 In response, the Ld. Senior Departmental Representative (Sr. DR) emphasized that the Ld. CIT (A) had given a categorical observation that the requisite details were not submitted by the assessee and, therefore, the assessee’s contention regarding cash withdrawal from the firm and deposits in the personal bank account was not acceptable. He also submitted that the Ld. CIT (A) has given a finding that the assessee had submitted details of cash withdrawal only to the tune of Rs. 13,20,000/- whereas the deposits were to the tune of Rs. 24,89,850/-. It was prayed that the assessee’s appeal should be dismissed as no cogent evidences and explanation had been forthcoming from the assessee.

5.0 We have heard the rival submissions and have also perused the material on record. We note that the assessee has filed voluminous details before the AO which are placed in the Paper Book. However, we also note that most of the documents which are submitted in the form of Paper Book are self-generated documents and a co-relation between the withdrawals from the firm and the deposits in the bank account of the assessee is not clearly established. It is also seen from the assessment order that although the cash deposits in the bank were to the tune of Rs. 24,89,850/-, the AO has made an addition of Rs. 46,38,137/-. This plea was raised by the assessee before the Ld. CIT (A) but the same has not been adjudicated by the Ld. CIT (A). Evidently, there is contradiction in the factual aspects of the case and it is also apparent that the assessee has not provided the required information to the lower authorities in a way that the issue could be disposed of. Therefore, on the facts of this case, it is our considered opinion that the issue needs re-examination by the AO. Accordingly, the [Gaurangkumar Jaysukhlal Vakharia vs. ITO] A.Y. 2008-09 - 5 - issue is restored to the file of the AO with a direction to re-examine the issue after giving proper opportunity to the assessee. We also direct the assessee to make all possible endeavor to co-relate the deposits with the withdrawals made from the firm by producing books of account of the partnership firm before the AO rather than filing copy of ledger accounts only. We also direct the assessee to fully cooperate in the assessment proceedings when called upon to do so failing which the AO shall be at liberty to pass the order as per the provisions of law ex-parte qua the assessee.

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

This Order pronounced in Open Court on 28/06/2019