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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Per CHANDRA POOJARI, AM:
These appeals by the Revenue are directed against different orders of the
CIT(A)-III, Kochi dated 26/10/2014 and pertain to the assessment years 2009-10
and 2010-11.
At the time of hearing of the appeals, none appeared on behalf of the
assessee nor any adjournment petition was received from the assessee.
However, we proceed to decide the appeals and the C.Os after hearing the Ld.
DR.
With reference to Revenue’s appeal in ITA No. 63/Coch/2018, at the time of
hearing, the Ld. DR filed a letter dated 27/09/2018 stating that since the tax
effect involved in the present appeal was less than Rs. 20 lakhs, which is below
the monetary limits prescribed for filing second appeal before ITAT and also, the
conditions laid down as per para 10 of CBDT Circular No. 3/2018 were not
attracted in this case, it was requested that the appeal filed in the case of the
above assessee may be treated as withdrawn.
In view of the above submission, we are inclined to dismiss the appeal of the
Revenue in ITA No. 63/Coch/2018 as withdrawn. The Cross Objection filed by
I.T.A. Nos.63&64/Coch/2018 & C.O. Nos. 39&40/Coch/2018 the assessee in C.O. No. 39/Coch/2018 which is supportive of the order of the
CIT(A) has become infructuous and the same is dismissed as infructuous.
The only ground raised by the Revenue in ITA No. 64/coch/2018 is with
regard to deletion of addition of Rs.1,10,70,500 being unexplained cash deposits
in the cash credit a/c. of the assessee with UCO Bank.
The facts of the case are that on verification of bank statement of A/c. No.
12600 and the assessee firm's bank book of that A/c and cash hook, it was
noticed that the following cash credits were unexplained and not supported by
the cash book:
a. 23.04.2009 Rs.46,20,000 b. 28.04.2009 Rs.10,00,000 c. 08.05.2009 Rs.25,00,000 d. 09.05.2009 Rs. 5,00,000 e. 12.05.2009 Rs. 8,35,000 f. 18.05.2009 Rs. 2,00,000 g. 29.05.2009 Rs. 5,50,000 h. 01.06.2009 Rs. 5,00,000 i. 08.06.2009 Rs. 3,65,500
The Assessing Officer treated these cash deposits as unexplained cash credits.
According to the Assessing Officer, the assessee firm had objected to the
proposal staling that “these are the amounts returned by cash/remitted into our
accounts by our staff”. The Assessing Officer rejected the contention of the
assessee that the amounts figuring at (e), (g), (h) & (i) were deposited by their
partner Mr. M. Hussain out of the funds available with him for the reason that
I.T.A. Nos.63&64/Coch/2018 & C.O. Nos. 39&40/Coch/2018 any cash transaction entered into by the assessee whether cash deposit in bank
or cash withdrawal from bank should be reflected in the cash book. According to
the Assessing Officer, since the cash credits were not reflected in the cash book,
the cash transactions in the assessee’s bank account were treated as
unexplained cash credits and assessed to tax as the business receipts of the
assessee.
Against this, the assessee went in appeal before the CIT(A). Before the
CIT(A) , the assessee submitted that the amounts figuring at (a), (b), (c), (d)
and (f) were received as return of purchase advance outstanding as on
31/03/2010 in the balance sheet by means of direct remittance into the bank
accounts. It was submitted that the amounts figuring at (e), (g), (h) & (i) were
remitted by their partner Mr. M. Hussain out of the funds available in the cash
flow statement filed before the Assessing Officer. The assessee contended that
it does not make any difference even if all these amounts are routed through
cash book. According to the assessee, if there are sufficient sources for the
funds, then there is no case for Revenue to agitate about the manner of bringing
these funds into the books of account of the assessee. The CIT(A) observed
that the assessee had furnished explanation for the deposits made in the bank
account. Therefore, according to the CIT(A), it cannot be said that these credits
were unexplained. The CIT(A) was of the view that the Assessing Officer had
not made any effort to prove that any of the explanations given by the assessee
I.T.A. Nos.63&64/Coch/2018 & C.O. Nos. 39&40/Coch/2018 was incorrect. According to the CIT(A), a substantial amount was claimed to
have been brought in through partner and the partner was available for
examination by the Assessing Officer. In view of the above, the CIT(A) deleted
the addition of Rs.1,10,70,500/-.
Against this the Revenue is in appeal before us.
We have heard the Ld. DR. We find that the order of the CIT(A) is very
cryptic. He has not given the finding what is the exact source of deposits of
Rs.1,10,70,500/-. The burden is on the assessee to explain the above deposits
in the assessee’s bank account. The explanation given by the assessee before
the Assessing Officer was not satisfactory and hence, the Assessing Officer made
the addition. However, the CIT(A) reached the conclusion that it is duly
explained on the basis of the oral argument of the assessee without having any
corroborative material. Therefore, in the interest of natural justice, we remit this
issue to the file of the Assessing Officer for fresh consideration. This ground of
appeal of the Revenue is allowed for statistical purposes.
In the C.O. No. 40/Coch/2018, the assessee has raised the ground that
the CIT(A) erred in dismissing the additional ground that though its premises
were searched, warrant was not issued in the name of the assessee, i.e., M/s.
A.R. Bangles but in the name of M/s. Arafa Jewellers. The CIT(A) dismissed this
I.T.A. Nos.63&64/Coch/2018 & C.O. Nos. 39&40/Coch/2018 ground by holding that the ground raised was time barred. Before us, no
material was placed on record to suggest that warrant was not issued in the
name of the assessee but in the name of M/s. Arafa Jewellers. Hence, we are
not inclined to interfere with the order of the CIT(A). The cross objection of the
assessee in C.O. No. 40/Coch/2018 is dismissed.
In the result, the appeals filed by the Revenue are partly allowed for
statistical purposes and the Cross Objections filed by the assessees are
dismissed. Order pronounced in the open Court on this 13th December, 2018.
sd/- sd/- (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER
Place: Kochi Dated: 13th December, 2018 GJ
Copy to: 1. M/s. A.R. Bangles, Venga P.O., Sasthamkotta, Kollam. 2. The Assistant Commissioner of Income-tax, Central Circle, Kollam. 3. The Commissioner of Income-tax(Appeals)-III, Kochi. 4. The Commissioner of Income-tax, Central, Kochi.. 5. D.R., I.T.A.T., Cochin Bench, Cochin. 6. Guard File. By Order
(ASSISTANT REGISTRAR) I.T.A.T., Cochin
I.T.A. Nos.63&64/Coch/2018 & C.O. Nos. 39&40/Coch/2018