SRI.VIJAYAN NANOO,KARUNAGAPALLY vs. THE ITO, WD-5, ALAPPUZHA

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.

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.

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above assessee may be treated as withdrawn.

Revenue in ITA No. 63/Coch/2018 as withdrawn.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.

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.

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.

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/-.

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.

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.

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