UVMAR ENTERPRISES INDIA PVT. LTD.,CHENNAI vs. ITO, CORPORATE WARD-3(3), CHENNAI

Brief facts of the case are that the assessee is a private limited company and has filed its return of income on 31.03.2018 for AY 2017-18, admitting a current year loss of Rs.(-)1,30,490/-. Based on the information available with the department, the AO found that the assessee has made huge cash deposits into the bank accounts held with Axis Bank during the demonetization period. The case was selected for scrutiny, accordingly statutory notices issued to the assessee and by calling for details. In response, the assessee only uploaded an unsigned, unaudited balance sheet and profit and loss account online. In the meanwhile, the AO issued notices u/s.133(6) of the Act and obtained the statement of bank accounts from Axis Bank, T.Nagar Branch and Venkata Narayana Road Branch. On perusal of the statement of bank accounts and documents submitted by the assessee, the AO found that the assessee has made cash deposits of SBNs to the tune of Rs.30,65,575/- in bank account maintained with Axis Bank, Venkata Narayana Road Branch during the demonetization period. Further, the AO observed that the assessee had literally no business activity during the year but there was an inflow of Rs.44,45,800/- into the bank account of the assessee. Since the assessee failed to furnish the details and explanation, the AO concluded the assessment by passing an order u/s.143(3) of the Act dated 04.12.2019 by making additions of Rs.30,65,575/- and amount of Rs.44,45,800/- as unexplained investment u/s.69 of the Act and amount of Rs.140,490/- as disallowance of expenditure.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 03.01.2020.

On perusal of the order of the ld.CIT(A), we observed that ld.CIT(A) has restricted the disallowance to Rs.24,912/- out of total expenditure of Rs.1,55,490/- disallowed by partly allowing the expenditure to the tune of Rs.1,30,578/- and dismissed the other ground raised in respect of addition of Rs.44,45,800/- due to lack of documentary evidence. We find that as observed by the ld.CIT(A), the assessee has failed to produce the complete

The ld.AR submitted that the ld.CIT(A) has passed an order by partly allowing the appeal of the assessee due to lack of documentary evidence of the assessee in the appellate proceedings. Further the ld.AR stated that the Assessing Officer also has passed the assessment order, without any reply filed by the assessee. In view of the above, the ld.AR prayed that the Tribunal may be pleased to set aside the order of ld.CIT(A) and remit the issues to the file of AO by providing one more opportunity. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the AO to complete the assessment proceedings effectively.

Per contra, the ld.DR submitted that the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an order by considering the part submission made by the assessee and the information available with the department and the same has been partly allowed by the ld.CIT(A), NFAC due to the lack of documentary evidence submitted by the assessee during the appellate proceedings. As asserted by the ld.AR the assessee is having the required documents to be furnished before the AO in support of their claim.

In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to frame the assessment order in accordance with law, after providing

In the result, appeal filed by the assessee is allowed for statistical purposes.