INCOME TAX OFFICER, WARD-1, JORHAT, JORHAT vs. ASHOK KUMAR GUPTA, GOLDEN HEIGHTS BUILDING

Brief facts of the case are that the assessee had filed his return of income for the AY 2018-19 declaring total Income of ₹1,04,06,560/-. The case was selected for scrutiny under Computer Assisted Scrutiny Selection (in short 'CASS') for the reason 'large cash deposits in bank account and statutory notices u/s 143(2) and 142(1) of the Act were issued to the assessee; in reply to which the assessee filed his submissions on the ITBA portal. It was observed by the Assessing Officer (hereinafter referred to as Ld. 'AO') that the assessee was one of the partners in M/s. Sanjay Auto Agency and one of the Directors of M/s. Sanjay Laxmi Motor Co. Pvt. Ltd. As per the information received from UCO Bank, Guwahati Branch, Assam, cash was deposited in the name of the assessee (under his PAN) in the current account of M/s. Sanjay Auto Agency (A/c. No. 00450510000366) amounting to ₹8.77 crore and in current account of M/s. Sanjay Laxmi Motor Co. Pvt. Ltd. (A/c. No. 00450210001875) amounting to ₹84.75 lakhs. The assessee was asked to explain the nature and source of the cash deposits totalling to ₹9,61,75,000/-. The replies submitted by the assessee were considered by the Ld. AO; however, they were found to be unsatisfactory and accordingly the assessment proceedings were concluded by passing an order u/s 143(3) r.w.s. 144B of the Act dated 07.06.2021 after adding a sum of ₹9,61,75,000/- to the total income of the assessee as unexplained cash credit u/s 68 of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who allowed the appeal of the assessee as per his findings as under: “5.1 Ground of appeal no. 1: This ground being general in nature is not adjudicated upon.

2 Ground of appeal no. 2: In this ground, the appellant has challenged the addition made by the AO of Rs. 9,61,75,000/-. 5.2.1 During the course of the assessment proceedings, the appellant submitted documents in the form of cash book, audited financial statements for the concerned FY, source of cash deposits, in respect of both the Firm and the Company, and certificate from UCO Bank stating that it was a mistake to quote PAN of the appellant in the bank accounts of the Firm and the Company and that the said mistake has been rectified. However, the AO proceeded to make the impugned addition as no evidence in respect of cash deposit being disclosed in the hands of the Firm and the Company, as per their audited financial statements, was found. 5.2.2 During the course of the current appellate proceedings, to substantiate its stance, that his PAN was wrongly quoted in the bank accounts of the Firm and the Company by the bank officials and to explain the nature and source of impugned cash deposits, the appellant has brought on record the following documents/explanation: i. Cash book and bank statement of both the entities ii. Their audited sets of financial statements. iii. That both the entities are assessed to income-tax as well as GST and are filing their returns regularly wherein the impugned bank accounts are duly disclosed. iv. Certificate of UCO Bank admitting that there was a mistake in quoting PAN of the appellant in the banks accounts of both the entities and the same has now been corrected. v. For the Firm, the sales reflected for the impugned AY was Rs. 39,81,42,448/- and the cash deposited in its bank account was out of its disclosed cash sales. Similarly, for the Company the sales figure was Rs. 5,88,31,929/-.

3 Ground of appeal no. 3: As the appellant has not added or amended any ground of appeal at the time of hearing, this ground needs no adjudication.

In the result, appeal filed by the appellant is allowed.”

Aggrieved with the order of the Ld. CIT(A), the Revenue has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined.

The Ld. DR submitted that the Ld. CIT(A) had accepted the additional evidence and granted relief to the assessee without calling for ITA No(s). 335/GTY/2025 Assessment Year(s) 2018 the remand report. The assessee had failed to discharge his onus. The Ld. DR relied upon the order of the Ld. AO and requested that the same may be upheld and the order of the Ld. CIT(A) may be set aside. The Ld. AR relied upon the order of the Ld. CIT(A) and submitted that no fresh evidence was filed. He submitted that the assessee is a director in a company as well as a partner of the firm and PAN was quoted in both the accounts due to oversight. It was stated that GST return of income was submitted and cash book was produced. However, his attention was drawn to page 5 paragraph 5.2.2 clause vi of the order of the Ld. CIT(A) as a fresh chart was submitted for both the entities, comparing entries from cash book to bank passbook along with the Tally data of both the entities in PDF format which were not filed before the Ld. AO and the deposits were accepted without calling for a remand report from the AO or even analysing how the same explained the transactions relating to the deposits.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). The Bench was of the view that no proper finding has been given on the legal issue raised by the Revenue as the evidence was accepted without examining the evidence himself or allowing the opportunity to the Ld. AO to examine the evidence and the order of the Ld. CIT(A) in this regard is a cryptic one and cannot be sustained as he has not demonstrated how the cash deposited in the bank account of both the entities were out of the disclosed sales for all the transactions nor the details were sent to the AO for a remand report. Therefore, the order of the Ld. CIT(A) is hereby set aside and the appeal is remanded to him to pass a speaking order on the legal issue raised by the Revenue. Needless to say, the assessee as well as the Ld. AO both shall be given a reasonable opportunity of being heard to make any further submission they want to make and shall not seek unnecessary adjournments and rule 46A of the I.T. Rules, 1962 shall also be followed. Accordingly, the grounds taken by the Revenue in its appeal are partly allowed for statistical purposes.

In the result, the appeal filed by the Revenue is partly allowed for statistical purposes. Order pronounced in the open Court on 13th May, 2026. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 13.05.2026 Bidhan (Sr. P.S.)

CIT-

CIT(DR), Guwahati Benches, Guwahati.

Guard File. //// By order