BHUMI TYRE SALES CORPORATION ,SURAT vs. ITO, WARD 1, VALSAD

The brief facts of the case are that the assessee did not file its return of income for A.Y. 2017-18. The AO had received an information that the assessee had made cash deposit of Rs. 51,27,500/- in its bank accounts

Aggrieved with the order of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the Learned CIT(A) vide the impugned order and the appeal of the assessee was dismissed. Th

Now the assessee is in second appeal before us. The following ground has been taken in this appeal:

Shri Suresh K Kabra, the Ld. AR of the assessee submitted that the Ld. CIT(A) had dismissed the appeal of the assessee for the reason that no compliance could be made before him and the grounds taken by the assessee were not adjudicated on merits. He, therefore, requested that the assessee may be allowed another opportunity to explain the cash as well as credit deposits by setting aside the matter to the file of the

Per contra, Shri Ajay Uke the Ld. SR-DR, supported the order of the lower authorities. However, he had no objection if the matter was set aside to the file of Jurisdictional AO, for allowing another opportunity to the assessee to explain the credit entries in the bank accounts.

We have considered the rival submissions. It is found that the assessee neither appeared before the AO nor before the Ld. CIT(A). The reason for the repeated non-compliance by the assessee has not been explained. At the same time, the addition for the entire cash deposits as well as credit entries appearing in the bank accounts, as made by the AO, also cannot be justified. The assessee was engaged in the business of trading in tyres and the cash deposits/credit entries in the bank account being part of its turn-over, cannot be ruled out. In the interest of justice, therefore, we deem it proper to set aside the matter to the file of Jurisdictional AO with a direction to allow another opportunity to the assessee to explain cash deposit as well as credit entries in the bank account; subject to payment of cost of Rs.10,000/-, which should be deposited to Prime Minister National Relief Fund within a period of 15 days from the date of receipt of this order. The assessee is also directed to make compliance before the AO in the course of set aside proceeding and produce the evidences and explanation regarding the source of cash deposits and the credit entries in the bank accounts. In case, the assessee does not make compliance, the Jurisdictional AO will have liberty to pass

In the result, the appeal of the assessee is allowed for statistical purpose.