BASATTAPPA B BADAMI,BELGAUM vs. INCOME TAX OFFICER, WARD - 1, BELGAUM

The brief facts of the case are that, the assessee is a partner of the firm of M/s Belgaum Pipes and Tubes and has filed the return of income for the A.Y. 2009-10 on 25.09.2009 disclosing a total income of Rs. 69,390/- and the case was selected for scrutiny under CASS and notice u/sec 143(2) was issued on 23.10.2010. Further there was survey operations u/sec 133A of the Act at the business premises of the firm on 24.08.2011 and statement was recorded in respect of cash in hand and it was explained that Rs..1,05,00,000/- was kept with others and details were called for. Further the A.O dealt on the cash deposits and withdrawals from the bank accounts of the assessee and considered the peak credit and the assessee has offered additional income after calculation of peak credit. The A.O observed that since additional income is offered after survey operations u/sec133A of the Act , the same was brought to tax as unexplained investment U/sec69 of the Act and assessed the total income of Rs.19,49,030/-and passed the order u/sec 143(3) of the Act dated 17-11-2011. Subsequently, the Assessing Officer (A.O) found that the the assessee has claimed the benefit of peak credit without disclosing all material facts completely and the transactions are not related to the common business activities. Hence the A.O has reason to believe that the income has escaped assessment and issued notice u/sec148 of the Act. In compliance to notice u/sec 142(1) of the Act, the assessee has filed explanations in support of claims dealt in the order. Finally the A.O was not satisfied with the explanations in respect of benefit of peak credit availed by the assessee without disclosing the primary proofs and made addition of Rs.64,80,444/-.Similarly, the A.O on verification and examination of facts found that the source to the extent of Rs.25 Lakhs found correct and for the balance of income the assessee the explanations are without basis and evidences and made addition of unexplained money of Rs.50,00000/- and assessed the total income of Rs.1,36,29,474/- and passed the order u/sec 143(3) r.w.s 147 of the Act dated 23.12.2016. 3. Aggrieved by the order, the assessee has filed the appeal before the CIT(A). Whereas the CIT(A) has considered the grounds of appeal, statement of facts, submission of assessee and findings of assessing officer and but has sustained the addition of unexplained money made by the AO and granted relief in other grounds of appeal and partly allowed the assessee’s appeal. Aggrieved by the order of the CIT(A), the assessee has filed the appeal before the Hon'ble Tribunal. 4. At the time of hearing, the Ld. AR submitted that CIT(A) has erred in confirming the action of the Assessing Officer, overlooking the provisions of the Act and submissions in the proceedings and made a addition of hypothetical income which is not supported with any evidence. And the Ld AR substantiated the submissions with factual paper book and judicial decisions and prayed for allowing the appeal. Per contra, the Ld.DR supported the order of the CIT(A). 5. We heard the rival submissions and perused the material on record. The sole crux of the disputed issue envisaged by the Ld.AR that the CIT(A) has erred in sustaining the addition of unexplained money, which is based on statement recorded in the survey operations u/sec133A of the Act without corroborative evidence. Whereas the A.O based on the details submitted by the assessee in the original assessment proceedings, has accepted the sources and completed the assessment u/sec143(3) of the Act. The CIT(A) without providing proper opportunity and overlooked the facts and material evidences has wrongly observed that the assessee has failed to prove the sources and nature/basis of introduction of cash in the books of account of the Partnership firm. The assesse has filed all the details before the lower authorities and the CIT(A) has not considered the documents and information supporting the claim of the assesse. Prima-facie, the CIT(A) has dealt on the findings of the AO and there are no proper findings on the submissions/evidences of the assessee filed in the proceedings referred and has not allowed the grounds of appeal. Therefore, we considering the overall facts, circumstances and principles of natural justice shall provide with one more opportunity of hearing and accordingly restore the disputed issue to the file of the CIT(A) for afresh adjudication on merits and the A.O. shall provide adequate opportunity of being heard to the assessee and the assessee should also cooperate in submitting the information for early disposal of appeal.. And the grounds of appeal of the assessee are allowed for statistical purpose.

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