R.SASANKARAIYER FIRM,TIRUNELVELI vs. ITO WARD 4, TIRUNELVELI

At the very outset, we notice that the assessment has been completed on best judgment basis u/s.147 r.w.s. 144 and 144B of the Act by treating the cash deposits of Rs.6,56,32,350/- as unexplained money u/s.69A of the Act, since the assessee neither filed the return of income nor complied with the notices issued by the AO. Further, the First Appellate Authority (FAA) confirmed the addition observing that the assessee had merely made general submissions regarding its sales and business operations without establishing any correlation between the bank deposits and the turnover of the business.

The Ld. AR submitted that the assessee is a registered partnership firm engaged in the retail distribution of automobile fuels as an authorized dealer of Bharat Petroleum Corporation Limited (BPCL). He submitted that the assessment was completed ex-parte as the Managing Partner, being a senior citizen with age- related ailments and impaired vision, was unable to monitor the income-tax portal. The responsibility of attending to departmental notices had been entrusted to an accountant, who failed to respond to the notices issued by the Department. The Ld. AR further submitted that the addition made u/s.69A of the Act pertains to

The Ld.DR submitted that adequate opportunities were provided from the offices of the AO & FAA and there is no violation of principles of natural justice. Therefore, it was submitted that the appeal of the assessee may be dismissed.

We have heard the rival submissions and perused the material available on record. It is an admitted fact that the assessment was completed ex-parte and the addition u/s.69A of the Act was made in respect of deposits appearing in the bank accounts of the assessee. The assessee has filed a petition under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 seeking admission of additional evidence, comprising the BPCL dealership agreement, stock reports, sample invoices, bank statements and day-wise sales details. On perusal of the additional evidences, we find that the same are relevant for examining the nature and source of the deposits and have a direct bearing on the issue under consideration. Since these documents were not available before the AO and require factual verification, in the interest of substantial justice, we admit the additional evidences and deem it fit to restore the matter to the file of the AO. Accordingly, the impugned order is set aside on this issue and the matter is restored to the file of the AO for fresh examination of the evidences. The AO shall decide the issue afresh in accordance with law after providing adequate opportunity of being heard to the assessee. The assessee is

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