BRAR FILLING STATION,SRI GANGANAGAR vs. ITO,, SURATGARH

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR

BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 511/Jodh/2023 (Assessment Year 2017-18) Brar Filling Station, Sriganganagar Income Tax Officer, C/o Rajendra Jain Advocate, 106, Suratgarh Akshay Deep Complex, 5th B Road, Sardarpura, Jodhpur PAN:AAPFB0422L Assessee by Shri Rajendra Jain, Adv. And Smt. Raksha Birla, CA(Physical) Revenue by Shri Arvind Kumar Gehlot, Addl. CIT-DR (Virtual) Date of Hearing 03 / 06 / 2026. Date of Pronouncement 12 / 06 / 2026.

ORDER DR. MITHA LAL MEENA, A.M.: This appeal is filed by assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the NFAC/CIT(A)] dated 29.09.2023 with respect to the assessment years 2017-18.

2 ITA No. 511/Jodh/2023 (Assessment Year 2017-18) 1. That on the facts and in the circumstances of the case the Ld CIT (A) grossly erred in upholding the addition made by the Ld AO without analyzing the explanation and evidences in right perspective and judicious manner. 2. That on the facts and in the circumstances of the case the Ld CIT (A) grossly erred in recording the observation and allegation in the appellate order are irrelevant and also contrary to the law. 3. That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in sustaining addition of Rs. 23,74,000/- in respect of cash deposits in the bank account out of sale of petroleum products treating as undisclosed income u/s 68 of the Act. 4. That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in upholding the provision of section 68 of the Act particularly when the sales declared by appellant duly accepted as genuine. 5. That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in holding the cash deposits in the bank account as undisclosed income u/s 68 particularly when the source of such cash was already taxed by the department. 6. That on the facts and in the circumstances of the case The Ld CIT(A) grossly erred in sustaining addition of Rs. 62,198/- out of expenses claimed by appellant. 7. That the petitioner may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing.

3 ITA No. 511/Jodh/2023 (Assessment Year 2017-18) 8. The petitioner prays for justice & relief. 3. Briefly the facts of the case are that the appellant e-filed return of income for AY 2017-18 on 11.10.2017 declaring total income of Rs. 1,46,350/-. The case was selected for scrutiny and order u/s 143(3) was passed on 14.11.2019 determining total income of Rs.25,82,550/-. During the assessment proceeding, the AO found that the appellant has deposited SBN cash of Rs.36,44,500/- in PNB, Gharsana and Rs. 6,50,000/- in The Ganganagar Kendriya Sahakari Bank, Gharsana during the demonetization period. On being asked to explain the source of cash deposited in banks, the appellant submitted before AO that the cash was out of sales of the petrol pump of which the appellant was owner. The AO observed that the appellant was owner of petrol pump operated as retailer of Essar Oil which is not a public sector company. The AO has quoted from the Notification dated 08.11.2016 of Ministry of finance, Government of India that the exemption from purchase of petrol, diesel and gas at the stations operated by Public sector Oil marketing Companies in SBN was only allowed. Since the appellant was owner of Essar oil operated petrol pump, it was not permitted to sale petrol and diesel in SBN cash from 09.11.2016. The AO form the documents

4 ITA No. 511/Jodh/2023 (Assessment Year 2017-18) submitted by the AO noticed that the appellant had Rs.19,20,500 of old SBN notes in cash in hand as on 08.11.2016. The AO gave the appellant benefit of the cash in hand and treated the balance of Rs.23,74,000/- as cash credit u/s 68 of the Income Tax Act. The Ld. AR submitted before the AO that the appellant adjusted his cash book by showing its old SBN as sales of petrol pump before depositing it in bank because otherwise it was banned and of no use. The AO being not satisfied added Rs.23,74,000/- to the total income of the appellant u/s 68 of the Act. The AO found the appellant has claimed kitchen expenses, printing expenses and general expenses of Rs.44,560/-, Rs.5,485/- and Rs.1,99,746/- respectively, from the documents produced by the appellant. The AO disallowed 25% of these expenses which comes to Rs.62, 198/- on estimate basis and again added this to the total income.

During this appeal proceeding various notices were issued fixing hearing on 06.04.2021, 20.07.2023, 25.08.2023 and 08.09.2023.

5 ITA No. 511/Jodh/2023 (Assessment Year 2017-18) The appellant has not complied to various notices and also had not submitted any details/document/evidences in support of his ground of appeals. Therefore, in the pertaining and circumstances of the case, I find no infirmity in the action of the AO in treating cash deposit of Rs. 23,74,000/- as unexplained cash credit u/s 68 and disallowing expenses of Rs. 62,198/- u/s 37 of the Act. In this view of the matter, the decision of the AO is upheld. Consequently, the Grounds raised by the appellant in this appeal are dismissed. 5. The issues raised in ground no. 2 to 6 are not arising out of the impugned order and therefore, dismissed as not maintainable.

6 ITA No. 511/Jodh/2023 (Assessment Year 2017-18) 25.08.2023 and 08.09.2023 which remained non-complied by the appellant, neither any reply nor any detailed documentary evidence in support of the grounds raised before the CIT(A) were furnished, and that these facts has remained non-rebutted by the Ld. AR before us. However, the contention of the Ld. AR Ld. CIT(A) has confirmed the addition without analysing the explanation and evidences in right perspective and judicious manner even without commenting on the details filed by the appellant before the AO, in the course of assessment proceeding in appears to genuine. It is noted that the Ld. CIT(A) has not given any observation or comment on the submissions made by the assessee before the AO and on the observation and finding of the AO made thereof except mere affirmation. We are of the considered view that Ld. CIT(A) has to apply mind and give independent observation on each and every finding of the AO on merits of the case with reference to the submissions made by the assessee during the course of assessment proceedings. The Ld. CIT(A) rejection of appeal exparte merely basing on non-compliance of the notices cannot be approved in the light of the principles of natural justice. He is expected to conduct enquiry and passed reasoned order on the merits of the case under Section 250 of the Act.

7 ITA No. 511/Jodh/2023 (Assessment Year 2017-18) 9. In view of principles of natural justice, appellant deserves one more opportunity of being heard, therefore, we consider it deem appropriate to restore the matter back to the file of the Ld. CIT(A) to decide each ground raised by the assessee in form 35 of the memorandum of appeal on merits of the case after granting sufficient opportunity of being heard and after considering the written submissions furnished by the assessee in the fresh proceedings before him. At the same time the appellant assessee is directed to furnish the requisite details documentary evidence in compliance of the notice issued by the Ld. CIT(A) for the purpose of calling for requisite details to enable him to adjudicate the grounds of appeal on merits of the case.

Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 12 / 06 / 2026. Pritesh Vaishnav PS

8 ITA No. 511/Jodh/2023 (Assessment Year 2017-18) True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

BY ORDER,