AMBALAL SHAMBHUDAS PATEL, HUF,BANASKANTHA vs. THE ITO, WARD-1, PALANPUR

The Ld. CIT(A) erred in upholding the action of the Ld. AO in taxing the aforesaid addition under section 115BBE of the Income-tax Act, 1961, in the Assessment Year: 2017-18 - 2– absence of any addition made or sustained under sections 68, 69, 69A, 698, 69C or 69D, rendering the application of section 115BBE untenable in law.

The Ld. CIT(A) erred in invoking Rule 46A of the Income-tax Rules, 1962, despite the fact that no additional evidence was furnished by the assessee and all primary records, including balance sheet, profit and loss account and cash book, were already filed during the assessment proceedings.

The Ld. CIT(A) erred in treating the assessment order for A.Y. 2016-17 and Report of cash Transactions 2016, as additional evidence, despite the same being already on record and merely enclosed with Form No.

Accordingly, the said documents do not constitute "additional evidence" within the meaning of Rule 46A of the Income-tax Rules, 1962, and are therefore outside the scope of Rule 46A.

The Ld. CIT(A) further erred in holding that the assessee failed to furnish requisite evidences during the assessment or remand proceedings, which is contrary to the material available on record.

The Appellant reserves the right to add, alter, amend, or modify any of the grounds of appeal during the course of the appellate proceedings.

The assessee has challenged the addition of Rs.11,58,000/- made on account of cash deposits during the demonetisation period and the consequential application of Section 115BBE of the Income-tax Act, 1961. In the present case, the assessee has clearly explained that the source of cash deposits is out of the opening balance available as on 01.04.2016 amounting to Rs.27,73,988/- plus agricultural income receipts of Assessment Year 2017-18. These amounts were duly recorded in the books of account and form part of the regular cash flow of the assessee. The Revenue has not brought any material on record to disprove the availability or genuineness of such cash balance. Since the availability of opening cash balance stands established from the records, the addition of Rs.11,58,000/- is not sustainable.

In the result, the appeal filed by the assessee is allowed.