MADENAHALLI CHANNABASAVAIAH RAVISH,TUMKUR vs. THE INCOME TAX OFFICER, TUMKUR

The brief facts of the case are that the assessee is an individual and doing the business of Copra and Arecanut. He has not filed his return of income. Based on the information that the assessee had deposited cash into his IDBI bank account the AO had initially issued a notice u/s. 148A(b) of the Act on 24/01/2023. Subsequently, an order u/s. 148A(d) was made on 21/03/2023. Notice u/s. 148 was also issued. The assessee filed his return of income on 20/04/2023 declaring a total income of Rs. 1,92,300/-. During the assessment proceedings, the assessee explained that he obtained a loan of Rs. 13,44,000/- from the IDBI bank and withdrawn the said amount on the same day. The assessee also explained that the Arecanut was sold on 27/09/2018 and the said money was deposited into his bank account to repay the loan. The assessee also produced the details of the buyers. The AO had not accepted the explanation and confirmed the said deposits as unexplained income u/s. 69A of the Act.

As against the said order, the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) also confirmed the order of the AO.

As against the said order, the present appeal has been filed by the assessee before this Tribunal.

At the time of hearing, the Ld.AR submitted that the assessee is declaring his income u/s. 44AD of the Act and therefore he has not maintained the books of accounts. The Ld.AR further submitted that the assessee had explained the source for the cash deposits but the AO without conducting any enquiry, had made the assessment u/s. 69A of the Act. The Ld.AR also placed an alternate argument and also challenged the assessment order framed by the JAO instead of the FAO. The Ld.AR also filed a paper book enclosing the bank statements, details of the buyers and the confirmation letters given by the said buyers and prayed to allow the appeal.

The Ld.DR submitted that the assessee had not produced any supporting documents such as books of accounts and submitted that the new document now filed in the paper book for the first time before this Tribunal should not be entertained and prayed to dismiss the appeal.

We have heard the arguments of both sides and perused the materials available on record.

The assessee had deposited cash into his bank account and also explained the source for the said cash deposits. The assessee also furnished the details of the buyers. The AO as well as the Ld.CIT(A) had not accepted the case of the assessee. Admittedly, the assessee has declared his income u/s. 44AD of the Act and therefore he need not maintain the books of accounts. Anyhow the assessee furnished the details of the buyers from whom he has received cash but the AO had not conducted any further enquiry with the said buyers. Before us, the assessee is producing the confirmation letters given by the buyers. These letters were not produced before the lower authorities.

In such circumstances, we are inclined to set aside the orders of the lower authorities and remit the issue to the AO for deciding the issue afresh, in the light of the confirmation letters given by the buyers and thereafter pass orders in accordance with law. In the remand proceedings, the AO shall also grant an opportunity of being heard to the assessee. Since the issue on merits is remanded back to AO to decide afresh, the other grounds, including legal grounds, are not adjudicated.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 07th October, 2026.