AJAY CHANDRAKAR, DHAMTARI,DHAMTARI vs. DCIT, CIRCLE-1(1), RAIPUR, RAIPUR

We have heard both the parties and perused the records. In this case, the assessee had filed return of income electronically on 21.10.2013 for AY 2013-14 declaring total income at Rs.33,71,940/-. The assessee was an MLA during the AY 2013-14 as per the submission reproduced in the assessment order.

There were cash deposits of Rs.52,25,000/- in bank account. The assessee submitted that cash deposits were out of withdrawal and cash receipt from sale of car. However, the Assessing Officer (AO) made addition of Rs.35,75,000/-. The AO also made addition of Rs.3,46,253/- on account of difference in the rent.

Aggrieved by the assessment order, the assessee filed an appeal before the Ld. CIT(A). The relevant paragraphs of the order of the Ld. CIT(A) are reproduced here as under : “5.2.1. The AO, after examining bank statements and cash flow workings, concluded that total deposits of Rs. 52,25,000/- was made on 9 consecutive days. The claim of the opening cash by the appellant is unsupported by any documentary evidence. Several withdrawals were made despite alleged possession of large cash, defying commercial sense. Further, the claim of receiving Rs. 10,00,000/- from sale of car was unsupported by any documentary evidence. After considering the submission of the appellant during the course of assessment proceedings, the AO accepted Rs. 16,50,000/- as explained, treating the balance Rs. 35,75,000/- as unexplained u/s.69A of the Act. The case laws relied upon by the appellant are distinguishable on the facts of the case as in those cases, proper books of account were maintained; Cash book entries were independently verifiable. However, in the present case no regular books were maintained; the so-called "cash book" is reconstructed by the P.A. of the appellant years later without any evidentiary support. No evidence was produced to justify keeping cash at home for long periods. The appellant has failed to substantiate the source of Rs. 35,75,000/- with credible evidence. The AO's reasoning is detailed, logical, and supported by judicial principles. Accordingly, ground no. 2 raised by the appellant is hereby dismissed. 5.3. Vide ground no. 3, the appellant has contended against the addition of Rs. 3,46,253/- on account of difference of rental income as per Form 26AS and as shown in return of income. Form 26AS reflects rent paid by CG State Warehousing Corporation at Rs. 20,77,528/-, with TDS of Rs. 2,16,191/- deducted and claimed by appellant. However, the appellant declared only Rs. 15,82,880/- as rental income. The AO added the difference after granting 30% deduction. The appellant claims that rent was offered on a "due basis" and reconciliation was filed. However, the appellant claimed full TDS on Rs. 20.77 lakh, thereby acknowledging receipt/receivability of the entire rent. No evidence was produced to show that part of the rent was not receivable or subsequently reversed.” 5. Thus, both the AO and the Ld. CIT(A) has mentioned that claim of opening cash was unsupported by any documentary evidences. During the hearing before this Tribunal, the Ld. AR pleaded that one more opportunity may be provided to the

Since, the assessee had filed additional evidences and the Ld. AR also pleaded to provide one more opportunity to file necessary documents regarding both the additions, in the interest of justice, we set aside the assessment order to the AO for de-novo adjudication. The AO shall provide opportunity to the assessee. The assessee shall be allowed to file all the necessary documents. Accordingly, the appeal of the assessee is allowed for statistical purpose.

In the result, the appeal of the assessee is allowed for statistical purpose.