SHRI. BISHMIT SINGH CHAWLA,MUMBAI vs. INCOME TAX OFFICER, WARD 41(4)(1), MUMBAI
Income Tax Appellate Tribunal, Mumbai “B” Bench, Mumbai.
Before: Shri Narender Kumar Choudhry (JM) & Shri Omkareshwar Chidara (AM) Bishmit Singh Chawla Coregaon Wine Shop No. II Hanuman Tekdi, Opp. Western Express Highway Goregaon East Mumbai-400 063. Vs. ITO Ward 41(4)(1) Room No. 603 Kautilya Bhavan Bandra Kurla Complex, Bandra-E Mumbai-400 051. PAN : AFAPC7509P
Per Omkareshwar Chidara (AM) :-
In the above cited appeal, the following grounds were raised by appellant before the ITAT :-
1. On the facts and circumstances of the case and in law The Ld. NFAC/
CIT(A) erred in upholding the addition of cash amount of Rs.1,01,79,000/- which is treated as unexplained money of the assessee u/s 69A of the Act and to be taxed as per the provisions of Section 115BBE of the Income-tax Act, 1961. 2. On the facts and circumstances of the case and in law The Ld. NFAC/
CIT(A) erred in upholding the addition of cash amount of Rs.1,01,79,000/- under section 11 5BBE of the Act without considering that same is the part of Books of accounts and tax on the same has been duly paid.
3. On the facts and circumstances of the case and in law the Ld
NFAC/CIT(A) erred in upholding the disallowance of deduction of Rs.1,50,000/- and Rs. 25,000/- which were claimed under section 80C and 80D of chapter VIA of the Act of the Act respectively
4. On the facts and circumstances of the case and in law the Ld
NFAC/CIT(A) erred in initiating the reassessment proceeding under section 147
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5. On the facts and circumstances of the case and in law the Ld
NFAC/CIT(A) failed to consider that reassessment proceeding cannot be initiated in following cases:
a)
No reassessment can be made just to make an enquiry or verification; b)
Reassessment proceeding cannot be initiate merely on the information received from investigation wing; c)
Reassessment proceeding cannot be initiated when the LD AO have reason to suspect and not reason to believe.
On the facts and circumstances of case and law the Ld. NFAC/CIT(A) erred in upholding the assessment order under Section u/s 144 r.w.s 147 and r.w.s 144B of income tax Act without providing any cogent material on which he is relying upon nor giving an opportunity of being heard, which is against the principal of natural justice 7. The Ld NFAC/CIT(A) erred in upholding charging the interest under section 234A 234B 234C and 234D of the Income Tax Act 1961 8. The Ld NFAC/CIT(A) erred in upholding initiation of penalty proceeding under section u/s 271AAC(1) of the Income Tax Act 1961 9. The Ld NFAC/CIT(A) erred in upholding initiation of proceedings under section 270A of the Income Tax Act 1961. Additional Grounds of appeal
On the facts and circumstances of the case and in law the Ld CIT(A)/NFAC failed to condone the delay of 108 days in filing of appeal before the appellate authority without considering that the delay was neither intentional nor deliberate.
On the facts and circumstances of the case and in law the Ld CIT(A)/NFAC erred considering the issue of fresh notice u/s 148 as correct pursuant to Hon'ble Supreme Court decision in "Uol vs. Ashish Agarwal", rather than issuing a fresh u/s 148A(b) as per the provisions of the IT Act under new regime.
Before proceeding to adjudicate the appeal, it is observed that the appeal was filed by the appellant before ITAT with a delay of 108 days. The Ld. AR of the appellant has filed an affidavit signed by appellant in which it was mentioned that the delay occurred due to non-receipt of the said order in his e-mail or physical form. It was stated that they were unaware of the said order until they logged into Income Tax Portal for regular compliance. Once they come to know about the order, an appeal was filed and hence Ld.
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AR pleaded for condonation of delay. The Ld. DR has opposed the contentions of Ld. AR/appellant. After hearing both sides, the Bench has decided to condone the delay as the same is minimal and also there were no malafides. Hence, it is decided to proceed on merits.
The main issue of dispute is that the Ld. AO gave several opportunities to the appellant requiring them to provide the sources of cash deposited during the demonetization period on various dates. The Ld. AO wanted the appellant to upload all the details relating to purchases and sales, copy of 26AS statement, copy of computation of Income alongwith nature and source of cash deposited in their bank account. The appellant gave part replies and not satisfied with the explanation of appellant, entire cash deposited of more than Rs. 1 crore was added by Ld. AO under section 69A of the I.T. Act. It was also mentioned that the appellant has not filed any Return of Income in pursuance of section 148 of the I.T. Act. The Ld. AO made the addition mainly because the appellant could not produce the cash book, purchase and sales ledger, stock register and expenditure claimed in profit and loss account. Since there is no full compliance to the notices issued by Ld. AO, the addition was made.
The Ld. CIT(A) did not condone the delay of 3 months while filing appeal before him and dismissed the appeal.
Aggrieved by the orders of Ld. AO and Ld. CIT(A), the appellant filed an appeal before ITAT with the grounds of appeal mentioned in the page No. 1&2 of this order.
During the hearing proceedings before ITAT, Ld. AR of the appellant filed voluminous details of cash deposited in bank and stated that the appellant is in the retail trade of wines and all customers buy the stock by cash. The cash sale proceeds were deposited in the bank account and hence the cash deposited cannot be treated as “Unexplained money” under section 69 of the I.T. Act. The Ld. AR of the appellant requested this Bench to Bishmit Singh Chawla
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remand the matter to Ld. AO, so that all details would be submitted, especially the sources of cash deposited in the bank account alongwith documentary evidence of sales register, stock register etc.
The Ld. DR has opposed the remanding the matte5r to Ld. AO as sufficient opportunities were given to appellant.
Heard both sides. It is observed from the assessment order that the Ld. AO at page 10 top has held that an amount of Rs. 3,34,20,215/- cash deposited in bank account was not explained. But, at para 3, page 10 of assessment order, it is observed that show-cause notice was given and an amount of Rs. 1,01,79,000/- was only added. This is brought to the notice of Ld. AO. Similarly, there is no response from Ld. AO about the proof of documentary evidence with respect to claims made under section 80C of the I.T. Act to the extent of Rs. 1.75 lakh and hence this amount also was added while completing the assessment under section 144 r.w.s. 148 of the I.T. Act. Voluminous details were filed by the appellant before Bench shows cash was deposited into bank account. But, the appellant has to still prove the same with the audited accounts, purchase and sale register etc. that the cash deposited is out of cash sales and the same is properly accounted. Hence, as requested by Ld. AR of appellant, one more opportunity is given to the appellant to produce all details of cash deposited in bank account and proof of claim under section 80C of the I.T. Act, the matter is remanded to the file of Ld. AO.
The appeal of appellant is allowed for statistical purposes. Order pronounced in the open Court on 29/08/2025. (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER
Bishmit Singh Chawla
Copy of the Order forwarded to :
The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.
BY ORDER,
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