IDRIS ISHAQ KHAN,MUMBAI, INDIA vs. COMMISSIONER OF INCOME-TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, DELHI

The assessee is aggrieved by the decision of the learned CIT(A) in confirming the addition of Rs. 94,09,000/- made by the under section 69A of the I.T. Act.

None appeared on behalf of the assessee and we noticed that the Notice of hearing sent by the Registry by registered post has been returned back by the postal department with the noting ‘Not known’. Hence, we proceed to dispose of the appeal ex-parte, without presence of the assessee.

We heard learned DR and perused the record. The facts relating to the issue are that the Assessing Officer noticed that the assessee has made cash deposits aggregating to Rs. 94.09 lakhs during the demonetization period in three bank accounts maintained by the assessee with Bharat Cooperative Bank Limited. Hence, the return of income filed by the assessee for the year under consideration was taken up by the Assessing Officer for scrutiny. In response to the notice issued by Assessing Officer calling for the sources for making above deposits, the assessee furnished only computation of income, copy of ITR, audit report and his bank statement. Thus the assessee did not furnish any reply with regard to the sources of deposits and hence the Assessing Officer assessed the above said cash deposits of Rs. 94.09 lakhs as his unexplained income under section 69A of the Act. The Assessing Officer also levied tax under section 115BBE of the Act @ 60%.

Before the learned CIT(A), the assessee submitted that he is doing business of chicken and chicken meat and he did not maintain proper books of account in order to meet various requirement of law. He submitted that the deposits have been made out of his regular business transactions. Accordingly he prayed that the addition made by the Assessing Officer may be deleted. However, the learned CIT(A) took the view that the assessee has challenged the order of the Assessing Officer on the ground of not getting adequate opportunity form the Assessing Officer and further the assessee has not furnished any evidence like cash book and other books maintained for pre and post demonetization period to prove his level of cash sales. Accordingly the learned CIT(A) confirmed the addition made by the Assessing Officer.

Having regard to the facts and circumstances of the case, we are of the view that the learned CIT(A) has dismissed the appeal of the assessee without properly considering the explanations furnished by him. We notice that the assessee has not furnished proper documentary evidences to prove the 3 Idris Ishaq Khan source of cash deposits made into his bank account. Before the learned CIT(A), the assessee has claimed that the cash deposits were made out of his regular business transaction but did not furnish any document to support the same. The assessee has claimed that he is operating in unorganized sector and has not been properly assisted. Accordingly, in the facts and circumstances of the case and in the interest of natural justice, we are of the view that the assessee may be provided with one more opportunity to explain properly his case before the AO. Accordingly we set aside the order passed by the learned CIT(A) and restore all the issues to the file of the Assessing Officer for examining the claim of the assessee. We also direct the assessee to furnish necessary information and explanations before the Assessing Officer with regard to his claims.

In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 29.11.2022.