INCOME TAX OFFICER-41(2)(4), MUMBAI vs. ZAIULLABDDIN GOUSAHEB KOCHARGI, MUMBAI
| आयकर अपीलीय अिधकरण ायपीठ, मुंबई |
IN THE INCOME TAX APPELLATE TRIBUNAL
“G” BENCH, MUMBAI
SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER
&
BEFORE SUNIL KUMAR SINGH, HON’BLE JUDICIAL MEMBER
I.T.A. No. 5253/Mum/2024
Assessment Years: 2017-18
Income Tax Officer-41(2)(4), Mumbai
Vs
Zaiullabddin Gousaheb
Kochargi, Mumbai
Room No. 1
Jaysingh Chawl No. 2
Hariyali Village, Vikhroli East
Maharashtra - 400083
[PAN: AGJPK3730G]
अपीलाथ/ (Appellant)
यथ/ (Respondent)
Assessee by :
Shri Ganesh Shetty, C.A.
Revenue by :
Shri Bhangepatil Pushkaraj Ramesh, Sr. A/R
सुनवाई की तारीख/Date of Hearing : 09/01/2025
घोषणा की तारीख /Date of Pronouncement: 13/01/2025
आदेश/O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the revenue is preferred against the order dated
13/08/2024 by NFAC, Delhi [hereinafter ‘the ld. CIT(A)’] pertaining to AY 2017-18. 2. The grievance of the revenue read as under:-
“1. Whether on facts, in circumstances of the case and in law, learned CIT(A) erred in admitting the additional evidences violating Rule 46A without granting proper time for submission of remand report.
Whether on facts, in circumstances of the case and in law, learned CIT(A) erred in deleting the addition of Rs. 3,17,40,300/- without appreciating the fact that the assessee failed to provide any evidence w.r.t. source f cash deposits during the course of assessment proceedings.
Whether on facts, in circumstances of the case and in law, learned CIT(A) erred in admitting the fact that the assessee failed to prove the identity of the parties namely Karuna Egg Centre and Mohd Naseeruddin during the course of assessment proceedings as well as remand proceedings.
I.T.A. No. 5253/Mum/2024
The appellant craves leave to add, alter, modify or delete any of the above Grounds of appeal.”
Briefly stated the facts of the case are that the assessee filed his return of income electronically on 08/02/2018 declaring total income of Rs. 2,30,620/-. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. 4. During the course of scrutiny assessment proceedings, the AO noticed that the assessee has made cash deposits of Rs. 3,17,40,300/- in his bank account maintained with Hindustan Co-operative Bank Ltd., Vikroli Branch, Mumbai. Details were directly called from the bank and the bank submitted the bank statement in respect of the bank account of the assessee. The assessee was asked to submit the detailed summary of cash deposits along with the source of funds with documentary evidence. 4.1. The assessee explained that he was in the business of trading in eggs and sales are made in cash and the said cash recovered on sale of eggs have been deposited in the bank. 4.2. The AO found that the total sales recorded during the preceding year was only Rs.60.54 Lakhs whereas during the year the sales suddenly increased to Rs. 4.60 Crores. The AO observed that the assessee had failed to furnish the details of customers and persons to whom sales were made on cash basis. 4.2.1. Notice u/s 133(6) of the Act were issued to two suppliers from whom the assessee has claimed to have made huge purchases of eggs during the year, namely, Karuna Egg Centre and Mohd. Naseeruddin. Notice issued to Karuna Egg Centre, returned unserved and no reply has been received from Mohd. Naseeruddin. The AO proceeded by I.T.A. No. 5253/Mum/2024
making addition of Rs. 3,17,40,300/- being unexplained cash deposited and further added Rs. 4,45,465/- on account of expenses.
4.3. The assessee carried the matter before the ld. CIT(A) and furnished ledger confirmations from supplier Karuna Egg Centre and also furnished other details. It was explained that the assessee had started wholesale trade in eggs purchasing from Hyderabad from FY
2015-16 and hence the gross profit has been reduced from 21.92% to 11.41%. The overhead expenses have also increased.
5. The ld. CIT(A) called for a remand report from the AO vide letter dated 03/06/2024, in order to verify the evidence produced by the appellant. However, no remand report was received from the AO and on the basis of the details submitted by the assessee, the ld. CIT(A) deleted the impugned additions.
6. We have given a thoughtful consideration to the orders of the authorities below. It is true that full compliance was not made by the assessee during the assessment proceedings. It is equally true that the ld. CIT(A) called for a remand report from the AO calling for the details of the verification of the evidence furnished by the assessee.
7. We are of the considered view that since the ld. CIT(A) was not burdened by any time bearing pressure, he ought to have waited for the remand report by issuing reminders. Since there is no mention in the body of the order of the ld. CIT(A) that, he himself has examined
/verified the documents furnished by the assessee nor is there any whisper of any verification from the two suppliers by the ld. CIT(A), the issue needs to be verified at the assessment stage. Therefore, in the interest of justice and fairplay, we restore the issue to the file of the AO.
The assessee is directed to furnish all the necessary documents in I.T.A. No. 5253/Mum/2024
support of the cash deposits in his bank account and further furnish the recent address of the two parties and the AO is directed to verify the documents and decide the issue afresh as per the provisions of the law.
8. In the result, appeal of the Revenue is allowed for statistical purposes.
Order pronounced in the Court on 13 January, 2025 at Mumbai. (SUNIL KUMAR SINGH)
ACCOUNTANT MEMBER
Mumbai, Dated /01/2025
*SC SrPs
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आदेश की ितिलिप अेिषत /Copy of the Order forwarded to :
अपीलाथ / The Appellant 2. थ / The Respondent 3. संबंिधतआयकरआयु" / Concerned Pr. CIT 4. आयकरआयु" ) अपील ( / The CIT(A)- 5. िवभागीय ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड& फाई/ Guard file.
आदेशानुसार/ BY ORDER,