M/S NLIN TRADERS PVT LTD.,NASHIK vs. DCIT 13 (1)(1), MUMBAI

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ITA 195/MUM/2020Status: DisposedITAT Mumbai22 February 2022AY 2011-123 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the addition under Section 68 was unsustainable as the nature of the transaction (cash/non-cash, debit/credit) was not specified. The CIT(A) also failed to consider relevant High Court decisions.

What were the facts?

The assessee's income was reopened based on information about a cash deposit in a current account. Notices were not complied with, leading to an ex-parte order and addition under Section 68. The CIT(A) confirmed the addition without properly considering the assessee's objections or relevant case laws.

What were the issues?

Whether the reopening of assessment and the ex-parte order under Section 144 were valid, and whether the addition under Section 68 for cash deposits in a current account was justified without specifying the nature of the transaction.

Which sections of the Income-tax Act were involved?

Section 144,Section 68,Section 143(1)

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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai

For Appellant: Shri Varun Sharma
For Respondent: Shri Abhiram Karthikeyan
Hearing: 15.12.2021

Heard together (2 matters)

I.T.A. No. 195/Mum/2020
I.T.A. No. 196/Mum/2020

Read from the judgment's own cause title. This page is filed under one of them.

These are appeals by the assessee against respective orders of learned CIT(A) for concerned assessment years. Since the issues are common and connected and appeals were heard together, these are consolidated and disposed of by this common order.

2.

Common issue raised in these appeals pertains to challenge to reopening and passing of ex-parte order under section 144 of the I.T. Act. On merits the issue challenged is addition under section 68 of amount of cash deposited in current account for Rs. 15,50,000/- for A.Y. 2011-12 and Rs. 6,50,000/- for A.Y. 2012-13. For the sake of reference I am referring to A.Y. 2011-12.

3.

Brief facts of the case are that earlier return of income was processed under section 143(1) of the Act on 25.7.2012. The same was reopened as information was received from Assistant Director of Income Tax (Inv), Mumbai that the assessee-company has opened a bank account and in the said current account there is cash/non-cash transaction to the tune of Rs. 15,50,000/-. Notices issued to the assessee were not complied with, the Assessing Officer

2 M/s. Nalin Traders Pvt. Ltd. proceeded to pass an ex-parte order under section 144 of the Act. The Assessing Officer added the sum of Rs. 15,50,000/- holding that the assessee has not furnished details pertaining to financial transaction of Rs. 15,50,000/. Assessee’s challenged to reopening was dismissed by learned CIT(A), wherein ld.CIT(A) did refer that assessee has relied upon certain case laws but he did not deal with any of them. He referred to case certain other laws in rejection of reopening.

4.

As regards merits also he confirmed the order of the Assessing Officer. He noted that the assessee has raised objection but did not refer what was the objection raised by the assessee. He referred that incriminating material was found by the Assessing Officer. I noted that this is totally unrelated issue. There is no whisper of any incriminating material by the Assessing Officer. This seems to have been cut and paste from some other order.

5.

Further, before me learned Counsel of the assessee submitted paper book explaining transactions which were also claimed to have been submitted before learned CIT(A).

6.

Upon careful consideration and hearing both the parties, I note that the addition in this case is financial transaction of Rs. 15,50,000/- in the current account. There is no mention as to what is the credit, what is the debit, what is cash transaction and what is non-cash. Without specifying anything the addition of entire transaction is totally unsustainable u/s. 68. Without specifying the nature of transaction of debit or credit, such an addition is not sustainable. Moreover, learned CIT(A) has not at all considered decision of Hon'ble Jurisdictional High Court in the case CIT vs Baichand N. Gandhi 141 ITR 67. Hence, in my considered opinion interest of justice will be served if matter is remitted to the Assessing Officer. The Assessing Officer should consider the issue afresh by taking into account details now being submitted by the assessee and case laws and my observation hereinabove.

3 M/s. Nalin Traders Pvt. Ltd.

7.

In the result, these appeals by the assessee stand allowed for statistical purposes.

Order pronounced in the open court on 22.02.2022

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