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Facts
The assessee filed a return declaring income and agriculture income, and the case was selected for limited scrutiny to verify cash deposits. The assessee failed to provide satisfactory explanations or documentary evidence to the AO regarding cash deposits made in bank accounts during the demonetization period.
Held
The Tribunal held that the authorities below had not considered the records/evidences in detail and therefore, the entire issue in dispute is remitted to the file of the AO for fresh adjudication. The assessee is directed to cooperate and furnish necessary documents.
Key Issues
Whether the CIT(A) was justified in not admitting additional evidence and upholding the addition for unexplained cash deposits, and whether the matter should be remanded to the AO for fresh consideration.
Sections Cited
69A, 115BBE, 143(3), 250, 46A(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the Order of the learned CIT(A)/NFAC vide DIN and Order No. ITBA/ NFAC/S/250/2024-25/1069164225(1) dated 27.09.2024 for the Assessment Year (in short “AY”) 2017-18 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’).
The assessee has raised the following grounds of appeal:
Additional grounds:
3. We have both the parties on admission of additional grounds raised by the assessee. In our opinion, all the facts are already on record and there is no necessity of investigation of any fresh facts for the purpose of adjudication of above grounds. Further, we found that the additional grounds raised by the assessee are on legal validity of the impugned order. Accordingly, by placing reliance on the judgement of Hon’ble Supreme Court in the case of NTPC Vs. CIT (229 ITR 383) (SC) we inclined to admit the additional grounds for the purpose of adjudication and as there was no investigation of any fresh facts otherwise on record and the action of the assessee is bonafide.
4. Now the brief Facts of the case are that the assessee filed return of income on 20.06.2017 declaring income of Rs.12,330/- and agriculture income of Rs.17,16,320/-. The case was selected under CASS under Limited scrutiny to verify "the Cash deposit during the year". In response to several statutory notices issued by the AO, the assessee did not submit any response. Therefore, a show cause notice was issued to the assessee asking why the cash deposits made in SBI Bank (Old SBM) amounting to Rs.27,15,000/- and Canara Bank Sri T. Rajesh (HUF), Shivamogga Page 4 of 6 amounting to Rs.9,67,000/- should not be brought to tax. In response, the assessee filed a letter on 19.12.2019 stating that the cash deposits were out of agricultural income and cash withdrawal from bank. However, the assessee did not give the details of crops sold, sale bills, details of persons/firms to whom the agricultural crops were sold, mode of sale proceeds received along with the documentary evidences in support of the same before the AO. Since assessee was given sufficient opportunity to explain the sources of cash deposit and the assessee could not explain the sources satisfactorily with material evidences, hence the AO made an addition of Rs.36,82,000/-, as unexplained Money u/s.69A of the Act r.w.s.115BBE of the Act and the assessment was completed u/s.143(3) on 28.12.2019.
4.1 Aggrieved by the assessment completed u/s 143(3) of the Act, the assessee preferred an appeal before the ld. CIT(A)/NFAC.
4.2 The ld. CIT(A)/NFAC dismissed the appeal of the assessee by not admitting the additional evidences filed by the assessee before him. Further, the ld. CIT(A) did not find any reason to interfere with the well reasoned and speaking order of the AO and accordingly confirmed the addition of Rs.36,82,000/- as unexplained money.
4.3 Aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before the Tribunal. The assessee has filed two paper books comprising 86 pages enclosing therein various documents/records furnished before the authority below as well as case laws relied upon by the assessee
Before us the ld. AR of the assessee vehemently submitted that assessee has duly explained the source by submitting that the cash deposit made by the assessee were out of the agricultural income and the cash withdrawal from the bank before the both the authorities below. Further, the assessee has also produced the bank statement Sri T. Rajesh (HUF), Shivamogga Page 5 of 6 as well as RTC showing extent of land under cultivation by the assessee. Therefore, the authorities below are not justified in making addition u/s 69A of the Act. Further, the ld. A.R. of the assessee vehemently submitted that the actual cash deposits during the demonetization period was only Rs.18,45,000/- and not Rs.36,82,000/- as added by ld. AO.
The ld. D.R. on the other hand, supported the order of the authorities below.
We have heard the rival submissions and perused the materials available on record. On going through the assessment order, we find that assessee could not represent its case in spite of sufficient opportunity to explain the sources of cash deposit were given by the AO. Further, the AO had also observed that assessee did not give any details of crops sold, sale bills, details of persons/firms to whom the agriculture crops were sold, mode of sale proceeds received, etc. with documentary evidences and accordingly, added the entire cash deposits of Rs.36,82,000/- made in the bank account as unexplained money u/s 69A of the Act.
7.1 Further, on going through the order of ld. CIT(A), we find that assessee has filed a detailed written submission along with the certain enclosures/annexures which in our opinion are very crucial to adjudicate the appeal. However, ld. CIT(A) held that no petition has been filed by the assessee for admission of additional evidence justifying and explaining as to under which clause of rule 46A (1) the assessee’s case is covered and as to why the additional evidence should be admitted and accordingly, the ld. CIT(A) held that additional evidence filed by the assessee is not admissible and passed the appellate order without considering the documents/records submitted before the CIT(A).
Sri T. Rajesh (HUF), Shivamogga Page 6 of 6 7.2 Even before us, the assessee has filed two number of paper books enclosing therein certain documents/records as well as case laws relied upon by them. Under the above circumstances, we are of the considered opinion that as the authorities below have not considered these records/evidences in details, the entire issue in dispute is remitted to the file of the AO to decide the same as per law after affording reasonable opportunity of being heard to the assessee. The assessee is also directed to cooperate with the proceedings before the AO and file the relevant submissions/documents/records which would be essential and required by the AO for proper adjudication of the case. We clarify that in case of further default by the assessee, they shall not be entitled for any leniency.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes.