DHANDAPANI SPINNING MILLS LTD.,SALEM vs. DCIT, CIRCLE-1(1), SALEM

The assessee filed the return of income for the relevant assessment year declaring a total income of Rs. 55,29,400/-. The A.O made an addition cash deposits of Rs.84,25,000/- into its bank account during the demonetization period, u/s. 69A of the Act, as the assessee had not furnished any supporting bills or vouchers to substantiate the claim that the cash deposits represented sale proceeds. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). However, the Ld. CIT(A), after discussing facts pertaining to an entirely different case, set aside the assessment order for fresh assessment. 3. The Learned Authorized Representative (Ld. A.R.) submitted that the addition in the present case relates to cash deposits of Rs.84,25,000/-, but the Ld. CIT(A) has discussed facts of some other case involving a disallowance of Rs. 18,00,000/- u/s. 40A(3) and addition of Rs. 49,54,300/- u/s. 68 of the Act, and thereafter set aside an assessment order passed u/s. 144 r.w.s. 147 of the Act. It was contended that the Ld. CIT(A) has passed the appellate order without proper application of mind. The Ld. A.R. therefore prayed that one more opportunity may be granted to the assessee to substantiate its case before the A.O. Dhandapani Spinning Mills Ltd.

The Learned Departmental Representative (Ld. D.R.) relied on the orders of the lower authorities and requested that the appeal be dismissed. 5. We have heard the rival submissions and perused the materials available on record. We find that the A.O has made an addition of Rs.84,25,000/- towards cash deposits. However, the Ld. CIT(A), while disposing of the appeal, has narrated facts of a different case and proceeded as if the assessment order in the present case was one passed u/s. 144 r.w.s. 147 of the Act. It is therefore clear that the appellate order passed by the Ld. CIT(A) suffers from non-application of mind. 6. Since the addition was made by the A.O on account of the assessee’s failure to furnish the required details, we are of the view that one more opportunity should be granted to the assessee to substantiate its case. Accordingly, we set aside the impugned order and remit the matter back to the file of the A.O for de novo assessment in accordance with law, after affording the assessee a reasonable opportunity of being heard. The assessee is also directed to comply with all notices issued by the A.O and furnish all relevant details for Dhandapani Spinning Mills Ltd.