VISWANATHAN PRABHAVATHI,SALEM vs. THE INCOME TAX OFFICER, WARD 1(8), SALEM, SALEM

The assessee was a dealer in prepaid vouchers and SIM cards, and has made cash deposit of Rs 1,33,80,000/- in the bank account.

The A.O in the order passed u/s 147 of the Act has made the addition of cash deposit as assessee has not responded to notices issued and submitted proper documentary evidence for source of cash deposit.

The Ld. Authorized Representative (A.R) of the assessee, at the outset has submitted that assessee was a dealer in prepaid vouchers and SIM cards and the Government had permitted the collection of Specified Bank Notes (SBNs) towards the sale of prepaid mobile top- ups during demonetization period. The Ld. A.R further submitted that assessee has filed additional evidence in support of cash deposit before the Ld. Addl. CIT(A), but he has not admitted the additional evidence and confirmed the addition. The Ld AR, therefore, prayed that one more opportunity may be granted to substantiate his case before the A.O.

On the other hand, the Ld. Departmental Representative (D.R) relied on the orders of the lower authorities and submitted that the lower authorities have passed ex-parte, as the assessee failed to produce documentary evidence to explain the cash deposits made during the demonetization period.

We have heard the rival submissions and perused the materials available on record. The A.O has made the addition of cash deposit of Rs.1,33,80,000/- as assessee has not explained the source of cash deposit. The assessee has submitted additional evidences in support of cash deposit explaining source of cash deposit as business receipt from prepaid vouchers and SIM cards sales. The Ld. Addl. CIT(A) has not admitted the additional evidence and dismissed the appeal. We are of the view that the assessee should be given one more opportunity to substantiate his case before the A.O in the interest of justice and in accordance with the principles of natural justice.

Accordingly, we set aside the order of the Ld. Addl. CIT(A) and remit the matter back to the file of the A.O to verify the source of cash deposits in accordance with law. We also direct the assessee to appear before the A.O on the date of hearing without fail and furnish all relevant details for fresh consideration.

In the result, the appeal filed by the assessee is allowed for statistical purposes.