PIPASA ENTERPRISE BANDAR C S SHOP,HOOGHLY vs. I.T.O., WARD - 23(1), HOOGHLY

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ITA 1899/KOL/2024Status: DisposedITAT Kolkata18 March 2025AY 2017-2018Bench: Shri Duvvuru RL Reddy (Vice President)6 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal observed that the cash book and bank statement, although offered to tax and submitted to the Tribunal, were not considered by the lower authorities. It remitted the case back to the Assessing Officer to re-examine all evidences, including the cash book and bank statement, and pass a speaking order after providing the assessee another opportunity of being heard.

What were the facts?

The assessee, a firm, deposited Rs. 21,10,000/- during demonetization in a partner's personal account, claiming it represented cash sales and belonged to the firm due to internal disputes. The Assessing Officer made an addition under Section 69A read with Section 115BB. The CIT(A) dismissed the appeal, refusing to admit additional evidence due to non-compliance with Rule 46A procedures.

What were the issues?

1. Whether additional evidence, not submitted as per Rule 46A, should be admitted and considered by appellate authorities. 2. Validity of an addition under Sections 69A and 115BB for cash deposits when the assessee claims it's from cash sales and offered to tax, and supporting documents were not adequately considered.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 148,Section 142(1),Section 69A,Section 115BB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA

Before: Shri Duvvuru RL Reddy, Vice-(KZ)

Appearances by: Shri D.K. Sen, Advocate, appeared on behalf of the assessee Shri Nicholash Murmu, Addl. CIT, D.R., appeared on behalf of the Revenue Date of concluding the hearing: January 07, 2025 Date of pronouncing the order: March 18, 2025 O R D E R

The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 31st July, 2024 passed for Assessment Year 2017-18.

2.

Brief facts of the case are that the assessee is a Firm and the case of one Shri Arun Kumar, partner of the assessee-firm M/s.

(A.Y. 2017-2018) Pipasa Enterprise Bandar C.S. Shop IPASA Enterprise Bander C.S. Shop, was selected for scrutiny assessment. During the scrutiny proceedings, the ld. Assessing Officer found that there was a cash deposit of Rs.21,10,000/- in the Bank account during demonetization period. The assessee submitted that due to internal disturbance with the other partners, the firm could not open any bank account using firm’s PAN and all the transactions were made through his personal account. Accordingly, the cash deposited in the Bank account belonged to M/s. IPASA Enterprise Bandar C.S. Shop. After getting this information, proceedings under section 144 of the Act in the case of Arun Kumar dropped and the proceedings under section 147 of the Act were initiated in the case of assessee-firm. Notice under section 148 of the Act was issued by the ld. Assessing Officer but the assessee-firm has not filed any return of income inspite of various notices issued from time to time to the assessee-firm. However, vide notice issued by the ld. Assessing Officer under section 142(1) of the Act dated 11.02.2021, the assessee-firm was asked to furnish all the details. The assessee responded to the said notice and furnished part of information/details but the assessee did not furnish remaining details as were sought by the ld. Assessing Officer. On 24.09.2021, a show-cause notice was issued alongwith draft assessment order, and the assesese filed its submission in response to the show-cause notice issued by the ld. Assessing Officer, but ld. Assessing Officer did not accept the submissions made by the assessee. Therefore, ld. Assessing Officer concluded the assessment by invoking the provision of section 69A read with section 115BB of the Income Tax Act and made an addition of Rs.21,10,000/- to the total income of the assessee-firm (A.Y. 2017-2018) Pipasa Enterprise Bandar C.S. Shop on account of unexplained cash deposit in the Bank account of the partner of the assessee-firm.

3.

On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) after considering the facts and circumstances of the case, dismissed the appeal filed by the assessee saying that the appellant failed to adduce the necessary evidences/documents as and when needed and did not satisfactorily make compliance before the ld. Assessing Officer as well as ld. CIT(Appeals). He further mentioned that the appellant claims to be furnishing the said documents during the appellate proceedings. Furnishing of said documents tantamount to additional evidence. However, no proper application for admission of the said documents under Rule 46A has been made. Therefore, the ld. CIT(Appeals) did not admit the additional evidences filed by the assessee and the same was dismissed.

4.

On being aggrieved, the assessee preferred an appeal before the Tribunal.

5.

I have heard both the sides. It was the submission of the ld. Counsel for the assessee that due to internal disturbance of the partner of the assessee-firm, the assessee-firm is not able to produce the cash book to substantiate its claim. That cash deposit was out of the cash sales. He further submitted that the appellant had produced the same during the first appellate proceedings, but the ld. CIT(Appeals) refused to admit the additional evidences, on the ground that the assessee has not filed the petition as per the (A.Y. 2017-2018) Pipasa Enterprise Bandar C.S. Shop conditions stipulated in Rule 46A of the Income Tax Rules. He further submitted that the assessee filed a paper book before the Tribunal and furnished all cash books, bank statement and other evidences to substantiate its claim. Therefore, he pleaded to set aside the orders passed by the revenue authorities and delete the addition made by the ld. Assessing Officer under section 69A read with section 115BB of the Act for an amount of Rs.21,10,000/-.

6.

On the other hand, ld. Departmental Representative submitted that the ld. Assessing Officer as well as ld. CIT(Appeals) has given ample opportunities to the assessee for production of documents/evidences, but the assessee failed to produce any evidence before the revenue authorities. He further submitted that during the appellate proceedings, the assessee has filed additional evidences, but without proper format, which requires to establish that the reasons for failure to produce the additional evidences before the ld. Assessing Officer. Therefore, the ld. CIT(Appeals) rejected the additional evidences and passed the order as per the material available on record. Therefore, he pleaded to uphold the orders passed by the revenue authorities.

7.

I have perused the assessment order as well as the appellate order and also the paper book filed by the assessee. The main contention of the assessee is that an amount of Rs.21,10,000/- was deposited and the same was shown in the return of income filed by the asseessee. Therefore, it is nothing but a double taxation. From the record, it is found that cash book and bank statement filed by the assessee were not considered by the ld. (A.Y. 2017-2018) Pipasa Enterprise Bandar C.S. Shop CIT(Appeals), which caused hardship to the assessee but the amount of Rs.21,10,000/- was offered to tax. So far as the additional evidence is concerned, the main contention of the assesese is that due to internal disturbances of the partners of the assessee-firm, and the assessee-firm was not in a position to place the material evidences before the ld. Assessing Officer.

8.

Considering the above facts and circumstances of the case, I am of the considered view that it is a fit case to remit the matter back to the file of ld. Assessing Officer to examine the cash book, bank statement and all other evidences filed by the assessee and pass a speaking order after providing one more opportunity of being heard to the assessee. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. Assessing Officer failing which the Ld. Assessing Officer shall be at liberty to pass appropriate order in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.

9.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 18/03/2025.

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