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Facts
The assessee, a commission agent and old vehicle trader, deposited Rs. 18 lakh in demonetized currency on 15.11.2016 and 21.11.2016. The Assessing Officer added this amount as unexplained cash credit, an addition later confirmed by the Ld. CIT(A) due to the assessee's non-representation. The assessee filed an appeal after a 50-day delay, which the Tribunal condoned.
Held
The Tribunal directed the Assessing Officer to re-examine the submitted cash book and cash flow chart for verification. If the assessee's cash balance as of 01.11.2016 is found to exceed Rs. 18 lakh, the addition made by the Assessing Officer and confirmed by the Ld. CIT(A) shall be deleted.
Key Issues
Whether the Rs. 18 lakh demonetized currency deposit was explained by the available cash balance as per the cash book and cash flow statement.
Sections Cited
250, 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
O R D E R Per Bench :
This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)”] vide Order no. ITBA/NFAC/S/250/2023-24/1056036741(1) dated 13.09.2023 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18.
Shri Somnath Ghosh & Shri Sarnath Ghosh, Advocates appeared on behalf of the assessee and Shri Arun Kumar Meena, Add. CIT, Sr. DR appeared on behalf of the revenue.
Appeal of the assessee is time barred by 50 days. At the time of hearing according to the prayer of the assessee and explaining the reasons for the delay in filing the appeal, we condoned the delay in filing the appeal and accepted the appeal for hearing.
4. It was submitted by the Ld. AR that the assessee is in the business of commission agent, trading in old vehicles and having some partnership income. It was the submission that there was a deposit of Rs. 9,00,000/- each on two dates i.e. on 15.11.2016 and 21.11.2016. These were demonetized currencies. It was the submission that the Assessing Officer held that the amount of Rs. 18 lakh deposited by the assessee in the demonetized currency was stated as unexplained cash credit on the ground that the cash deposit did not match with the normal pattern of business habit of the assessee and that the source of cash deposit remains doubtful. It was the submission that on appeal before the ld. CIT(A), he confirmed the addition on account of the fact that assessee was unrepresented before the Ld. CIT(A). It was the submission of the Ld. AR berfore us that the copy of the cash book for the relevant period reads as follows:
It was submitted by the Ld. AR that the cash book was before the Assessing Officer. The Ld. AR has also filed an unsigned cash flow chart for the period 01.11.2016 to 31.12.2016 which reads as follows:
It was the submission that the cash deposit is out of the cash available with the assessee and, therefore, no addition u/s. 69 of the Act is liable to be made.
In reply, the Ld. CIT, DR vehemently supported the orders of the Assessing Officer and the Ld. CIT(A). It was the submission that there is no evidence to show that the cash book was submitted before the Assessing Officer much less a cash flow chart as it was the submission that the same may be sent for verification. It was the submission that he suspected the cash book has been fraudulently prepared.
We have considered the rival submissions. A perusal of the facts of the present case clearly shows that as per the cash book, the assessee is having Rs.65,35,514/- as cash available as on 01.11.2016, there is no other deposit in the bank account in respect of the demonetized currency except for the two entries on 15.11.2016 and 21.11.2016. Therefore, in the interest of justice, the cash book and the cash flow chart are directed to be placed before the Assessing Officer. The Assessing Officer shall examine whether such cash book and cash flow have been placed before him in the course of original assessment and whether the cash book and cash flow presented now before the Tribunal are the same for which the same are being sent to Assessing Officer for verification. If it is found that the assessee has cash balance as on 01.11.2016 exceeding Rs. 18 lakh, then the addition as made by the Assessing Officer and confirmed by the Ld. CIT(A) shall stand deleted.
In the result, the appeal of the assessee is allowed for statistical purpose with the directions given above.
Order dictated and pronounced in the open court.