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Income Tax Appellate Tribunal, HYDERABAD “B” BENCH: HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
For Assessee : CA M. Bhupal Gowd For Revenue : Shri Rakesh Chintagumpula, Sr. AR Date of Hearing : 06.05.2025 Date of Pronouncement : 15.05.2025 ORDER PER MANJUNATHA G. :
This appeal has been filed by the Assessee- Society against the order dated 19.12.2024 of the learned CIT(A)-National Faceless Appeal Centre [in short the “NFAC”] Delhi, relating to the assessment year 2016-2017.
Briefly stated facts of the case are that, the assessee-society has not filed it’s original return of income
2 ITA.No.256/Hyd./2025 for the assessment year 2016-2017. The case of the assessee-society has been subsequently reopened u/sec.148 of the Act, for the reasons recorded as per which, an information available with the Department in RMS module of Insight portal under non-filer with potential tax liabilities and as per the said information, the assessee-society has made cash deposit of more than Rs.10 lakhs in SB A/c and time deposit exceeding Rs.2 lakh with a banking company. Accordingly, show cause notice u/sec.148A of the Income Tax Act, 1961 [in short “the Act”] has been issued on 20.01.2023 and served on the assessee-society. In response to the show cause notice, the assessee-society has not furnished any reply. Therefore, after obtaining prior approval from the Competent Authority, the assessment has been reopened by issuing notice u/sec.148 of the Act dated 23.03.2023. In response to the notice u/sec.148, the assessee-society has filed it’s return of income for the assessment year 2016-2017 declaring total income of Rs.2,64,790/-. During the course of assessment proceedings, the Assessing Officer noticed that the 3 ITA.No.256/Hyd./2025 assessee-society has made cash deposit and time deposit in bank a/c and, therefore, called-upon the assessee-society to file relevant evidences to prove source for cash deposit. The assessee-society neither appeared nor filed any details. Therefore, the Assessing Officer passed his best Judgment assessment order u/sec.147 r.w.s.144B of the Act on 10.02.2024 and assessed the total income of the assessee- society at Rs.40,09,934/- by making addition towards cash deposit u/sec.69A, addition towards time deposit-69 of the Act and addition towards interest income.
On being aggrieved, the assessee-society carried the matter in appeal before the learned CIT(A). Before the learned CIT(A), the assessee-society submitted that it is engaged in the business of sale of Toddy through four different Toddy Tapper Cooperative Society’s Limited and source for cash deposit is out of sale of Toddy. The assessee-society further submitted that it’s societies are audited by State Cooperative Audit Department and assessee has furnished relevant audit reports. Further, the assessee had also furnished relevant cash book extract of 4 ITA.No.256/Hyd./2025 societies to prove source of cash deposit. The learned CIT(A) after considering the relevant submissions of the assessee- society and also taking note of various reasons given by the Assessing Officer, partly allowed the appealof the assessee- society where the learned CIT(A) upheld the addition made towards cash deposit on the ground that the assessee- society could not explain source for cash deposit. However, deleted the addition made by the Assessing Officer towards time deposit on the ground that, on perusal of the bank statements it reveals that, the assessee-society claim is correct in respect of time deposit. The learned CIT(A) had also rejected the claim of deduction u/sec.80P of the Act.
Aggrieved by the order of the learned CIT(A), the assessee-society is now in appeal before the Tribunal.
CA M Bhupal Goud, Learned Counsel for the Assessee submitted that, the learned CIT(A) is erred in sustaining the addition made by the Assessing Officer towards cash deposit into bank a/c even though, the assessee has explained the source for cash deposit out of sale proceeds of Toddy through different Cooperative
5 ITA.No.256/Hyd./2025 Societies. Learned Counsel for the Assessee, further submitted that, although, the assessee has filed certain evidences, but, could not file complete evidences including cash book extract of societies and the same has been furnished in the form of additional evidences. Therefore, he submitted that, one more opportunity of hearing may be given to the assessee to go before the Assessing Officer and explain it’s case.
Shri Rakesh Chintagumpula, learned Sr. AR for the Revenue, supporting the order of the learned CIT(A) submitted that, the assessee-society could not explain the case with relevant evidences which is evident from the order of the Assessing Officer where the Assessing Officer has made addition towards cash deposit, in absence of relevant details. Before the learned CIT(A), although, the assessee claims that, the source for cash deposit is out of sale proceeds of Toddy, but, could not file relevant cash book to substantiate it’s claim. In absence of relevant details, the learned CIT(A) has rightly sustained addition. Since the assessee-society has filed certain additional evidences
6 ITA.No.256/Hyd./2025 before the Tribunal, the matter may be remitted back to the file of Assessing Officer to verify the case and decide the same as per law.
We have heard both the parties, perused the material on record and the orders of the authorities below. The assessee-society is registered under the Societies Registration Act and it works for the welfare of the backward community called “Gouda” in the State of Telangana and also down trodden community. The society has four Toddy shops and four Excise Department licenses in and around Hyderabad city. As a matter of regulatory policy in Toddy for running Toddy shops, it has four outlets. Further, it has four separate Cooperative Societies constituted by the principal society and all the four society’s details are part and parcel of the assessee-society and comprising the same Society “Gouda Sankshema Sangam”. The assessee-society has formed four societies for the purpose of sale of Toddy in different locations and also all the societies are registered under the Societies Registration Act and also subjected to audit from the State Government
7 ITA.No.256/Hyd./2025 Audit Department. Each society has maintained separate set of books of accounts in respect of sale of Toddy and other expenses and also amount remitted to the assessee- society. The assessee-society claims that source for cash deposit is out of sale proceeds of Toddy through four different societies and this fact has been explained to the learned CIT(A) by filing relevant evidences. We find that, the assessee-society has furnished relevant audit reports of Toddy Tappers Cooperative Society maintained by the assessee-society for sale of Toddy. The assessee-society had also furnished minutes books of the assessee-society and as per the said minutes, there is a clear evidence in the form of sale of Toddy through four different societies. Further, the assessee-society had also furnished monthly receipt and payment account of the four societies. As per the details filed by the assessee-society, the main source of income of the assessee-society is sale of Toddy through different societies. Further, the society’s are not operating any bank account. Whatever cash left with the societies has been transferred to the assessee-society and in turn, the 8 ITA.No.256/Hyd./2025 assessee-society has deposited the cash into bank accounts. Since the explanation of assessee-society in light of additional evidences was not filed before the Assessing Officer and learned CIT(A), in our considered view, the matter needs to go back to the Assessing Officer for further verification. Thus, we set aside the order of the learned CIT(A) and restore the issue back to the file of Assessing Officer with a direction to re-examine the claim of assessee- society in light of evidences that may be filed by the assessee-society to prove the source of cash deposit. In case, the assessee-society is able to prove the source of cash deposit into the bank a/c on the basis of books of accounts and other evidences of four different Toddy Tappers Cooperative Societies, then, the Assessing Officer is directed to delete the addition made towards cash deposit into bank account. All other issues challenged by the assessee including deduction claimed u/sec.80P of the Act are left open to be decided by the Assessing Officer.
9 ITA.No.256/Hyd./2025
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on .05.2025.