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Facts
The assessee, a partnership firm, failed to file its return of income for AY 2017-18. The Assessing Officer (AO) made a best judgment assessment under section 144, adding Rs. 27,98,215/- on account of large cash deposits during the demonetization period. The CIT(A) deleted Rs. 14,38,215/- but confirmed the addition of Rs. 13,60,000/-.
Held
The Tribunal restored the issue of addition of unexplained cash deposit of Rs. 13,60,000/- back to the Assessing Officer. The AO was directed to examine the details filed by the assessee and decide the matter afresh, providing the assessee with a reasonable opportunity of being heard.
Key Issues
Whether the addition of unexplained cash deposit of Rs. 13,60,000/- made by the AO and confirmed by the CIT(A) is sustainable in light of the details sought to be provided by the assessee.
Sections Cited
142(1), 144, 69A, 115BBE, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.MANISH BORAD
Assessment Year: 2017-18 Siddhivinayak Paper Industries, V The Income Tax Officer, 18, Vastu Vinit, Jal Bhavani s Ward-2(1), Nashik. Road, Nashik Road, Nashik. Maharashtra – 422101. PAN: ABUFS6973M Appellant/ Assessee Respondent / Revenue Assessee by Shri Suhas Vadulekar (Virtual) Revenue by Shri Sanjay Dhivare (Virtual) Date of hearing 04/02/2025 Date of pronouncement 28/03/2025 आदेश/ ORDER
PER DR. MANISH BORAD, AM:
1. This is an appeal filed by the assessee against the order of ld.Commissioner of Income Tax(Appeals)[NFAC] for Assessment Year 2017-18 dated 11.06.2024 passed u/sec.250 of the Income tax Act, 1961.
2. The sole grievance of the assessee is that ld.CIT(A) erred in confirming the addition of Rs.13,60,000/- made by the Assessing Officer invoking section 69A read with respect to section 115BBE of the Act.
2.1 Brief facts of the case are that the assessee is a partnership firm. Assessee did not file Return of Income for A.Y.2017-18. The ld.AO based on the information about large cash deposits during the Demonetization period, issued notice under section 142(1) of the Act requiring assessee to file the return. However, assessee failed to make any compliance. The Assessing Office, thus framed the best judgment assessment under section 144 of the Act and as per the information available about cash deposits/credits, made addition of Rs.27,98,215/- and assessed the income at the same amount i.e. Rs.27,98,215/-. Aggrieved assessee preferred appeal before the ld.CIT(A) challenging the additions made by the Assessing Officer and also filed written submissions.
3. The ld.CIT(A) was satisfied with the explanation about the credit entries of Rs.14,38,215/- which were on account of business receipts and deleted the addition to this extent. So far as the cash deposits of Rs.13,60,000/-, assessee failed to furnish relevant details to explain the source, as a result, ld.CIT(A) confirmed the addition. Now, the assessee ins appeal before this Tribunal.
The ld.Counsel for the assessee took me through the relevant pages of the paper book running into 19 pages and also stated that the major source of alleged cash deposit is on account of the cash withdrawn from bank on 19.10.2016 and also cash introduced by partner. It is also claimed that certain sale proceeds from job work were received in cash and there was opening balance of cash-in- hand also. Referring to these details, the ld.Counsel for the assessee stated that the impugned addition deserves to be deleted.
On the other hand, the ld.DR for the Revenue stated that the documents filed by the assessee were not made available to the lower authorities which resulted into the exparte order framed by the ld.Assessing Officer.
I have heard rival contentions and perused the material placed before us. The only issue for consideration is regarding the alleged unexplained cash deposit of Rs.13,60,000/- during the Demonetization period. Before me, ld.Counsel for the assessee has stated that the source of alleged cash deposit is from following :
Rs.30,000/- opening balance.
Rs.1,30,000/ from sale proceeds of job work.
Rs.5,00,000/- out of cash withdrawn from bank on 19.10.2016. 4. Rs.7,00,000/- out of capital introduced by Partner. 6.1 Though, the ld.Counsel for the assessee has claimed that all the details referred in the paper book were filed before the Lower Authorities, I, however on perusal of the assessment order find that assessee did not appeared on any of the date of hearing and no details were filed and the assessment order is framed exparte under section 144 of the Act. Even ld.CIT(A) has also observed that assessee has failed to file any explanation about the source of alleged cash deposits of Rs.13,60,000/-.
6.2 I, therefore, considering the facts and circumstances of the case, deem it appropriate to restore the issue of addition of unexplained cash deposit of Rs.13,60,000/- back to the file of learned jurisdictional Assessing Officer with a direction to examine the details filed by the assessee before us and if the claim of the assessee is found to be correct, then Assessing Office can decide in accordance with law. Needless to mention that Assessing Officer shall only deal with the issue of unexplained cash of Rs.13,60,000/- only. Ld.Assessing Officer should give reasonable opportunity of hearing to assessee and to place relevant details. Assessee is also directed to remain vigilant and not to seek adjournment unless otherwise required for reasonable cause. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 28th March, 2025.