LAXMANJI JAVANJI DODIYA,ANAND vs. THE ITO, WARD-1, ANAND
Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHAAssessment Year: 2022-23
PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”) dated 27.02.2025 for the Assessment Year (A.Y.) 2022-23 in the proceedings under Section 144 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. The brief facts of the case are that the assessee had filed his return of income for the A.Y. 2022-23 on 31.07.2022 declaring income of Rs.5,41,900/- and agricultural income of Rs.2,89,770/-. The case was selected for scrutiny to verify the deduction claimed under Section 54F of Laxmanji Javanji Dodiya vs. ITO Page 2 of 5
the Act in last three years, considering the fact that no deemed capital gain was disclosed. In the course of assessment, the assessee had explained that deduction of Rs.38,15,175/- was claimed u/s 54F of the Act in the A.Y. 2020-21 and that the property in respect of which this deduction was claimed was being used for self-residence. However, it transpired that the assessee was owning 8 other residential and commercial properties, out of which rental income was shown for one shop only.
Therefore, the Assessing Officer had directed the assessee to provide fair rent and municipal rent certificate from the Municipal Authority to calculate the deemed rent realisation. Since the assessee did not comply to this requirement, the Assessing Officer had referred the matter to the Verification Unit to find out the fair market value of the properties. On the basis of the enquiry conducted by the Verification Unit, the fair rental value of five properties was taken at Rs.5,16,000/-. The Assessing Officer had allowed deduction u/s 24 of the Act thereon and the income of Rs.3,61,200/- was assessed as income from house property. This apart, the Assessing Officer found that the assessee has made total cash deposit of Rs.16,60,000/- during the year in his bank account. The Assessing Officer was not satisfied with the explanation of the assessee in this regard and cash deposit of Rs.9,00,000/- was taken as unexplained. Accordingly, the assessment was completed u/s 144
r.w.s.144B of the Act on 20.03.2024 at a total income of Rs.18,03,100/-.
Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. The assessee is now in second appeal before us. The following grounds have been taken in this appeal: -
“1. The Learned CIT-Appeals, (NFAC) has erred in law on facts in dismissing the appeal. The same is bad in law and deleted now.
Your appellant prays to add, amend, alter, modify or delete any grounds of appeal at the time of hearing.”
The assessee has also taken the following additional grounds: -
“Additional Ground of Appeal
1)
The Ld. CIT (Appeal) erred in law and on facts in confirming addition of Rs.9,00,000/- u/s.68 in respect of cash deposited in bank account without considering the fact that opening cash balance as on 01.04.2021
was Rs.10,11,083.12 as per copy of Cash Book.
2)
The Ld. CIT (Appeal) erred in law and on facts in confirming addition of Rs.3,81,200/- in the income of House Property Income in respect of 5
vacant properties as deemed income u/s.23(1)(c) of the IT Act, 1961 on the basis of report by Valuation Unit, without giving copy of the report to the appellant.”
Shri B.T. Thakkar, Ld. AR of the assessee, submitted that no compliance could be made before the Ld. CIT(A) and the appeal of the assessee was dismissed without examining the merits of the addition. He submitted that the assessee resides in a remote place and was dependent on his counsel for the representation of the case before the Ld. CIT(A). Further that, adjournments were sought on three occasions, however, the complete details could not be filed before him. The Ld. AR submitted that the assessee has good case on merits as cash-in-hand of Rs.10,11,083.12 was disclosed in the balance sheet as on 31.03.2021 and considering this fact, the Assessing Officer was not correct in treating the cash deposit of Rs.9,00,000/- in the bank account as unexplained. He further submitted that the report of the Verification Unit in respect of deemed rental from five vacant properties was not provided to the Laxmanji Javanji Dodiya vs. ITO Page 4 of 5
assessee and the addition was made in contravention to the principles of natural justice. The Ld. AR requested that the assessee may be allowed another opportunity to explain the issues by setting aside the matter to the file of the Ld. CIT(A).
Ms. Urvashi Mandhan, Ld. Sr. DR had no objection if the matter was set aside to the file of Ld. CIT(A) for allowing another opportunity to the assessee.
We have considered the request of the assessee. It is found that the Ld. CIT(A) had allowed three opportunities to the assessee which was not availed and no evidences were brought on record in support of the grounds as taken. The Ld. CIT(A) had, therefore, dismissed the appeal of the assessee without examining the merit of the additions. The contention of the assessee is that the report of the Verification Unit, on the basis of which the addition of deemed rent was made, was not confronted to the assessee. In fact, the AO had first required the assessee to provide fair rent and municipal rent certificate from municipal authorities to work out the deemed rental of vacant properties, which was not complied. Regarding cash deposit also, we don’t find justification for addition of Rs. 9 lakhs out of total cash deposit of Rs.16,60,000/-, if the assessee had opening cash balance of Rs.10,11,083/-. In the interest of justice, we deem it proper to set aside these matters to the file of the Ld. CIT(A) with a direction to allow another opportunity to the assessee to represent his case and bring on record the evidences in support of the grounds as taken and also to produce the documents and details as required by the Ld. CIT(A). In case the assessee does not comply in the course of set-aside PBN/*
Copies to: (1)
The appellant
(2)
The respondent
(3)
The PCIT
(4)
The CIT(A)
(5)
Departmental Representative
(6)
Guard File
By orderE