AAMIR HAJIASHIF PATEL,SHAHIBAGU ROAD vs. INCOME TAX OFFICER WARD 1(2)(1) , AHMEDABAD

The captioned appeal has been filed at the instance of the Assessee against the order dated 08.03.2024 passed by the National Faceless Appeal Centre(NFAC)/CIT(A), arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2017-18.

The assessee is an individual mainly engaged in the business of trading of Areca Nuts (Supari) in the name and style of M/s. Patel Stores. The assessee filed return of income for Assessment Year 2017-18 on 04.11.2017, showing total income of Rs.7,01,500/-. During the assessment proceedings, the Assessing Officer observed that the assessee deposited cash into the bank account to the tune of Rs.1,45,47,320/- (Axis Bank: Rs.68,50,800 + Kotak Mahinda Bank : 76,96,520/-). The Assessing Officer asked the assessee to provide the source of the sales cash deposits. The 4 assessee submitted his reply and filed the details such as cash book, bank book, day-wise & transaction-wise stock registered, sales details, purchase details, contract confirmation, bank statement, cross confirmation, VAT returns etc. The Assessing Officer observed that the assessee has not provided PAN of the persons to whom goods were sold. The Assessing Officer has also doubted the purchase due to the non availability of PAN & ITR of the parties and therefore, rejected the books of accounts us.145 of the Act, and made addition of Rs.9,95,477/- by estimating gross profit at the rate of 5.5%. The Assessing officer further observed that the assessee had incurred various expenses like interest expenses, rent expenses and VAT interest expenses which was disallowed to the tune of Rs.16,68,269/-. The Assessing Officer further observed that the assessee could not furnished all the confirmation from Sundry Creditors and hence made addition of Rs.56,58,475/-. The Assessing Officer also made addition of Rs.31,000/- being unsecured loan in absence of PAN, ITR & confirmation. Thus, the Assessing officer, made additions/disallowance to the extent of Rs.2,36,02,041/-

Being aggrieved by the assessment order, the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A), dismissed the appeal of the assessee.

The Ld.AR submitted that the Ld. CIT(A) failed to appreciate that the video conferring link was not working and the assessee could not endorse his contentions before the Ld.CIT(A). The Ld.AR further submitted that the Ld.CIT(A), dismissed the appeal without considering the factual aspect and the additional evidences given by the assessee. The Ld.AR filed the additional evidences before the Tribunal in respect of following details:

The Ld.AR also submitted the cash transaction form 2016 wherein the details of cash amount related to cash sales was submitted before the Tribunal. Thus, the Ld.AR submitted that the Assessing Officer was not right in rejecting the books of accounts as the Assessing Officer has not pointed out any specific error while rejecting the books of accounts. The Ld.AR submitted that the Assessing Officer failed to appreciate that after rejecting book result, no addition based on books can be made. As relates to cash deposits the Ld. AR submitted that the Assessing Officer failed to appreciate that even as per the Rule 114B the assessee was not liable to quote PAN in the cash sales if the sales bill does not exceed Rs.2,00,000/- and thus he made addition of Rs.1,45,47,320/-

The Ld. DR submitted that the assessee is filing additional evideces at this juncture which was not produced either before the Assessing Officer or before the Ld.CIT(A). Therefore, the Assessing Officer has righly made addition which was confirmed by the Ld.CIT(A). The Ld. DR relied upon the Assessment Order and the order of the Ld.CIT(A).

We have heard both the parties and perused the material available on record. It is pertinent to note that Ld.CIT(A) has not taken into account all the contentions of the assessee during the video conferring, as submitted by 7 the assessee and besides this the assessee is filing the additional evidence before the Tribunal which is required to be verified in respect of the issues contested by the assessee herein. The said additional evidences are admitted and the matter is remanded back to the file of the Assessing Officer for proper adjudication of the issues on merits as per the Income-tax Act. The assessee is given opportunity of hearing by following the Principle of Natural Justice.

In the result, the appeal of the assessee is partly allowed for statistical purposes.