NAVNITBHAI DHANJIBHAI PATEL (HUF),AHMEDABAD vs. NFAC, ASSESSMENT UNIT PRESENT JURIDICTION THE ITO, WARD-7(2)(1), AHMEDABAD

The assessee is now in second appeal before us. The following grounds have been taken in this appeal: -

The learned CIT(A) erred in law and on facts in not granting the adequate opportunity of being heard to the appellant during the course of appellate proceedings, such opportunity should have been granted in the interest of justice.

Shri Pritesh Shah, Ld. AR of the assessee submitted that the Ld. CIT(A) had dismissed the appeal of the assessee without examining the merits of the addition. He explained that no compliance could be made by the assessee before the Ld. CIT(A) and for this reason the appeal was dismissed. He, therefore, requested that the assessee may be allowed another opportunity to explain the deposits in the bank account and the matter may be set aside to the file of the Assessing Officer. He further submitted that the AO had wrongly made the addition u/s 68 of the Act. The Ld. AR also requested to admit additional evidences in support of the cash and credit entries appearing in the bank account of the assessee.

Per contra, Shri Kamlesh Makwana, Ld. CIT-DR submitted that the assessee neither made compliance before the Assessing Officer nor before the ld. CIT(A). He further submitted that the ld. CIT(A) had allowed as many as four opportunities to the assesses but no compliance was made by the assessee on any of these occasions, other than seeking adjournments. He, however, had no objection if the matter was set aside to the ld. CIT(A) for allowing another opportunity to the assessee.

We have considered the rival submissions. The undisputed fact is that the assessee neither complied before the Assessing Officer nor before the Ld. CIT(A) and the source of the cash deposits and credits appearing in the bank account was not explained. We, therefore, deem it proper to impose a cost of Rs.10,000/- on the assessee which should be paid to the Income Tax Department within 15 days of the receipt of this order. We are also of the opinion that the Assessing Officer was not correct in treating the entire cash deposits and credit entries in the bank account as income of the assessee without taking into account the debit transactions. The ld. AR of the assessee has submitted that cash deposits in the bank account were made out of earlier withdrawals from the same account. Further, that most of the credit entries were loan transactions, in support of which copy of ledger account and confirmations have now been filed in the paper-book. These are fresh evidences and were not examined by the lower authorities at any stage. We, therefore, deem it proper to set aside the matter to the file of the Ld. CIT(A) with a direction to allow another opportunity to the assessee to explain the source of cash deposits and the credit entries appearing in the bank account. The assessee will be free to bring on record the evidences filed before us or any other evidence before the CIT(A), to explain the cash & credit entries as appearing in the bank accounts and the ld. CIT(A) will be free to call for the remand report of the AO thereon, if so required. The assessee is also directed to promptly comply before the ld. CIT(A) and not to seek any adjournment.

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