DHRUVALKUMAR SADHUBHAI PATEL,NADIAD vs. THE ACIT, ANAND CIRCLE, ANAND

On the facts and circumstances of the case the Hon’ble CIT(A) has erred in confirming the addition made by assessing officer without properly appreciating the additional evidence furnished before Hon’ble CIT(A) under Rule 46A of the Income tax Rules.

In law, on the facts and circumstances of the case, the hon’ble CIT(A) failed to decide the grounds of appeal relating to invocation of provision of Sec 69A of the act by the assessing officer on the basis of bank statement which does not fall within the meaning of “books of account” so as to attract the provision of sec 69A of the act.

The hon’ble CIT(A), both in law and on facts of the case erred in the making addition of RS.6,09,43,120 (entire credit side of bank statement) which was trading receipt(sales shown in credit side) of Poultry business without allowing deduction for purchase & other expenses (Debit side of bank statement) and hence, Hon’ble CIT(A) failed to estimate the income by applying “Real Income theory”.

The appellant craves to leave to add, alter, delete, amend or withdraw any grounds of appeal on or before hearing of appeal.”

The brief facts of the case are that the assessee is an individual and during the impugned assessment year, the Assessing Officer was in receipt of information that there was cash deposit to the tune of Rs. 6,09,43,120/- in the bank account of the assessee held with HDFC Bank. The Assessing Officer noted that the assessee had not filed return of income for the relevant assessment year. Accordingly, the case of the assessee was reopened under Section 148 of the Act. During the course of hearing, the Assessing Officer issued several notices of hearing, however, there was no compliance made by the assessee in response to the same. Accordingly, the Assessing Officer treated the cash deposited to the tune of Rs. 6,09,43,120/- in the bank account held with the assesseee, as unexplained income under Section 69A of the Act.

In appeal, Ld. CIT(A) called for remand report and after taking into consideration the contents of the remand report and also the submissions of the assessee, Ld. CIT(A) confirmed the addition with the following observations:

4 Therefore, the appellant failed to submit any data/reply to contravene the information available with the AO neither during the assessment proceedings nor during the appellate proceedings and could not prove that the cash deposits made were genuine by furnishing documentary evidence in order to establish the nature and source of such deposits made.

8 Therefore, the appellant’s claims stands unverifiable and non-substantiated in the absence of specific details necessary to prove the genuineness and creditworthiness of the transactions made. Hence, I find no infirmity in the action of AO and the audition

The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A).

Before us, the Counsel for the assessee submitted that if given an opportunity of being heard, the assessee would be in a position to substantiate the source of cash deposit in the bank account. Further, the Counsel for the assessee submitted that the assessment order was passed on ex-parte basis and in the assessee did not get an opportunity to prove the source of cash deposits made in his bank account. Accordingly, it was submitted that in the interest of justice, the matter may be restored to the file of Assessing Officer for de-novo consideration.

In response Ld. D.R. placed reliance on the observations made by the Ld. CIT(A) in the appellate order.

On going through the facts of the instant case, we observe that while confirming additions, Ld. CIT(A) has not given credit of the withdrawals made by the assessee from his bank account during the impugned year under consideration. We observe that on perusal of the bank statement submitted by the assessee, there are substantial withdrawals which have also been made by the assessee from the aforesaid bank account held with HDFC Bank. Accordingly, looking into the fact that substantial amount of addition amounting to Rs. 6,09,43,120/- has been made in the hands of the assessee, in the interest of justice, the matter is hereby restored to the file of Ld. Assessing Officer for deciding the matter afresh, after taking into ITA Nos. 242&243/Ahd/2024 Asst. Years –2012-13 & 2013-14 - 5–

In the result, the appeal of the assessee is allowed for statistical purposes, subject to payment of Rs. 10,000/-, to be deposited in the Prime Minister Relief Fund.

The assessee has taken the following grounds of appeal: “1. In law, on the facts and in the circumstances of the case, the hon’ble CIT(A) has erred in the confirming the addition of Rs.1,93,89,000 made by the assessing officer u/s 69A as unexplained money.

On the facts and in the circumstances of the case the Hon’ble CIT(A) has erred in confirming the impugned addition without providing adequate opportunity of being heard and thus violated the principles of natural justice.

In law, on the facts and in the circumstances of the case, the hon’ble CIT(A) failed to decide the grounds of appeal relating to invocation of provision of Sec 69A of the act by the assessing officer on the basis of bank statement which does not fall within the meaning of “books of account” so as to attract the provision of sec 69A of the act.

The hon’ble CIT(A), both in law and on facts of the case erred in the making addition of Rs.1,93,89,000 (entire credit side of bank statement) which was trading receipt (sales shown in credit side) of Poultry business without allowing deduction for purchase & other expenses (Debit side of bank statement) and hence, Hon’ble CIT(A) failed to estimate the income by applying “Real Income theory”.

The appellant craves to leave to add, alter, delete, amend or withdraw any grounds of appeal on or before hearing of appeal.”

We observe that the facts are similar to those for A.Y. 2012-13, wherein the Assessing Officer noted that the assessee had deposited cash amounting to Rs. 1,93,89,000/- in his bank account and the nature and source of such deposits made in the bank account were not explained by the assessee, since the assessee remained non-compliant both during the assessment proceedings as well as appellate proceedings. Before Ld. CIT(A), the assessee gave a bald statement that the said deposits were out of cash sales against selling of chick, but failed to substantiate the same with books of accounts / evidence / documents. Since the assessee could not file any corroborative evidence in support of it’s case to explain the source of cash deposit, Ld. CIT(A) was constrained to confirmed the additions made by the Assessing Officer.

However, in the interest of justice and looking into the quantum of additions made by the Ld. Assessing Officer, the matter is hereby restored to the file of Assessing Officer for de-novo consideration, subject to payment of cost of Rs. 10,000/- for A.Y. 2013-14 as well, to be deposited in Prime Minister Relief Fund.

In the result, the appeal of the assessee is allowed for statistical purposes for A.Y. 2013-14. ITA Nos. 242&243/Ahd/2024 Asst. Years –2012-13 & 2013-14 - 7–

In the combined result, the appeals of the assessee are allowed for statistical purposes for both the impugned assessment years before us, subject to payment of cost of Rs. 10,000/- for each of the assessment years. This Order is pronounced in the Open Court on 23/04/2025 (NARENDRA P. SINHA) JUDICIAL MEMBER Ahmedabad; Dated 23/04/2025