KISHORBHAI DHIRAJLAL CHAMPANERI,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-3(1)(2), AHMEDABAD

Both the lower authorities erred in confirming the addition made of Rs. 28,43,620 towards both cheque deposit and cash deposited in bank account under S.68 without appreciating that the appellant main source of income is from commission and maintaining regular books of accounts and cash were deposited out of the cash on hand in bank out of old saving is without any justification and beyond juri iction liable to be deleted or may be sent back to the CIT(A) or Juri ictional officer to decide matter on fresh in the interest of justice.

That your appellant reserve right to amend / alter / modify any ground or grounds during the pendency of the appeal."

The brief facts of the case are that during the course of assessment proceedings, the Assessing Officer observed that assessee along with two other parties had purchased immovable property for a consideration of ₹8 lakhs on 20-03-2012. As per the sale deed, the assessee's share in the stamp duty was ₹14,812/-, but the assessee was unable to provide source of funds for payment of such stamp duty. Accordingly, the assessing officer added a sum of ₹14,812/- as unexplained income of the assessee since the assessee could not explain the source of payment of such stamp duty. Secondly, the Assessing Officer observed that there are cash deposits of ₹28,28,808/- in the bank accounts held by the assessee. Since the assessee could not explain the source of such deposit in his bank account, the Assessing Officer also made an addition of ₹28,28,808/- to the income of the assessee.

In appeal, Ld. CIT(Appeals) dismissed the appeal of the assessee.

Before us, the assessee filed an Affidavit stating that he is from a small village in Dholera and ran a retail cloth store under the name "Kishorekumar Dhirajlal" in Dholera up until 2013. The assessee moved to Ahmedabad in 2012 and started working as a broker for the sale and purchase of Dholera lands. In 2012, the assessee along-with his sons purchased a residential property at Ghuma, Ahmedabad, for a sum of Rs. 34.5 lakhs, with each family member contributing to the purchase, as per the registered deed. In 2014, the assessee along-with his sons, also bought a joint shop at Kalash Residency in Ghuma, Bopal, for a sum of Rs.8 lakhs, where they started the Darshan Kirana Store. To fund these property purchases, the assessee used a combination of personal savings, premature fixed deposits, matured LIC policies, and the sale of shares. The assessee submitted that he maintained books of accounts, and the opening cash balance is derived from his earnings from the cloth business in Dholera. The assessee also submitted that he took unsecured loans from family members and friends, including his sons, daughter, and a relative and all transactions are reflected in his cash book. After receiving a notice under Section 148 of the Income Tax Act, the assessee appointed Mr. Arvind K. Thakkar, an advocate and tax consultant, to handle the matter. However, after filing the return, Mr. Thakkar did not submit various required documents, leading to an assessment order under Section 144 r.w.s.147. Mr. Thakkar then advised filing an appeal, and an appeal was filed with CIT(A), challenging the reopening of the notice as time-barred. When the CIT(A), passed its order on August 8, 2024, the assessee again approached Mr. Thakkar, who suggested filing a second appeal before the Tribunal. Unfortunately, Mr. Thakkar passed away on September 19, 2024. The assessee then approached the another consultant, who filed the second appeal before the ITAT on October 3, 2024. 6. After filing the appeal before the Tribunal, the assessee submitted an affidavit for the production of additional evidence, since the assessee for reasons cited above could not submit relevant documents during the assessment and appellate proceedings. In Affidavit, the assessee requested that in the interest of justice, the matter may be restored to file of the Assessing Officer and gave an assurance that the assessee would cooperate during the remand proceedings and submit all necessary explanations. Before us, the counsel for the assessee filed paper book, giving details of source of credits deposits in the bank account of the assessee. The counsel for the assessee submitted that the assessing officer had also added interest on fixed deposits and also the maturity amount of deposits as unexplained income of the assessee, in the assessment order. Further, the counsel for the assessee submitted that from the statement of the assessee, it is evident that the assessee had also made several withdrawals from his bank account, during the impugned year under consideration and no credits for such withdrawals were also given by the assessing officer, while making the additions in hands of the assessee. Accordingly, in light of the aforesaid circumstances, the counsel for the assessee submitted that in the interest of justice, the matter may be restored to the file of assessing officer for de novo consideration.

In response, the Ld. DR placed reliance on the observations made by the assessing officer and Ld. CIT(Appeals) in their respective orders.

We have heard the rival contentions and perused the material on record. On going to the facts of the instant case as mentioned in the preceding part of our order, we are of the considered view that the assessee has been able to give a reasonable cause for not causing appearance before the assessing officer and not being able to produce the necessary documents in support of the source of cash deposits appearing in his bank account. Accordingly, in interest of justice the matter is restored to the file of assessing officer for de novo consideration, after giving due opportunity of hearing to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 27/02/2025 (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad; Dated 27/02/2025 TANMAY, Sr. PS(SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER आदेश की प्रतिलिपि अग्रेषित/