HARSHANG KAUSHIKKUMAR RAMI,AHMEDABAD vs. THE ITO,WARD 1(2)(3), AHMEDABAD

This appeal is filed by the Assessee against order dated 21.06.2024, passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2017-18.

The assessee has raised the following grounds of appeal :-

The assessee filed return of income on 16.02.2018 declaring total income of Rs.2,98,820/-. As per the information, it is observed that the assessee had an account with M/s. Renuka Mata Multi State Urban Co-operative Credit Society Limited on 26.05.2017. The assessee made cash deposits of Rs.5,00,30,946/- which remained unexplained during the Assessment Year (A.Y.) 2017-18. The Assessment Year: 2017-18 Harshang Kaushikkumar Rami vs. ITO Page 2 of 4 assessee’s case was reopened under Section 147 of the Income Tax Act 1961 with prior approval of the Competent Authorities. Accordingly, notice under Section 148 of the Act was issued to the assessee on 31.03.2021 which was duly served to the assessee. The assessee did not respond and, therefore, the Assessing Officer issued notice under Section 133(6) of the Act to State Bank of India and M/s. Renuka Mata Multi State Urban Co-operative Credit Society Limited requesting to furnish Bank account statement for the period under consideration. Since no response was received from the Bank Authorities, the Assessing Officer passed Assessment Order under Section 147 read with Section 144 read with Section 144B of the Act and made addition of Rs.5,00,30,946/- under Section 69A of the Act.

Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The Ld. AR submitted that the Assessing Officer has not taken cognisance of the Bank statements into consideration which was filed before the Assessing Officer. The Ld. AR submitted that the assessee has done trading business of brass products and supplied goods to various parts of India from where cash was deposited in their respective Bank account. The said amounts were withdrawn at Jamnagar for making URD purchase for subsequent supply of goods and all the goods/business was considered and estimation was made on the basis of history of other assessee in similar business. In the present case, the assessee sold mobile and related goods out by making URD purchases in similar cases of URD purchases. Rajkot Bench or Tribunal held that profit rate of 1.25% is reasonable. The assessee has relied on various decisions of Rajkot Bench of ITAT. The Ld. AR also relied upon the decision of Hon’ble Gujarat High Court in the case of CIT vs. President Industries 258 ITR 654, decision of Hon’ble Apex Court in the case of State of Orissa vs. Maharaja Shri B.P. Singh Deo, 76 ITR 690 and various other case always including that of PCIT vs. Shitalben Saurabh Vora. the Ld. AR submitted that the said deposits made be treated as sales and not undisclosed investments at all as the past history of the assessee clearly shows that similar business was done in the past and the reasonable estimate of the income was Assessment Year: 2017-18 Harshang Kaushikkumar Rami vs. ITO Page 3 of 4 done. In alternate, the assessee submitted that the Assessing Officer made addition of entire cash deposits in Bank account and the Bank statement attached and submitted before the Authorities clearly set out that the assessee deposited cash in piecemeal vide one lakh, three lakhs to maximum nine lakhs on various dates and the same were withdrawn subsequently in cash through ATM and again redeposited in Bank. Looking into pattern of transactions, the same funds were reutilised for deposits made in Bank. Thus, the peak balance of Rs.23,85,567/- should he sustainable.

The Ld. DR submitted that there was no evidence before the Assessing Officer as well as before the CIT(A) and in fact the assessee has actually not stated the real business of the assessee of the activities related to the business. Cash component of deposit was, therefore, not explained at all by the assessee before the Assessing Officer as well as a before the CIT(A).

We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that M/s. Renuka Mata Multi State Urban Co-operative Credit Society Limited and its Bank statement as mentioned by the ld. AR which is at page nos.35 to 45 of the Paper Book is actually account ledger for Harshang Kaushikkumar Rami i.e. the assessee for the period from 18.05.2015 to 31.02.2017. The Assessing Officer has mentioned the Bank account of State Bank of India as well as in paragraph no.4 of the same is not submitted before the Authorities as well as before us. From the perusal of the account ledger, it cannot be set out that the assessee is doing any business but there is only deposit of cash but on some occasion there is component of transaction of Harshang Kaushikkumar Rami mentioned in the said account ledger. This requires verification and adjudication and in fact the assessee has filed affidavit. All these documents need to be verified in consonance with the information received by the Income Tax Department. Thus, the matter is remanded back to the file of the Assessing Officer for proper verification and adjudication of the issues alongwith evidences filed by the assessee and adjudicate the same as per Income Tax Law. The assessee be given opportunity of hearing by following the principles of natural justice.