CHIRAIVELU UDAYA KUMAR,CHENNAI vs. ITO NON CORPORATE WARD-15(5), CHENNAI

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ITA 3492/CHNY/2019Status: DisposedITAT Chennai27 October 2021AY 2016-174 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, considering the assessee's submission of doing a milk business and the need for a fair opportunity, decided to give the assessee another chance to present their case before the AO. The matter was set aside and remitted back to the AO for fresh assessment.

What were the facts?

The assessee filed a return of income, but the AO completed the assessment under Section 144 by adding the entire cash deposited in the bank account during demonetization as income, as the assessee did not comply with the notices. The CIT(A) confirmed the AO's order.

What were the issues?

Whether the AO was justified in making an addition based on cash deposits without providing an opportunity to the assessee to explain the source, and whether the CIT(A) erred in confirming the same.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 142(1),Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: SHRI V. DURGA RAO & SHRI G. MANJUNATHA

Hearing: 20.10.2021Pronounced: 27.10.2021

आदेश / O R D E R

Per V. Durga Rao, Judicial Member:

1.

This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals)-15, Chennai in dated 31.10.2019 relevant to the Assessment Year 2016-17.

2.

The brief facts of the case are that the assessee is an individual, filed his return of income declaring total income of Rs. 4,74,310/- and the same was processed u/s. 143(1) of the Income Tax Act, 1961 (hereinafter as "the Act"), after due process assessment was completed. In the assessment order, the A.O has noted that the assessee has deposited certain cash during the demonetization period.

A Notice u/s. 142(1) of the Act dated 09.10.2018 along with questionnaire was issued. However, there were no compliance from the assessee for the above notice therefore, the A.O has added the entire income in his bank account at Rs. 74,48,350/-, income returned at Rs. 4,74,310/- and assessed total income of Rs. 79,22,660/- and assessment was completed u/s 144 of the Act by order dated 21.12.2018.

3.

The assesse filed an appeal before the ld. CIT(A). However, the assesse has not filed any details and not given any proper explanation before the Ld. CIT(A) therefore, the Ld. CIT(A) confirmed the order of the A.O.

4.

Before us, the ld. Counsel for the assesse has submitted that the assesse is doing milk business, whatever amounts comes to his account the same has to withdraw and deposit to the milk company and 3 -: all the details are available with him, one more opportunity may be given to the assessee to substantiate his case before the A.O.

5.

On the other hand the learned Departmental Representative has not raised any serious objection to the submissions of the learned counsel for the assesse.

6.

We have heard both the sides, perused the materials available on record and gone through the orders of the authorities below.

7.

The A.O has passed order u/s. 144 of the Act and assessment was completed based on the cash deposits available in the bank account. On appeal, the Ld. CIT(A) confirmed the order of the A.O.

The case of the assessee before us is that he is having a milk distribution agency and collects the cash from customer on behalf of the company and deposits the same in bank account and subsequently withdraws the same and make payment to the milk company.

Therefore, the amount deposited in the bank account is not belonging to the assessee he only will get commission from the company. The assesse has not filed any details before the A.O even before the Ld. CIT(A). Therefore, in the interest of justice and also on the ground that the principles of the natural justice by taking into consideration of the status of the assessee being a small time business individual, we are of 4 -: the opinion that one more opportunity should be given to the assessee to substantiate his case before the A.O. Accordingly, we set aside the order passed by the Ld. CIT(A) and remit the matter back to the file of the A.O to pass fresh assessment order denovo in accordance with law, after giving reasonable opportunity to the assessee. We also direct the assessee to file all the necessary details before the A.O to substantiate his case. In view of the above, the appeal filed by the assessee is allowed for statistical purposes.

8.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

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