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Facts
The assessee, a proprietor of a filling station, declared total income of Rs.8,49,870/-. During demonetization, the assessee made cash deposits of Rs.99,70,000/-. The Assessing Officer (AO) treated these as unexplained cash credits under Section 68 and added to the income, completing assessment under Section 143(3). Penalty proceedings under Section 271AAC(1) were also initiated.
Held
The Tribunal observed that the assessee failed to furnish supporting documents for cash deposits. However, considering the facts, the Tribunal restored the case to the Assessing Officer for one more opportunity to present evidence, cautioning the assessee for compliance.
Key Issues
Whether the cash deposits made during demonetization, without sufficient supporting documents, can be treated as unexplained cash credits? Whether the assessee deserves another opportunity to present evidence before the AO?
Sections Cited
68, 143(3), 115BBE, 271AAC(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA & SHRI NIKHIL CHOUDHARY
This appeal has been preferred by the assessee against the order dated 20.10.2023, passed by the National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2017- 18.
2.0 The brief facts of the case are that the assessee is the proprietor of M/s Gangotri Hi-Tech Filling Station, Haliapur and was engaged in retail trade of Petroleum products. The assessee e-filed his return of income for the year under consideration, in individual capacity, on 23.10.2017, declaring a total income of Rs.8,49,870/-. The case of the assessee was selected for scrutiny under CASS. The AO noticed that the assessee had made cash Page 2 of 5 deposits in Bank account No.18060200000183, maintained with Bank of Baroda. The assessee was required to furnish the details of month-wise cash sales, purchase, stock, cash flow, etc. and substantiate the cash deposits made in the aforementioned Bank account. The submission of the assessee before the AO was that the Petrol Pumps were allowed to take old Specified Bank Notes (SBN) till 3rd December, 2016 and that the assessee had made cash deposits of Rs.99,70,000/- from 09.11.2016 to 30.12.2016. Thereafter, the AO asked the assessee to furnish comparative trade results and details of stock. Since the assessee failed to offer satisfactory explanation and furnish necessary documents with regard to the aforementioned cash credits, the AO treated the same as unexplained cash credits and added the same to the income of the assessee under section 68 of the Income Tax Act, 1961 (hereinafter called “the Act’). The AO completed the assessment under section 143(3) of the Act, assessing the total income of the assessee at Rs.1,08,19,870/-.
2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under section 271AAC(1) of the Act separately.
3.0 Aggrieved, the assessee preferred an appeal before the Ld. First Appellate Authority, who dismissed the appeal of the assessee ex-parte qua the Assessee.
The order of the Ld. Commissioner of Income Tax (Appeal) is not based on the facts of the case and is not legal.
The authorities below have wrongly treated the sale proceeds amounting to Rs.99,70,000/-as unexplained cash credits.
Any other ground that may be taken up with the kind permission of the Hon'ble Bench.
5.0 None was present for the assessee when the appeal was called out for hearing. However, an application dated Nil, seeking adjournment was placed before us citing the reason that the Senior Counsel of the assessee, Shri Gurmeet Singh Walia was going out of station for some personal work on the date fixed for hearing and, therefore, it may not be possible to argue the case. However, looking into facts of the case, we reject the adjournment application and proceed to adjudicate the appeal.
6.0 The Ld. Senior D.R. had no objection to the restoration of appeal to the file of the Assessing Officer.
7.0 We have heard the Ld. Senior Departmental Representative and have also perused the material on record. The AO in his order had observed that the assessee had not furnished any supporting documents in support of the cash deposits made in the Bank account. The NFAC too, vide paragraph 5 (page 3) of Page 4 of 5 its order observed that the assessee did not furnish any books of account to substantiate the cash deposits in the Bank account during the period of demonetization and that the details of SBN and verified stock statements were also not furnished by the assessee. Looking into these facts of the case, we are of the considered view that the Assessee deserves one more opportunity to present his case and, therefore, we restore this file to the Office of the Assessing Officer with the direction to provide one more opportunity to the Assessee to present his case and produce the necessary evidences/documents in support of the transactions entered into by the Assessee. We also caution the Assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer would be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee.
8.0 In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 31/07/2025.