MANOJ KHANA,SHAHJAHANPUR vs. INCOME TAX OFFICER-I(4), SHAHJAHANPUR

2017-18 against impugned appellate order dated 15/10/2025 (DIN & Order No.ITBA/APL/S/250/2024- 25/1072192447(1) of ADDL/Jt. Commissioner of Income Tax (Appeals).

(A.1) The facts of the case, in brief, are that the assessee is an individual and retail trader dealing in gold & silver ornaments and pawning business and maintains two sets of accounts i.e. for retail trade and pawning business. The assessee filed his return of income on 18/11/2016 declaring total income of Rs.4,90,000/-. Assessment order dated 21/11/2019 was passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (“the Act” for short) wherein the assessee’s total income was assessed at Rs.12,78,520/- as against returned income of Rs.7,88,520/-. In the aforesaid assessment order, an addition of Rs.4,90,000/- was made on account of unexplained money under section 69A of the Act. Being aggrieved, the assessee filed appeal in the office of the learned CIT(A). Vide impugned appellate order dated 15/01/2025, the learned CIT(A) confirmed the aforesaid additions of Rs.4,90,000/- and dismissed the assessee’s appeal The present appeal has been filed by the assessee in Income Tax Appellate Tribunal against the aforesaid impugned appellate order dated 15/01/2025 of learned CIT(A).

(B) We have heard the rival parties and have gone through the material placed on record. During the course of hearing learned Counsel for the assessee submitted the assessee had deposited Rs.4,90,000/- out of cash in hand. He further submitted the assessee has a license to maintain a pawning set (Third Banker) and it is his business to lend money in cash after hypothecating article and charge interest as per norms. The assessee always maintains a cash balance to run its business. Learned Counsel for the assessee submitted that the Assessing Officer erred in passing the order under section 143(3) of the Act without considering the cash flow statement, month wise break up of receipts and deposit in cash, sales and purchases without pointing out any defect in account books. He also submitted that the learned CIT(A) accepted the Assessing Officer’s version and has not passed speaking order. In view of the foregoing, we are of the considered opinion that the Assessing Officer rejected the cashflow statement submitted by the assessee stating that it appears to be unrealistic. However, this observation has been made without any basis and without any convincing reason. In view of the submissions made by the learned Counsel for the assessee, we set aside the impugned appellate order dated 15/01/2025 to the file of learned CIT(A) and we direct the learned CIT(A) to pass de novo order in accordance with law after providing reasonable opportunity of being heard to the assessee.