SANJEEV AGARWAL,LUCKNOW vs. INCOME TAX OFFICER, NFAC

2017-18 against impugned appellate order dated 26/12/2024 (DIN & Order No.ITBA/NFAC/S/250/2024- 25/1071566202(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short].

(B) In this case assessment order dated 29/03/2022 was passed u/s 147 r.w.s. 144B of the Income Tax Act, 1961 (“the Act” for short) whereby assessee’s total income was determined at Rs.42,64,790/- as against returned income of Rs.7,54,790/-. In the aforesaid assessment order, an addition of Rs.35,10,000/- was made by treating cash deposits in bank as unexplained. The assessee filed appeal in the office of the learned CIT(A). Vide impugned appellate order dated 26/12/2024, the learned CIT(A) partly allowed the assessee’s appeal. The relevant portion of the order of learned CIT(A) is reproduced as under:

(B.1) Aggrieved, the assessee has filed the present appeal in Income Tax Appellate Tribunal. In the course of appellate proceedings in Income Tax Appellate Tribunal, a synopsis was filed from the assessee’s side, which is reproduced below for the ease of reference:

(C) At the time of hearing, learned Counsel for the assessee relied on the aforesaid synopsis. He further relied on the order of Hon'ble Gujarat High Court in the case of Filco Trade Centre (P.) Ltd. vs. Dy. C.I.T. [2024] 169 taxmann.com 401 (Gujarat). In particular he drew our attention to the following portion of the aforesaid order of Hon'ble Gujarat High Court:-

“9.4…………as held by this court in case of Kantibhai Dharamshibhai Narola (supra), wherein, this court has laid down the following aspects with regard to the law of reopening of assessment under section 147 of the Act which is well settled legal propositions wherein, it is held as under:

(D) Learned D.R. relied on the order of learned CIT(A).

(E) Both sides have been heard. Materials on record have been perused. It has been found that in paragraph 4(b) of the impugned appellate order of learned CIT(A), relevant portion of which has already been reproduced in paragraph (B) of this order, the learned CIT(A) has acknowledged that the cash deposits in the bank account made by the assessee were partly out of business sales and partly out of opening cash balance. However, the learned CIT(A) has not brought on record any material to doubt the genuineness of business sales and the genuineness of opening cash balance. Without any reference to any material to doubt the genuineness of business sales and the opening cash, the CIT(A) has still confirmed an addition of Rs.3,30,000/- on ad hoc and estimation basis. However, there is no material to support the aforesaid estimation. The learned CIT(A) has stated in his order that he was confirming the aforesaid addition of Rs.3,30,000/- to safeguard the interest of Revenue. This approach, that the learned CIT(A) was to protect the interest of Revenue is disapproved. It is no job of the learned CIT(A) to protect the interest of Revenue. His job is to decide the appeal in accordance with law. When, in the present case, there is no material to support the addition or to doubt either the opening cash balance or business sales, there was no basis for confirming the addition of aforesaid amount of Rs.3,30,000/-. In view of the foregoing, the aforesaid addition of Rs.3,30,000/- sustained by learned CIT(A) is hereby deleted.