GANESAN BAKIYARAJ,KANCHIPURAM vs. ITO, WARD-2, KANCHIPURAM

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ITA 3181/CHNY/2018Status: DisposedITAT Chennai06 January 2021AY 2012-133 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the bank account showed cash deposits and immediate withdrawals for Demand Drafts. In the interest of justice, the issue requires a fresh examination by the AO.

What were the facts?

The assessee's case was re-opened due to huge cash deposits in a bank. The Assessing Officer (AO) completed the assessment ex-parte as the assessee did not respond to notices, treating the cash deposits as income. The CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether the cash deposits in the bank account, which were immediately withdrawn for Demand Drafts, should be treated as the assessee's income without considering the explanation.

Which sections of the Income-tax Act were involved?

Section 147,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “ C ” BENCH, CHENNAI

Before: SHRI DUVVURU RL REDDY & SHRI S. JAYARAMAN

For Respondent: Shri. G. Johnson, Addl. CIT
Hearing: 04.01.2021Pronounced: 06.01.2021

आदेश/ O R D E R

PER S. JAYARAMAN, ACCOUNTANT MEMBER:

1.

The assessee filed this appeal against the order of the Commissioner of Income Tax (Appeals)-7, Chennai, in dated 31.08.2018 for assessment year 2012-13.

2.

Shri. Ganesan Bakiyaraj, the assessee, filed his return of income for the assessment year 2012-13. On receipt of information that the assessee made huge cash deposits in Indian Bank, the case was re-opened u/s. 147. Since, the assessee has not responded to various notices issued by the AO, the Assessing Officer completed the assessment u/s. 144, assessing the cash deposited in the Bank as an income of the assessee. Aggrieved, the assessee filed an appeal before the CIT(A) and the Ld. CIT(A) dismissed the appeal. Aggrieved against that order, the assessee filed this appeal.

3.

The case was heard through video conferencing. The Ld. AR submitted that the assessee was earning some commission from the lorry operators, who were lifting the sand from the quarry. Since, the Government introduced a new procedure by which the sand lorry owners can make payment only by Demand Draft for lifting the sand, which was not practicable for the lorry owners, the assessee collected cash from the lorry owners, put it in his bank account and took Demand Draft and gave it to the lorry operators on a commission. The Assessing Officer assessed the entire cash deposits made in the bank account which was immediately withdrawn for taking D.Ds, without considering the fact that the amount deposited was collected for the purpose of taking the D.Ds.

Therefore, the Ld. AR submitted that since the assessee’s case was not considered on merits, he may be given due opportunity to explain the entire facts and circumstances with available material so that the case may be considered on merits. Per contra, the Ld. DR submitted that if the issues are remitted back to the AO for due examination, he has no objection to the same.

4.

We heard the rival submissions, Prima Facie, the bank account reflects cash deposits and immediate withdrawal towards D.Ds. Therefore, in the interests of justice, this issue requires a fresh examination. Therefore, we remit this issue back to the AO for a fresh examination. The assessee shall lay all material/evidences in support of his contention and duly comply with the requirements of the AO in accordance with law. The AO after affording adequate opportunity to the assessee shall determine the income of the assessee in accordance with law.

5.

In the result, the assessee’s appeal is treated as partly allowed for statistical purposes.

Order pronounced on 06th January, 2021 at Chennai.

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