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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: SH. R. K. PANDASH. KULDIP SINGH
Appellant by Sh. Ved Jain, CA Respondent by Sh. S. S. Rana, CIT DR Date of hearing: 25/11/2019 Date of Pronouncement: 28/11/2019 ORDER PER R.K PANDA, AM:
This appeal filed by the assessee is directed against the exparte order dated 02.11.2016 of the CIT(A)-21, New Delhi relating to A.Y. 2011-12.
Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 29.03.2012 declaring total income of Rs.2,50,585/-. The AO completed the assessment u/s. 143 (3) on 24.03.2014 determining the total income of the assessee at Rs.4,55,34,030/- wherein he made (i) addition of Rs.71,95,700/- on account of cash deposit in his bank account as income from undisclosed sources and (ii) addition of Rs.3,80,06,080/- on account of income from undisclosed sources being profit @ 8% on the various amounts credited in the bank account of the assessee except cash deposits. Since none appeared before the CIT(A) despite repeated opportunities granted by him, the Ld. CIT(A) in his exparte order dated 02.11.2016 upheld the various additions made by the AO.
Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds :- On the facts and circumstances of the case, the order passed by the 1. learned Commissioner of Income Tax (Appeals) [ CIT(A) ] is bad both in the eye of law and on facts. (i) On the facts and circumstances of the case, the learned CIT(A) has 2. erred both on facts and in law in passing the order without giving proper and adequate opportunity to the assessee to represent its case and in gross violation of principle of natural justice. (ii) That the non-appearance before the CIT(A) was on account of reasons beyond the control of the assessee. (i) On the facts and circumstances of the case, the learned CIT(A) has 3. erred both on facts and in law in Confirming addition of Rs.3,80,06,080/- made by the AO as income earned by the assessee by applying a presumptive rate of 8% on the assumed turnover of Rs.47,50,76,011/-. (ii) That the above said inference was drawn by the AO in utter disregard to the actual facts of the case and the explanation and evidences submitted by the assessee in support of its contention. (iii) That the above said addition is without any basis and was made misinterpreting the facts of the case. 4(i) On the facts and circumstances of the case, the learned AO has erred both on facts and in law in confirming addition of Rs.1,95,700/- on account of the cash deposit in the bank account made by the AO as income from undisclosed source.
(ii) That the above said addition was made ignoring the explanation and evidences submitted by the assessee that the cash deposit represents exactly the same amount of cash withdrawn from another bank account on the same date.
5. On the facts and circumstances of the case, the learned AO has erred both on facts and in law in confirming the action of the AO in drawing adverse inference on the basis of information and material collected at the back of the assessee without providing a copy of the same and an opportunity to rebut the same as statutorily required under Section 142(3) of the Act. 6(i) On the facts and circumstances of the case, the additions made by the AO in the assessment order are otherwise untenable in the law applying the real income theory. (ii) That the learned CIT(A) was not justified in confirming such huge addition without there being any iota of evidence that the assessee has earned so much income.
That the appellant craves leave to add, amend or alter any of the grounds of appeal.
The Ld. Counsel for the assessee at the outset submitted that the assessee owns various bank accounts and the amounts transferred from /credited in the bank account were infact transferred from his own bank accounts maintained with other branches / banks. Therefore, the CIT(A) was not justified in confirming the additions made by the AO. He submitted that given an opportunity the assessee is in a position to substantiate with evidence to the satisfaction of the AO or the CIT(A) as case may be by explaining each and every deposit in the bank account.
The Ld. DR on the other hand strongly opposed the arguments advanced by the Ld. Counsel for the assessee and submitted that Ld. CIT(A) has given enough opportunities to the assessee to substantiate his case. Therefore, the matter need not be set aside and should be decided here itself by dismissing the grounds raised by the assessee.
We have considered the rival arguments made by both the sides, perused the orders of the authorities below and the paper book filed on behalf of the assessee. We find the AO in the instant case made addition of Rs.71,95,700/- being the amount of cash deposit in the bank account as income from other sources. Further the AO made addition of Rs.3,80,06,080/- by estimating the profit @ 8% on the various credit entries appearing in the bank account other than cash deposits. It is the submission of the Ld. Counsel for the assessee that the Ld. CIT(A) without going through the details already filed before the AO has sustained the addition so made. It is also his submission that the various credit entries appearing in the bank accounts are infact transfer entries from the own bank account of the assessee maintained with other banks. It is the submission of the Ld. Counsel for the assessee that given an opportunity, he is in a position to substantiate with evidence to the satisfaction of the AO or CIT(A) regarding cash deposits as well as cheque deposits in the bank accounts maintained by the assessee. Considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate its case and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised
by the assessee are accordingly allowed for statistical purposes.
7. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 28.11.2019.