INCOME TAX OFFICER, WARD 1 TPS, ALUVA, INCOME TAX OFFICE, ALUVA vs. CIJO JOSEPH, ANGAMALY

In both the appeals, there were delays of 29 days in filing the appeals. The assessee filed condonation petitions explaining the reasons for such delays. After examining the submissions and being satisfied

ITA No. 604/Coch/2024 - Brief facts of the case are that the assessee is engaged in the business of distribution of LPG cylinders and allied products. For A.Y. 2017–18, assessee filed its return declaring an income of Rs. 41,87,750. The case of the assessee was selected for scrutiny, and notices under sections 143(2) and 142(1) were issued.

During assessment proceeding, the AO noted that the assessee had made cash deposits of Rs. 1,16,42,000 during the demonetisation period. The assessee was called upon to explain the source. Assessee complied to the notices however AO did not satisfy with the explanation of the assessee, the AO treated entire cash deposit amounting to Rs. 1,16,42,000 as unexplained money under section 69A of the act. The Assessing Officer made further additions as under:

Aggrieved by the above order assessee went in appeal before the learned CIT(A), where the assessee contended that being an LPG distributor for BPCL, it was permitted under RBI vide Circular dated 09.11.2016 to accept Specified Bank Notes during the demonetisation period. The nature of the business involved substantial cash sales, and the sales proceeds were duly recorded in the books and deposited in the bank. Moreover, BPCL monitored stock and sales, leaving no scope for manipulation. The cash deposits corresponded with recorded sales, and no inconsistencies were found in the books. Since section 69A of the Act applies only where the amount is not recorded in the books, therefore learned CIT(A) viewed that the addition was not sustainable.

Dissatisfied with the above order revenue is in appeal before this tribunal at the time of hearing the learned DR stated that impugned order passed by CIT(A) is bad in law and CIT did not call remand report under rule 46A of the act by allowing appeal of the assessee. Therefore the impugned order passed by CIT (A) needs to be set aside by upholding the order of the AO on the other hand learned AR supported the decision of the Ld. CIT (A).

We, after hearing the rival submission of the parties and perusing the material available on record, find that the cash deposits were fully accounted for and related to the assessee’s regular business, which was regulated by BPCL and covered by RBI’s circular, which is clearly reflected in his order. Similarly, issue relating to the capital introduction the assessee explained that the amount of Rs. 10,00,000 – Drawn from partnership firm M/s CDS Ventures, Angamaly, Rs. 4,03,980 – Redemption of mutual fund units, Rs. 2,00,180 – received from Muthut Finance and Rs. 62,318 – Kuri amount. The learned CIT(A) found the sources duly explained with supporting evidence and deleted the additions. When the issues involved in the appeal are supported by

ITA No. 608/Coch/2024 – In this appeal, the learned PCIT vide order dated 22.03.22 passed under section 263 of the Act had earlier revised the original assessment order dated 12.12.2019 passed under section 143(3) of the Act thereby directing the Assessing Officer to reframe the assessment. The Assessing Officer passed an order on 14.03.2023 making similar additions as was in the original assessment order dated 12.12.2019. Thereafter, the Ld. CIT(A) by order dated 29.03.2024 deleted the entire additions following his order in the appeal dated 29.03.2024 by setting aside the original assessment order dated 12.12.2019.Since the main additions have already been deleted in the connected appeal, therefore, the instant appeal filed by the Revenue does not survive. Accordingly, the Revenue’s appeal in ITA No. 608/Coch/2024 is also dismissed.

In the result, both the appeals of the revenue are dismissed.