Loading judgment…
Facts
The assessee, proprietor of M/s.Deccan Agencies, deposited substantial cash during the demonetization period for Assessment Year 2017-18. The Assessing Officer initially added Rs. 1,35,52,459 as unexplained cash credit under Section 68, which the CIT(A) subsequently reduced to Rs. 51,69,000. The assessee appealed, arguing the cash represented deposits from customers.
Held
The Tribunal observed that the assessee's contention of customer deposits lacked documentary evidence and details of goods supplied. Given the submission of additional evidence under Rule 29, the Tribunal remitted the matter back to the Assessing Officer for a de novo examination, directing that the assessee be provided a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) was justified in sustaining the addition of unexplained cash credit under Section 68, related to cash deposits made during demonetization, and if the assessee provided adequate evidence for the source of these deposits.
Sections Cited
133(6), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Inturi Rama Rao & Shri Prakash Chand Yadav
O R D E R
Per Prakash Chand Yadav, JM :
The present appeal of the assessee is arising from the order of the National Faceless Appeal Centre / learned Commissioner of Income-tax (Appeals) [“CIT(A)” for short] dated 27.03.2024, having DIN & Order No.ITBA/NFAC/S/250/2023- 24/1063456687(1) and relates to the assessment year 2017- 2018.
The assessee has raised ten grounds of appeal, however, the solitary issue is to be decided whether the CIT(A) was justified in sustaining the addition of Rs.51,69,000 added by the Assessing Officer on account of unexplained cash credit for
Brief facts of the case as coming out from the orders of the authorities below are that the assessee is proprietor of one M/s.Deccan Agencies, which is engaged in the trading of home appliances and SIM cards. The assessee filed her return of income for the impugned year declaring an income of Rs.56,48,540. The return of income filed by the assessee was picked up for scrutiny for verifying the cash deposited by the assessee during the period of demonetization. During the course of assessment proceedings, the AO inter alia observed that huge cash was deposited by the assessee during demonetization period. The AO conducted inquiries u/s.133(6) of the Act from the concerned banks and also sought explanation of the assessee with respect to the source of this amount. Dissatisfied with the explanation of the assessee the added this amount as unexplained cash credit u/s.68 of the Income-tax Act, 1961, amounting to Rs.1,35,52,459.
Aggrieved with the order of the AO, the assessee filed an appeal before the learned CIT (A). The ld.CIT(A) after considering the entire gamut of the facts, partly allowed the appeal of the assessee, and has sustained the addition of Rs.51,69,000 only.
Aggrieved with the order of the ld.CIT(A), the assessee has come up in appeal before us. The learned Counsel for the assessee argued that the cash has been deposited by various
The learned DR, appearing on behalf of the Revenue, relied upon the orders of the authorities below.
We have heard the rival submissions and perused the material available on record. The arguments advanced by the assessee that the customers have deposited these amounts directly in the bank account of the assessee, is not supported with any documentary evidences. The assessee has also failed to provide any details vis-à-vis goods supplied to the so called customers who have deposited the amount in the bank account of the assessee. The learned Counsel for the assessee has placed on record certain additional evidences before us under Rule 29 of the Income Tax Rules, 1962. Considering the facts and circumstances of the case, we remit this matter back to the file of the AO for examining the case de novo, in accordance with law, needless to say that the AO will afford a reasonable opportunity of being heard to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 22nd day of May, 2025.