ITO, NEW DELHI vs. MRS. SHEETAL MEHRA, NEW DELHI

These three appeals by the Revenue are preferred against the order of the CIT(A)- 14, New Delhi dated 01.02.2016 pertaining to A.Ys 2007-08, 2008-09 and 2009-10. Since the underlying facts in the issues raised by the Revenue in all these three appeals pertain to same assessee and were heard together, these are being disposed of by this common order for the sake of convenience and brevity.

For the sake of convenience, we have considered the facts in assessment year 2007-08.

During the course of scrutiny assessment proceedings, the A.O observed that the assessee has deposited cash of Rs. 1.41 crores in her bank account at ICICI Bank. The assessee was asked to explain the source of cash deposit. In her reply, the assessee claim that sales made by her are mostly in cash. The Assessing Officer asked the assessee to furnish bills and vouchers of purchases and sales, copy of VAT return and certified copy of trade licence for trading in bullion and jewellery.

On receiving nothing, the Assessing Officer treated the entire cash deposit as unexplained investment.

The assessee carried the matter before the ld. CIT(A) and in addition to what has been claimed before the Assessing Officer, it was pleaded that only peak credit should be added.

The ld. CIT(A) agreed with the alternative plea and directed the Assessing Officer to restrict the addition to Rs. 9,59,158/- by taking peak credit as income from undisclosed sources.

Before us, the ld. DR strongly contended that the plea taken by the assessee before the ld. CIT(A) was never taken before the Assessing Officer and without calling for any remand report, the ld. CIT(A) has simply accepted the working given by the assessee.

Per contra, the ld. counsel for the assessee stated that in such a scenario, the matter may be restored to the file of the Assessing Officer for fresh adjudication after due verification.

We have given thoughtful consideration to the orders of the authorities below. In all the three assessment years under consideration, the only dispute is in relation to cash found deposited in the ICICI Bank account. It is true that though the assessee has claimed to have traded in bullion and gold jewellery before the Assessing Officer, but could not adduce any evidence in relation to the same. It is equally true that for the first time the assessee took the plea before the ld. CIT(A) that since there are frequent deposits and withdrawals, only peak amount should be added. This plea of the assessee has been accepted by the ld. CIT(A) without getting it verified from the Assessing Officer. Therefore, in the interest of justice and fair play, we restore this issue to the file of the Assessing Officer for de novo assessment. The Assessing Officer is directed to decide the entire issue afresh after giving reasonable opportunity of being heard to the assessee.

In the result, all the three appeals of the Revenue in 2447 & 2448/DEL/2016 are allowed for statistical purposes.