Loading judgment…
Facts
The assessee deposited cash of ₹ 10,50,000/- during the demonetization period. Despite being issued notices under sections 142(1) and 144 of the Income Tax Act, the assessee initially did not file a return, and later filed it belatedly. The Assessing Officer (AO) made additions of ₹ 8,50,000/- on account of cash deposit and ₹ 5,00,000/- as unexplained cash credit.
Held
The Tribunal noted that the AO and the Commissioner had not explicitly rejected the belatedly filed return of income and the supporting documents. The Tribunal observed that the facts and circumstances, including the documentation submitted by the assessee regarding sales and a loan for purchase of shop/godown, needed proper examination.
Key Issues
Whether the additions made by the AO were justified without a proper examination of the assessee's belatedly filed return and supporting documents, and if the assessee provided adequate explanation for the cash deposits and credits.
Sections Cited
250, 142(1), 144, 115BBE, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH : NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL
For Assessee Mr. Kapil Hirani, Ld. Adv For Revenue Sh. Anand Nagrale , Ld. DR Date of Hearing : 17.06.2025 Date of Pronouncement : 17.06.2025 ORDER
This appeal has been preferred by the assessee against the order dated 31/03/2024 impugned herein passed by the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [in short, “Ld. Commissioner”] u/sec. 250 of the Income Tax Act, 1961 (for short, “the Act”) for the Assessment Year (for short, “AY”) 2017- 18.
2 ITA.No.269/NAG/2024 2. In the instant case, as per the ITBA system, the information was received by the Assessing Officer (for short, “A.O.”) that the assessee had deposited cash of ₹ 10,50,000/– in his bank account maintained at Nagpur Nagrik Sahakari Bank, Dist. Nagpur during the demonetization period i.e. from 09/11/2016 to 30/12/2016. However, for the assessment year under consideration, assessee has not filed any return of income and, therefore, in order to examine the case of the assessee, a notice u/sec. 142(1) of the Act dated 14/03/2018 was issued to the assessee requesting him to furnish the correct and true return of income for the said assessment year. The assessee, though, has not replied to the said notice issued u/sec. 142(1) within the time framed, however, subsequently on dated 12/06/2019 filed its return of income and, therefore, the A.O. on realising that the assessee has not filed his return of income for the said assessment year, out of such transactions, issued notice u/sec. 144 of the Act to the assessee. In response to the same, the assessee filed copy of balance sheet, Profit & Loss Account, ledger of major expenses and other relevant details, on perusing and verification of the same, it was observed by AO that the assessee is a retailer dealing in kirana and general items. Though, the assessee had deposited cash of ₹ 10,50,000/– during the demonetization period, however failed to explain the transaction along with documentary evidence and nature and source of cash deposit and also not given any explanation. Consequently, the A.O. made the addition of ₹ 8,50,000/– on account of cash deposit made during the demonetization period and taxed the same @ 60% u/sec. 115BBE of the Act. The A.O. further made the addition of ` 5,00,000/– u/sec. 68 of the Act being cash credit as un-explained.
3 ITA.No.269/NAG/2024 3. The assessee being aggrieved, challenged the said additions before the Ld. Commissioner, however of no avail. The Ld. Commissioner by passing cryptic order, affirmed the aforesaid additions, therefore, assessee being aggrieved has preferred this appeal before this Tribunal.
Heard the parties, perused the material on record. The assessee through documents, demonstrated that the amount of ₹ 8,50,000/– pertains to sale carried out through kirana & general items and ₹ 5,00,000/– pertains to purchase of shop/godown from loan amount of ₹ 5,00,000/– taken from his relative through cheque, which was eventually deposited in his personal savings bank account and thereafter transferred to current account of the business and paid the same to the seller by debiting ‘shop account’ and credited the same in the ‘ca capital account’. . No doubt, the Assessee has filed return of income on 12/06/2019 belatedly, however, it is a fact that the A.O. and/or the Ld. Commissioner has not rejected the same and even otherwise not mentioned about that particular return of income in the respective orders. Admittedly, the aforesaid facts and circumstances and the documents remained to be examined by the authorities below. Thus, considering the peculiar facts and circumstances of the case in totality, this Court is inclined to remand the instant case to the file of the A.O. for decision afresh subject to verification of the documents submitted by the Assessee and without making any roving enquiry.
4 ITA.No.269/NAG/2024 5. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 16.06.2025.