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Facts
The assessee, engaged in wholesale trading of edible oils, is appealing an order by the CIT(A) which upheld the addition of unexplained cash deposits of Rs. 15,50,000 made during demonetization and the estimation of business income at 8% on turnover under section 44AD. The assessee failed to provide sufficient evidence or books of account to substantiate the source of these deposits during assessment.
Held
The Tribunal condoned the delay in filing the appeal due to the assessee's health issues. The Tribunal admitted additional evidence filed by the assessee, which was not produced before the lower authorities. Consequently, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for a fresh decision after providing the assessee an opportunity to be heard.
Key Issues
1. Whether the addition of unexplained cash deposits and estimation of income under section 44AD by the AO was justified. 2. Whether the CIT(A) erred in dismissing the appeal without considering additional evidence and principles of natural justice.
Sections Cited
44AD, 69A, 80C, 270A, 145(3), 143(3), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA-PATNA ‘e-COURT’, KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2017-18 dated 04.09.2024.
The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. For that the impugned order is bad in law as well as on facts and requires to be annulled.
2. For that the Ld. CIT(A) has erred in dismissing the ground related to addition u/s 69A merely for want of specific application regarding the admittance of additional evidence that was submitted during the course of appellate proceeding. In the light of principles of natural justice and provisions of Rule 46A, a remand report could have been procured from the A.O.
3. The Registry has informed that the appeal is time barred by 212 days in filing the appeal by the assessee. However, the assessee filed a petition before the ITAT dated 30th June, 2025 in support of condonation of delay of 212 days mentioning that she has been struggling with health issues that have plagued her mental and physical health for almost the entirety of last financial year and till date along with a copy of prescription, which evidences her health background and current status. She also stated that the delay in filing the appeal was purely unintentional and occurred due to circumstances beyond her
Considering the facts and circumstances of the case, we are of the view that the assessee was prevented from filing the appeal within the stipulated time. Therefore, we are inclined to condone the delay of 212 days. Hence the delay is condoned and the appeal is admitted for hearing.
Brief facts of the case are that the assessee is an individual, who is running a wholesale business as her proprietorship concern in the name of M/s. Gwalior Industries. The assessee filed her return of income electronically showing aggregate income of Rs.6,48,570/-. The case was selected for complete scrutiny under CASS for examining cash deposit during demonetization period. During the course of assessment proceeding, the ld. Assessing Officer issued several notices, which were not responded. However, on 07.11.2019, the assessee filed reply in response to the show-cause notice dated 01.11.2019 asking to furnish bank account statement, KYC details, cash deposits made during demonetization period and pre & post-demonetization period along with sources thereof. The Bank informed that only Rs.15,50,000/- was deposited in old currency by the assessee out of total deposit of Rs.68,80,120/- during the demonetization period. The assessee failed to furnish books of account to substantiate the source of said cash