NIKULBHAI PATEL,BHARUCH NARMADA vs. THE ASSESSING OFFICER, ITO, WARD 2(5), BHARUCH

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4. The brief facts of the case are that the assessee is an individual engaged in agricultural activities. During the year under consideration, Assessing Officer found that cash of Rs. 10,79,400/- was deposited in the bank account of the assessee. The Assessing Officer initiated re-assessment proceedings Nikulbhai Patel vs. ITO Asst. Year – 2011-12 - 3– under Section 148 of the Act. The assessee had not filed return of income for the assessment year under consideration. However, despite issuance of several notices of hearing, the assessee did not submit details as called for and no proof with regards to sources of funds deposited / credited in the savings bank account of the assessee was submitted. The Assessing Officer observed that the assessee has simply submitted that the assessee was engaged in sugarcane agriculture farming and had primarily supplied sugarcane to Narmadakhand Sugarcane Manufacturing Unit. The assessee had furnished ledger account of Narmadakhand Sugarcane Manufacturing Unit to demonstrate that it is engaged in sale of sugarcane to the said entity. The Assessing Officer noted that the assessee had only submitted copy of land holding documents i.e. 7/12 extracts and has furnished a letter of Narmadakhand stating that it had made payment of Rs. 2,97,181/- to the assessee’s father towards sale of sugarcane. However, the mode of receipt of the said amount was not mentioned in the said letter. Accordingly, the Assessing Officer was of the view that the assessee was unable to furnish the source of deposit of funds in his bank account amounting to Rs. 10,79,400/- and same was added as unexplained income of the assessee.

5. In appeal, Ld. CIT(A) dismissed the appeal of the assessee on account of non-appearance with the following observations:

“5.1 During the appellate proceedings, the appellant was provided many opportunities as enumerated above. The appellant, for the reasons best known to him has remained non-compliant. No material facts have been brought on record to rebut the finding of the AO. There remains no doubt that statute has cast upon the appellant duty to explain the source of cash deposits for the assessment year under consideration but in the instant case appellant has failed to discharge the above onus, Assessee had made the submission during the assessment proceedings but as per order no satisfactory, documentary evidences were submitted to corroborate its claim that the source of cash was its agriculture income. Even during the appellate proceedings, Nikulbhai Patel vs. ITO Asst. Year – 2011-12 - 4– appellant failed to brought on record any documentary evidence to substantiate its claim. Hence I have no reason to interfere in the findings of the AO. 5.2 Considering the above factual matrix of the case, I am of the considered view despite being given ample opportunities during appellate proceedings, appellant failed to offer any satisfactory explanation about the nature and source of the cash deposit amounting to Rs.10,79,400/- in bank account. Accordingly, the addition of Rs.10,79,400/- is confirmed. Therefore these grounds of appeal are dismissed.”

6. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). Before us, the Counsel for the assessee submitted that the assessee had furnished substantial information to demonstrate sale of sugarcane to M/s. Narmadakhand Sugarcane Manufacturing Unit. The assessee was primarily engaged in sale of sugarcane to M/s. Narmadakhand Sugarcane Manufacturing Unit and in support of this, a letter had also been submitted from the said concern to the Assessing Officer to demonstrate that M/s. Narmadakhand Sugarcane Manufacturing Unit had in fact made payment to the assessee’s father towards sale of sugarcane. Further, the assessee had also furnished ledger account of M/s. Narmadakhand Sugarcane Manufacturing Unit for the records of the Tax Authorities. In addition, the assesee had also furnished 7/12 extracts to demonstrate that assessee is in possession of substantial land holdings on which sugarcane produce was being grown. However, in appellate proceedings, Ld. CIT(A) dismissed the appeal of the assessee, without considering the evidences placed on record and without discussing the various grounds of appeal raised by the assessee. The appeal of the assessee was dismissed only on account of non-appearance, without discussing the merits of the evidences placed on record by the assessee.

7. On going through the facts of the case, and looking into the nature of additions sustained in the hands of the assessee, in the interest of justice, the matter is hereby directed to be restored to the file of Ld. CIT(A) for de-novo consideration, after giving due opportunity of hearing to the assessee. However, we make it clear that in case there is any further non-compliance on the part of the assessee, in response to notices issued by Ld. CIT(A), then Ld. CIT(A) would be at liberty to pass appropriate orders, on the basis of material available on record, in accordance with law.