INCOME TAX OFFICER, SURAT vs. LALIT VANARSIBHAI PATEL, SURAT

4. On the basis of the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer.

5. It is therefore prayed that the order of Ld. CIT(A) may kindly be set aside that of the Assessing Officer be restored.

either before or during the course of hearing of the appeal.”

3. The facts of the case are that the assessee filed his return of income on 06.09.2017 for AY.2017-18, declaring total income of Rs.10,43,560/-. The assessee is a retail dealer of TVS two-wheeler vehicles and had derived income from the said business during the year under consideration. The case was selected for complete scrutiny under CASS. Various notices were served upon the assessee. The Assessing Officer (in short, ‘AO’) also issued a show cause notice dated 17.12.2019 and asked assessee as to why additions of cash deposit of Rs.1,69,10,000/- during demonetization period and repayment of loan of Rs.1,03,11,221/- should not be made to the total income for the subject year. The assessee filed reply dated 20.12.2019, which has not been discussed in the assessment order. The AO has, however, concluded that assessee failed to submit details of cash sales including purchase register, ledger of purchases etc. Therefore, source of cash deposit is not explained and /AY.2017-18 Lalit Vanarsibhai Patel hence, he added Rs.1,69,10,000/- u/s 69A of the Act. As regards the addition of Rs.1,03,11,221/- towards repayment of unsecured loan to various parties, the assessee had submitted that the source was out of credits received against sales. However, the AO added repayment of unsecured loans of Rs.1,03,11,221/- to various parties by observing that source of the repayment has not been explained with documentary evidence. In the result, both the above additions were made and total income was determined at Rs.2,82,64,781/- as against returned income of Rs.10,43,560/-.

4. Aggrieved by the order of AO, the assessee filed appeal before CIT(A). The assessee filed written submission and various details before the CIT(A). After considering the facts of the case, the CIT(A) observed that the AO made addition of Rs.1,69,10,000/- as unexplained money u/s 69A and Rs.1,03,11,221/- u/s 68 of the Act by stating that the assessee had failed to submit certain details as brought out in the assessment order. The appellant submitted all the documents/evidence before CIT(A), which were submitted before the AO. The CIT(A) found that the appellant had replied to all the notices issued by AO and had enclosed necessary documents including purchase register/ledger of purchases. Regarding the addition made on account of cash deposits made during the demonetisation, the appellant submitted purchase register/ledger of purchases from sale of two wheelers purchased from TVS Motors Ltd., which was sold to customers. Regarding the addition made on account of repayment of unsecured loan, the CIT(A) found /AY.2017-18 Lalit Vanarsibhai Patel that the appellant had made his submission and filed various details in support of the factum of loan repayment. The audit report filed u/s 44AB of the Act shows all the repayment were made through proper banking channels. The appellant submitted copies of contra-confirmation of parties, ITRs, bank statements and PAN details. Further, the CIT(A) observed that the appellant's explanation for the source of cash deposit being out of cash sale of two wheelers cannot be denied and the explanation of repayment of loan submitted before AO are acceptable. The CIT(A) concluded that the findings of the AO is incorrect, and the additions were made by AO on assumption basis. The AO has not gone through the submissions and details made by the AO during assessment proceedings. Therefore, the CIT(A) directed AO to delete the addition made of Rs.1,69,10,000/- on account of cash deposits and Rs.1,03,11,221/- on account of repayment of loan. Hence, the CIT(A) has allowed the appeal of the appellant.

5. Aggrieved by the order of the CIT(A), the revenue filed appeal before the Tribunal. The learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of the AO. He submitted that details of the purchasers have not been given by the appellant to the AO. The assessee has not discharged the onus cast upon him. He requested to sustain the addition made by the AO, which were wrongly deleted by the CIT(A).

6. On the other hand, the learned Authorized Representative (ld. AR) of the assessee has filed paper book including the submissions made before the /AY.2017-18 Lalit Vanarsibhai Patel AO and the CIT(A). He submitted that all the details were filed before the AO, who has completely ignored the submissions and simply added the impugned amounts of Rs.1,69,10,000/- and Rs.1,03,11,221/-, being cash deposit in various bank accounts and repayment of unsecured loans respectively. He submitted that the appellant had mentioned all details in the statement of facts before the CIT(A). No further query was raised after reply of the assessee along with various details. The assessee has properly maintained the books of account, which have been duly audited u/s 44AB of the Act. All cash deposits were out of the sale of two whellers made during the year, which is duly recorded in the books of account. The repayment of loan was also through proper banking channel and assessee had enclosed copies of confirmation of account from the parties, their ITRs, PANs and bank statements. In view of the detailed submission along with supporting evidences, the CIT(A) has rightly deleted the addition. He, therefore, requested that the order of CIT(A) may be upheld.