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Facts
The assessee's appeal is against the assessment order of the CIT(A) for AY 2023-24, who confirmed additions made under sections 69C and 68. The assessee claims the CIT(A) did not provide adequate notice and passed an ex-parte order. The additions pertain to unexplained credit card payments and cash deposits.
Held
The Tribunal noted that the assessment was completed under section 144 due to non-compliance by the assessee. Although the assessee made some submissions before the CIT(A), additional evidence was not admitted. The Tribunal found that the assessee failed to substantiate grounds of appeal. However, considering the ex-parte assessment order and the non-admission of evidence by CIT(A), the matter was restored.
Key Issues
Whether the additions made by the Assessing Officer and confirmed by the CIT(A) on account of unexplained credit card expenses and cash deposits are justified? Whether the CIT(A) erred in passing an ex-parte order without considering the assessee's submissions and evidence?
Sections Cited
69C, 68, 144, 115BBE
AI-generated summary — verify with the full judgment below
PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the assessment order of ld.
CIT(A)/NFACT, Delhi dated 18.09.2025 for Assessment Year (A.Y.) 2023- 24.The assessee has raised the following grounds of appeal:
“1. Learned Commissioner of Appeal not send single notice by mail. Applicant unknown about date of notices.
Applicant received remand report notice on 18/09/2025, Applicant send adjournment for 1 to 2 days copy of acknowledgement enclosed Annexure “A”. Learned Commissioner not considered adjournment and passed “X” Party Order on same date 18/09/2025.
Learned Commissioner not follow adjournment request and passed “X” Party Order and disallowed and confirmed original learned assessment officer’s order. Learned Commissioner (Appeal)’s Order without consideration of Facts, Ground and Written Submission.
Learned Commissioner (Appeal) disallowed for following issues, Learned Appeal Commissioner without served notices passed “X” Party Order and made addition on 2 issues as under, (A.Y. 2023-24) Vinod Chandru Shahani Proprietor of Magco Cranes
A. Addition under section 69C as per para 3.6.2 Rs. 19,71,181/-. B. Addition under section 68 as per para 3.6.3 Rs. 13,18,000/-.
Applicant Pray Honourable Court, Kindly consider explanation and document evidence enclosed herewith.
Addition under section 69C Rs. 19,71,181/- and Unexplained expenditure i.e payment of credit card: Learned Commissioner (Appeal) made addition on Credit card payment expenditure and sources not explained. Therefore, applied section 69C and made addition Rs. 19,71,181/- as following credit cards.
Sr. No. Banks Amount 1. Yes Bank Credit Card 2,21,000/- 2. HDFC Credit Card 10,32,800/- 3. Axis Bank Credit Card 7,17,381/- Total 19,17,181/-
Learned Commissioner (Appeal) mention in Order Sources of Payment of Credit Cards. Assessee spend Rs. 1,33,186.48/- Petrol and Diesel out of the card payment of Rs. 19,71,181/- Balance Amount Rs. 18,37,994.52/- for personal withdrawals and personal expenses not debited to profit and loss account only debited to Rs. 1,33,186.48/- as petrol and diesel expenses. If personal withdrawals not debited to profit and loss account no effect income and not reduced net profit and no business expenses Rs. 18,37,994.52/-. Enclosed herewith Capital Account. (Annexure “B” Enclosed)
Applicant pray that such expenses not applicable section 69C of income tax Act 1961. Learned Commissioner (Appeal) further mention in “X” Party Order that what are sources of card payment.
Applicant having sufficient fund amount received against sale, payment to credit cards by cross cheque. Applicant practice sale on cash for new clients. Learned Commissioner (Appeal) mention that cash paid for payment credit cards. Sir, Credit card banker not accepting cash. Therefore, no question arrival for payment made by cash.
Enclosing herewith capital account and having profit during the years Rs. 12,58,789.55/- Plus Depreciation Rs. 4,85,672/- Total Fund from profit Rs. 17,44,461.55/- during the financial year assessee taken loan from friends and family by cross cheque enclosed herewith ledger copy. These are sufficient fund with applicant during the year. Enclosed Ledger Copies. (Annexure “C” Enclosed)
Details of Loan Taken : i. AmritlalDevichand Jain Rs. 20,00,000/-. ii. Advance from Jailaxmi Enterprises Rs. 15,00,000/-. iii. Sunil Chandulal Shah Rs. 22,00,000/-.
Therefore, Learned Commissioner (Appeal) treated the entire expenditure treated undisclosed income from unknown sources. Being unexplained (A.Y. 2023-24) Vinod Chandru Shahani Proprietor of Magco Cranes expenditure u/s 69C of the IT Act 1961 and to be Taxed as per provision of section 115BBE of the IT Act 1961.
Sir, Applicant request as above received loan by cross cheque or DD Rs. 57,00,000/-. As per enclosed ledgers and having profit Rs. 17,44,461.55/- during the year applicant has sufficient fund to made credit card payment and total credit card payment out of that personal withdrawals Rs. 18,37,994.52/- not expenses debited to profit and loss account.
Therefore, Applicant pray to delete the addition made by Learned Commissioner (Appeal) unjustified without considered Trading Profit and Balance Sheet with ITR submitted.
Addition U/s 68 Rs. 13,18,000/-:
Unexplained cash deposit Rs. 13,18,000/- in saving account number 20005544221:
As per bank statement against some sale fund and commission received in cash both accounted in profit and loss account. Applicant practise to sale to new client on cash basis. Therefore, source of cash deposit cleared from sale and commission received in cash. That means it is cleared that cash deposit to bank from sale and commissionreceived. Therefore, under section 68 not applied. Enclosed Ledger account of Bank of Maharashtra account number (221). (Annexure “D” Enclosed)
Applicant submitting herewith supporting documents for sources of fund and nonbusiness expenses.
As above Facts and Grounds, Appellant prays to be allowed addition made by Learned Commissioner u/s 68, 69C Rs. 32,89,181/-.
Appeal Order unjustified without considered income tax return filed along with profit and loss account and balance sheet, Written Submission Supporting documents.
Income addition by Learned Commissioner (Appeal) under section 69C or Section 69D under section 69A Section 69B and Section 68 not applicable to applicant.
Applicant pray to honourable court for any addition delete, omission and alteration any ground or grounds of appeal at the time of final hearing or before that.”
None appeared on behalf of the assessee, despite the service of notice. On 22.01.2026, adjournment was sought by tax consultant from E.L. Kokane & Co. Today, neither the assessee nor his representative appeared, nor filed any application for adjournment. Therefore, I have no other option except to (A.Y. 2023-24) Vinod Chandru Shahani Proprietor of Magco Cranes proceed to decide the appeal on the basis of material available on record and hearing the submission of learned Senior Departmental Representative (ld. Sr.
DR) for the Revenue.
The ld. Sr. DR for the Revenue submits that assessment was completed under section 144 on 26.12.2024. The assessing officer issued various show cause notices as recorded in para 2 of assessment order. The assessee not responded to any of such notice. The assessing officer while passing the assessment order made addition unexplained expenditure on account of payment of credit card aggregating of Rs. 19,71,181/-. The assessing officer also made addition on account of unexplained cash deposit in savings bank account with Bank of Maharashtra of Rs. 13,18,000/-. Again, before ld.
CIT(A), the assessee failed to substantiate various grounds of appeal. Thus, the assessee is habitual in not making submission. Before ld. CIT(A), the assessee failed to substantiate various grounds of appeal.
4. I have considered the submissions of ld. Sr. DR for the Revenue and have gone through the orders of lower authorities carefully. I find that during assessment, the assessee has not made any compliance resultantly, the assessment was completed under section 144. However, before ld. CIT(A), the assessee made certain compliance and filed various evidence in the form of loan account and other details to substantiate the cash deposit and payment against credit card. The evidence furnished by assessee was not admitted by ld. CIT(A) and thereby confirmed the addition made by ld. AO.
Before me, the assessee failed to substantiate various grounds of appeal.
However, keeping in view, the fact that assessee was completed under (A.Y. 2023-24) Vinod Chandru Shahani Proprietor of Magco Cranes section 144 and the ld. CIT(A) was not admitted additional evidence, therefore, I deem it appropriate to restore the matter back to the file of jurisdictional assessing officer to pass the assessment order afresh. Needless to direct that before passing the order, the assessing officer shall allow reasonable opportunity to the assessee. The assessee is directed to be more vigilant and to furnish all details and written submission in support of his claim. In the result, the grounds of appeal allowed for statistical purpose.
In the result, the appeal of assessee is allowed.
Order pronounced in the open Court on 29/01/2026. - Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated: 29/01/2026 Biswajit