VINOD CHANDRU SHAHANI PROPRIETOR OF MAGCO CRANES,MUMBAI vs. ASSESSING OFFICER, INCOME TAX DEPARTMENT, MUMBAI

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.

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.”

DR) for the Revenue.

3. 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.