KANAIYALAL HEMENDRA VYAS,DHORAJI vs. INCOME TAX OFFICE, WARD - 2(2)(1), RAJKOT, AAYAKAR BHAVAN

That the case was reopened and notice was issued under section 147 on 27.03.2017. in response to the notice, the assessee submitted written submissions alongwith other documents, such as, Bank Account, Audit Report purchase and sales book. Since nature of business of the assessee is such that most of the transactions took place in cash during the relevant period. (A.Y.2010-11).

In sum appeal is dismissed.”

That the assessee filed the appeals against the impugned orders dated 29.06.2023 before the Tribunal.

During the course of hearing, the Ld. AR of the assessee submitted that the reopening of assessment is bad in law, the assessee is a trader of agricultural products, and maintained Books of account and Books are audited by CA, and Bank Account, sales/purchase bill etc., were submitted during the assessment proceedings. That the assessee shown products amounted of Rs. 83,72,533/- in the Return of Income.

On the contrary, the Ld. Sr. DR for the revenue relied on the order of the Ld.CIT(A) and also stated that the bank account are different placed so there are not relatable between the business. The assessee has claimed the assessee is commission agent in the statement given to the department in a proceedings u/s. 131 of the Act.

We have heard both the parties and perused the documents available on record. We note that the assessing officer, the assessee claimed to have been a trader and agricultural commodities such as onion, wheat and garlic, and the amount of cash generated in the course of business. We note that the assessee maintained following books of account are audited. That the Page 4 of 6 & 307/Rjt/2023 Kanaiyalal Hemendra Vyas assessee has produced sale book, purchase details but name of the party to whom goods is sold or purchased is incomplete, there are no complete address, only name of the city/town are mentioned, the AO made entire cash deposited as an addition in income as unexplained source of money u/s. 69B of the Act. We note that the statement recorded by the department u/s. 131, where assessee admitted to be a commission agent therefore, the assessee is a trader or commission agent, that is, nature of activities has not been ascertained by agricultural activities. The assessee also claimed that the assessee is selling the goods it means he is trader. The assessee filed written submission stating that the cash gross receipts deposited in bank, can by no stretch of imagination be treated as income of the assessee. The cash deposited out of wholesale Trading in Agricultural products business and as such the deduction on account of goods purchase, direct and indirect expenditure must be allowed to the assessee or not certain because no documents related to above expenditure are available before Bench. The aspect whether the assessee is a trader or commission agent has not been examined by the AO and the AO also no examined the complete books of account of the assessee, we find that reopening of assessment was according to law, hence, assessee is not entitled to get relief on this technical ground. We are of the view that the assessee deserves for an opportunity to explain the case before the lower authorities. We direct the assessee to submit all the documents along with details of transaction, wherein name, address and quantity were duly specified. The assessee is also directed to submit complete name and address of its customers. In the above facts and circumstances of the case, and in the interest of justice, we set aside the order of Ld. CIT(A) and remit the matter back to the file of Ld. AO for fresh adjudication on merit.

In the result, these two appeals of the assessee (In ITA 306& 307/Rjt/2023 for AY 2010-11 and 2011-12) are allowed, for statistical purposes, in above terms.