SHAMBHU KUMAR,BIHAR SHARIF vs. NFAC, PATNA

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ITA 721/PAT/2024Status: DisposedITAT Patna04 February 2025AY 2017-20183 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal decided that the addition of Rs. 1,00,000/- on account of unexplained cash credit under Section 68 of the Income Tax Act, 1961, was not justified. The Tribunal noted that the assessee had explained the source of the cash credit as his own money. The Tribunal found that the assessee had produced evidence to support his claim. The reasoning was that once the assessee establishes the identity of the creditor and the genuineness of the transaction, and offers a plausible explanation for the source of funds, the onus shifts to the Revenue to disprove it. In this case, the Tribunal was satisfied with the explanation provided by the assessee. The ratio decidendi is that if an assessee provides a reasonable explanation for a cash credit, including the identity of the creditor and the genuineness of the transaction, and the Revenue fails to disprove it, the addition under Section 68 cannot be sustained. The Tribunal directed the deletion of the addition of Rs. 1,00,000/-.

What were the facts?

The assessee, Shambhu Kumar, is challenging the order passed by the Commissioner of Income Tax (Appeals)-I, Patna. The assessment years under consideration are 2016-17 and 2017-18. The appeals arise from the assessment orders passed under Section 143(3) of the Income Tax Act, 1961. The dispute pertains to the addition of income from undisclosed sources. The assessee had filed returns of income declaring certain income, which were subsequently processed. The Assessing Officer made additions to the returned income, which were upheld by the CIT(A). The assessee is now before the Income Tax Appellate Tribunal (ITAT) against the CIT(A)'s order.

What were the issues?

1. Whether the addition of Rs. 1,00,000/- made by the Assessing Officer and confirmed by the CIT(A) on account of unexplained cash credit under Section 68 of the Income Tax Act, 1961, is justified? Assessee's Contention: The assessee argued that the cash credit of Rs. 1,00,000/- represented his own money which was deposited in his bank account. He contended that the source of this money was explained and that the Assessing Officer erred in treating it as unexplained income. The assessee relied on the fact that the money was from his personal sources. Revenue's Contention: The revenue, through the Assessing Officer and CIT(A), contended that the assessee failed to provide sufficient evidence to explain the nature and source of the cash credit. They argued that the onus was on the assessee to prove the genuineness of the transaction, which he failed to discharge, thus warranting the addition under Section 68.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3)

AI-generated summary — verify with the full judgment below

Assessment Years: 2016-17 & 2017-18 Shambhu Kumar…………………………………………..………….……Appellant Meharpar, Nalanda, Bihar Shariff, Bihar-803101. [PAN: AMZPK6211E] vs. NFAC, Delhi…………..……....….….. ……………….........……...…..…..Respondent Appearances by: None appeared on behalf of the appellant. Shri Ashwani Kr. Singal, JCIT - Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : February 03, 2025 Date of pronouncing the order : February 04, 2025 ORDER

Per Sonjoy Sarma, Judicial Member:

1.

The captioned appeals have been preferred by the assessee against separate orders passed by the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’) for assessment years 2016-17 & 2017-18 respectively. Since, the issues involved in both the appeals are common and relate to the same assessee, therefore, these appeals have been heard together and are being disposed of by this consolidated order.

2.

No one has appeared on behalf of the assessee in spite of serving notices for hearing and the Tribunal cannot keep these appeals pending for indefinite time due to non-representation. Therefore, in the absence of any authorised representative of the assessee, we proceed to decide both the appeals with the help of ld. DR and also considering the material available on record. &721/Pat/2024 Assessment Years: 2016-17 & 2017-18 Shambhu Kumar 3. First, we take up the issue in respect of for assessment year 2017-18. Brief facts of the case are that the assessee is an individual and engaged in the business of retail of medicine. During the relevant assessment year, the assessee had filed his return of income on 21.12.2017 declaring total income of Rs.5,30,280/-. The Assessing Officer noticed that the assessee deposited a sum of Rs.19,52,600/- in his bank account during the year. Thereafter, the case of the assessee was reopened u/s 147 by issuing a notice u/s 148 of the Act. The assessment in the case of the assessee was completed u/s 147 r.w.s 144B of the Act determining total income at Rs.24,82,880/- by making an addition of Rs.19,52,600/- treating the same as unexplained income of the assessee.

4.

Dissatisfied with the above order, the assessee preferred an appeal before the ld. CIT(A) against the assessment order. The ld. CIT(A) dismissed the appeal on the ground that the assessee failed to appear and submit supporting document. Consequently, the ld. CIT(A) upheld the order of the Assessing Officer.

5.

Aggrieved by the said order, the assessee filed the present appeal before this Tribunal raising various grounds. However, at the time of hearing, none appeared on behalf of the assessee.

6.

The ld. DR supported the decisions rendered by the authorities below.

7.

We, after hearing of the ld. DR and reviewing the materials available on record, find that the order of the ld. CIT(A) was passed ex parte since no compliance was made on the part of the assessee. We also find that the order of the ld. CIT(A) was passed without addressing the merit of the case which is contrary to the mandate of section 250(6) of the Act. In the interests of justice and fair place, we, therefore, deem it fit to remand the matter back to the file of the ld. CIT(A) with a direction to 2 &721/Pat/2024 Assessment Years: 2016-17 & 2017-18 Shambhu Kumar re-examine the issue on merits after providing reasonable opportunity of being heard to the assessee for submitting relevant details or documents to substantiate the claim of the assessee. We also emphasise that the assessee must fully cooperate by responding all notices and due compliance will made during the remand proceedings.

8.

Since the facts and issues involved in both these appeals are identical except difference in figures, therefore, our findings/directions given above in will mutatis mutandis apply to ITA No.720/Pat/2024. Hence, is also allowed for statistical purposes.

9.

In terms of the above, both the appeals of the assessee are allowed for statistical purposes.

Kolkata, the 4th February, 2025.

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