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Facts
The assessee did not file original Income Tax Return (ITR) for AY 2013-14. Proceedings under section 147 were initiated, and notices were issued. The assessee provided bank statements showing cash deposits of Rs. 83,00,714/-. The Assessing Officer (AO) made an addition under section 69A of the Income Tax Act, which was confirmed by the CIT(A).
Held
The Tribunal observed that the assessing officer and CIT(A) adopted a one-sided approach by not considering the cash withdrawals from the bank account alongside the deposits. The Tribunal noted that the AO was obligated to demonstrate that the assessee had made investments or incurred expenses from such income, which was not done. The Tribunal found that the case was neither properly adjudicated by the AO nor properly decided by the CIT(A).
Key Issues
Whether the addition of cash deposits of Rs. 83,00,714/- made by the Assessing Officer under section 69A of the Income Tax Act, without considering simultaneous cash withdrawals, is justified.
Sections Cited
147, 144B, 139, 148, 142(1), 69A, 60A
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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
आदेश/ O R D E R
PER DINESH MOHAN SINHA, JM:
Captioned appeal filed by assessee pertaining to Assessment Year 2013- 14, is directed against order passed by Commissioner Of Income Tax (Appeal), vide order dated 24/11/2023, which in turn arises out of an order passed by the Assessing Officer dated 22/03/2022 u/s 147 r.w.s. 144 read with section 144Bof the Income Tax Act, 1961.
2. The Grounds of Appeals raised by the assessee are follows
1) The learned assessing officer is totally unjustified in assessing the income of the assessee an income of Rs 3.0074 which represents the cash deposits in saving bank account of the assessee and his wife Bhawana Soni. The Ld. AO has applied Section 60A and the appellant objected application u/s. 694 and Ld. CIT Appeal has not given any of his comments and silent on the grounds of appeal no. I raised before the CIT Appeal. The action of the Ld. AO and CIT Appeal is totally illegal incorrect and bad in law. 2) The Lat 40 has not considered the business assessee and his wife Bhawana Soni even though they are holding joint bank account and carrying on the business independently The out of the total turnover of Rs 83,00 714 turnover belong Mrs. Bhawana Soni was Rs. 31.32.416, the entire receipts is taxed in the hands of the assessee and business of the wife is rejected for lack of evidence. The CIT Appeal has also confirm the same in para 52 of his order which is illegal and incorrect and against the natural justice and against judicial pronouncement 3) The Ld. CIT appeal has not considered the grounds of appeal to tax the peak bank balance as there are frequent deposits and withdrawals in the bank account The Ld. CIT Appeal is silent on this ground of appeal raised by the appellant and hence the action of Ld. CIT Appeal is illegal and bad in law and against judicial pronouncement 4) The Ld. CIT Appeal has not considered the alternate submission of the assessee to taxed the entire deposits of Rs. 83,00,714/-@ 5% estimated income. The Ld CIT Appeal is silent on these grounds of appeal and hence the action of Ld. CIT Appeal is illegal and bad in law and against judicial pronouncement 5) Any other ground of appeal at the time of hearing with prior approval of the Hon'ble Bench.
Brief facts of the case that the assessee had not filed original ITR for AY: 2013-14u/s 139 of the IT Act. Proceedings under section 147 were initiated and notice u/s 148 of Income tax Act, 1961 dated 23.03.2021 was issued and served upon the assessee through registered e-mail id with prior approval from the higher authority. The assessee had not filed ITR in response to the above cited notice. Thereafter notices u/s 142(1) dated 16.06.2021, 11.11.2021, 23.01.2022, 28.01.2022 of the Act were issued along with questionnaires and served upon the assessee through the registered email to explain the source and genuineness of the above transaction. In response to the above cited notices, the assessee has filed replies dated 31.01.2022 & 01.02.2022. On perusal of the said replies it is seen that the assessee had furnished computation of income, balance sheet. profit & loss account and Bank statements for the year under consideration ie, AY:2013-14. Further the break-up of the cash deposited by the assessee (as per bank statement furnished) is given hereunder - S. Bank Account no Cash deposits: Total Credits PAN in account NO during FY during FY : 2012-13 2012-13
1. Bank of India, 312110110002761 Rs. 47,35,255/- Rs. 1,64,298/- ACAP59532M Bhaktinagar, Rajkot
Axis Bank, 087010100332989 Rs. 31,35,300/- Rs.31,36,416 ACAP59532M Mavdi, Rajkot Total Rs.78,70,555/- Rs.83,00,714/- That the assessee has not file ITR in response to notice u/s 148 of the Act. Since the assessee had neither e-filed return nor furnished any explanation regarding the source of cash deposits. The assessee has not filed ITR for the AY:2013-14 and for previous years. The assessment was completed under section 147 r.w.s. 144B of the IT Act vide order dated:22/03/2022.
Returned Income Not defined as the assessee has not filed ITR Addition made u/s 69 A of the IT Act. Rs.83,00,714/- Assessed Income u/s 147 r.w.s 144B of the Act Rs.83,00,714/-
The assessee filed an appeal against the order of assessment before the CIT(A). The Ed. CIT by order dated 24/11/2023 has dismissed the appeal of the assessee with the following observation:
“I have carefully considered the facts of the cave as well as submissions filed by the appellant. I find no force in the arguments of the Appellant The Assessee has merely stated that the deposits ire the bank account belong to his wife but has furnished no evidence to substantiate this claim. He has furnished no proper verifiable source even in hands of his wife whereby the cash deposits could be explained in her hands Accordingly the addition of Rs.83.00.714 made by the 40 on account of unexplained cash credits u/s 694 of the Act is hereby confirmed. Thus the ground of appeal
No. 1 is dismissed
5. The assessee is an appeal against the impugned order of the L.d. CIT dated: 24/11/2023 before us.
During the course of hearing, the Ld. AR of the assessee submitted that the assessee has deposited cash of Rs. 83,00,714/- in the Bank. That the amount deposit after business receipt of the assessee and the cash withdrawal from the Bank ITR could not file Income-tax return because of corona pandemic later on window of website of the department was closed. The assessee relied on several judgements.
On the contrary, the Ld. Sr. DR has vehemently supported the order of lower authorities.
We have heard both the parties and perused all the material available on records. We note that no return has been filed and response to notice u/s. 148 of the Act. During the course of hearing assessee has submitted computation of income profit and loss account and Balance sheet and Bank statements for A.Y. 2013-14 and the same was no considered. That the assessee claimed the Axis Bank is maintained jointly with wife Smt. Bhavnaben D. Soni where is the cash deposit made out of the sale from Grain Business neither the AO nor the Ld. 4 CIT(A) as considered the submission made by the assessee. That, in the order of assessment the assessee could not explain the nature of business activities, Notices issued along with show cause notice dated 13/03/2022 remain uncomplied with The Ld.CIT(A) in impugned order also confirmed that the assessee has not furnished any document regarding source of the case deposit in wife's name.
We further note that one sided approach adopted by the assessing officer and Id. CIT(A) is not justified and not valid in the eye of law. The assessee case was reopened with a reason to verify the alleged cash deposit of Rs. 83,00,714/- However the orders do not talk about the cash withdrawals of Rs.82,45,974/-Rs. 51,14,114/+31,31,860/- from current Bank account. It is also to be noted that cash withdrawal these Bank account and deposits in Bank for the purpose to run the business activities. We find that assessing officer made addition in respect of cash deposit of Rs. 83,00,714/-, in the current bank account, however, the assessing officer is silent about cash withdrawal, which is not acceptable. These facts clearly show and establish the overall approach of the assessing officer, to make high pitched assessment. The Assessing Officer has not considered both the sides of the Bank statement of the assessee and allegedly passed the order by making addition of income u/s 69A of the Act. Before Id. CIT(A), the assessee submitted that addition u/s. 69A of the Act. is bad. The deposit with the Axis Bank belong to wife who is in Grain Business and AO did not care about withdrawal from the Bank.
We observed that there was huge deposit of cash in the Bank account of the assessee but on perusal of the bank statement, it is revealed that there were simultaneously withdrawals from the Bank account leaving the negligible balance in the Bank account of the assessee. Now 1st of all we have to see whether such deposit and withdrawal from the Bank is representing the trading activities of the assessee. We further observed that the Revenue has not brought anything on record suggesting that the assessee had so much of the income as computed by the assessing officer. The assessing officer was under the obligation to bring on record to demonstrate that the assessee has made some investment or incurred some expenses out of such income but there is no such information available with the Revenue. Providing sufficient details but that does not lead to reach the conclusion that the amount deposited in the Bank represents the undisclosed income of the assessee.
As such, the deposits in the Bank. Cannot be treated as income without considering withdrawal considering the peculiar circumstance of the case. We are of the view that the case neither properly adjudicated by the Ld. AO nor properly decided by the CIT(A) we are of the view that case need to be adjudicated on merit. We nearby remand back the case to the file of Ld.AO/JAO with direction for verification of:-
1. Business income declared of Rs. 1,93,250/- by the assessee.
2. Nature of business activities and source of income.
3. To investigate separate business of wife smt Bhavnaben Soni. 4. Considered the withdrawal from the Bank during the year.
We remit back to the file of the Assessing officer for fresh adjudication the case on merit after giving due opportunity to the assessee to explain the case. Further the Assessee directed to file the return of income and produce Books of A/C and supported document to establish the taxable income before AO/JAO.
In result the appeal of the assessee is allowed for statistical purpose.
Order is pronounced in the open court on 02/06/2025.