SHRI SURESH KUMAR SINGH,HOWRAH vs. I.T.O.WARD-48(3), KOLKATA

At the outset, it is noted that there is a delay of 20 days on the part of the assessee filing this appeal before the Tribunal. In this regard, an application seeking condonation of the said delay filed by the assessee and keeping in view the reasons given therein which are duly supported by an affidavit filed by the assessee affirming the relevant fact on oath, I am satisfied that there was a sufficient cause for the delay of 20 days on the part of the assessee in filing this appeal before the Tribunal. Even the learned DR has not raised any objection

Assessment Year: 2011-12 Shri Suresh Kumar Singhi in this regard. I, therefore, condone the said delay and proceed to dispose of the appeal of the assessee on merit.

The assessee in the present case is an individual who is engaged in the business of trading of domestic goods. The return of income for the year under consideration was filed by him on 14.07.2015 declaring a total income of Rs. 1,59,040/-. Although the said return was initially accepted by the AO u/s 143(1) of the Act, the assessment was subsequently reopened by him and the notice u/s 148 was issued to the assessee after recording the reasons. In reply, a letter was filed by the assessee requesting that the return originally filed by him may be treated as the return filed in response to the notice u/s 148. During the course of assessment proceedings, the assessee was called upon by the AO to produce the relevant documents in respect of advance paid for the purchase of immovable property. The documents required by the AO were produced by the assessee and even the documents showing cancellation of the transactions were also produced by the assessee. On verification of the said documents, the AO found that a payment of Rs. 5,15,000/- was made by the assessee towards advance for purchase of property in cash during the year under consideration. Although the source of the said cash was explained by the assessee as accumulated savings over the years, the Assessing Officer did not accept the same in the absence of any cogent supporting evidence. He accordingly treated the amount of Rs. 5,15,000/- as unexplained income of the assessee and added the same its total income in the assessment completed u/s 147/143(3) of the Act vide an order dated 29.02.2016.

Against the order passed by the AO u/s 147/143(3) of the Act, an appeal was preferred by the assessee before the Ld. CIT(A) and since the submission made by the assessee in support of his case was not found acceptable by him, the Ld. CIT(A) confirmed the addition of Rs. 5,15,000/- made by the AO for the following reasons given in paragraph no. 5.3 of his impugned order: “It is proved from the fact of advanced sum of Rs. 5,15,000/- for purchase of immovable property, that the appellant has during that year for the first time shown investment. The onus therefore squarely rests on the appellant to prove the source of this investment which the appellant has not satisfactorily discharged. The mere assertion that the amount of investment was from past savings has to be corroborated with necessary evidences. In the absence of any details like yearly savings in the past years, where it was kept or invested all the while, the details of loans taken if any, the details of the withdrawals for household expenses, the details of a bank account balances etc., the appellant has not been able to offer any satisfactory explanation with respect to the source of the investment. In view of the above, the undersigned is not inclined to interfere with the order of the AO and the addition made by the AO of Rs. 5,15,000/- is confirmed. Appellant’s ground fails.”

I have heard the arguments of both the sides and also perused the relevant material available on record. The learned counsel for the assessee has submitted that the assessee is carrying on a small business of selling sarees on retail basis by going house to house. He has submitted that the past savings from his business income were accumulated and the same were kept in cash due to illness of his mother. He has submitted that this accumulated cash was paid by the Assessment Year: 2011-12 Shri Suresh Kumar Singhi assessee as advance for the purchase of property and after cancellation of the said transaction, it was invested by him in shares. He has submitted that the assessee is regularly assessed to tax and balance sheets and profit and loss account were regularly prepared by him on the basis of which the returns of income were regularly filed. He has invited our attention to the copies of the balance sheets of the assessee right from 31st March, 2005 placed in his Paper Book to point out that sufficient cash balance was available with the assessee to explain the advance of Rs. 5,15,000/- in question given against purchase of property. He has submitted that the case of the assessee was not property represented either before the AO or before the Ld. CIT(A) on the basis of said documentary evidence and urged that one opportunity may be given to the assessee to establish the availability of cash for making the payment of advance in question by sending the matter back to the AO. Although the learned DR has raised a strong objection for sending the matter back to the AO by submitting that the assessee has failed to avail the opportunity already given to him by the AO as well as by the Ld. CIT(A), I consider it fair and proper and in the interest of justice to give one more opportunity to the assessee to establish the availability of cash for making the payment of advance in question. I accordingly set aside the impugned order of the Ld. CIT(A) on this issue and restore the matter to the file of the AO for deciding the same afresh after giving the assessee one more opportunity of establishing the availability of cash for making the payment in question in cash.

In the result, the appeal of the assessee is treated as allowed for statistical purpose. Order Pronounced in the Open Court on 15th November, 2019.