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Income Tax Appellate Tribunal, JABALPUR BENCH, JABALPUR
Before: SH. KUL BHARAT & SH. NIKHIL CHOUDHARY
अपीलाथ" क" ओर से / Appellant by : Shri. Abhijeet Shrivastava, Adv ""यथ" क" ओर से/Respondent by : Sh. Bharat Sheogankar, Sr. DR सुनवाई क" तार"ख / : 07/01/2025 Date of Hearing घोषणा क" तार"ख / : 08/01/2025 Date of Pronouncement आदेश / O R D E R
PER NIKHIL CHOUDHARY, ACCOUNTANT MEMBER:
This is an appeal against the order of the ld. CIT(A), NFAC, under section 250 of the Act, 1961 dated 15.09.2023. The grounds of appeal
are as under:- “Ground No.1 of appeal
1. That addition of Rs.6499283/- on account of unexplained money u/s 69A in unjustifiable. Ground of Appeal No. 2 That assessment order passed by the learned assessing officer u/s 144 is totally unjustified.
2 Krishan Pratap Singh Ground of Appeal No. 3 That Appellant further crave leave to adduce more material and/or amend, modify any of the grounds of Appeal if required necessary to do so.”
The facts of the case are that the ld. AO observed that during the period of demonetization, from 9.11.2016 to 30.12.2016, the assessee had made cash deposit of Rs.19,45,250/- in his bank account at SBI, Nawgaon Jatara Road, Palera. Despite this, the assessee had not filed a return. Therefore, he was issued with a notice under section 142(1) on 23.1.2018 to file return of income for the said assessment year. However, the assessee failed to comply with the same. The ld. AO thereafter gathered information from the bank regarding the said bank account and found out that in the A.Y. 2017-18, the assessee had deposited a total amount of Rs.64,99,283/- , into the said account by various modes and subsequently transferred the money. He concluded that the nature of transaction did not reflect any business activity in respect of the said account. In view of the repeated non-compliance of the assessee, he issued a show cause notice asking him why the amount should not be added back under an order passed under section 144, as unexplained money under section 69A r.w.s. 115BBE of the Income Tax Act, 1961. In the absence of any reply from the assessee, the said addition was made and penalty proceedings under section 271AAC were initiated. The assessee filed an appeal before the ld. CIT(A) in which it was submitted that he was engaged in the business of trading of liquor and that cash that was deposited in the said bank account was from sales. However, due to bad health, he could not get his audit done on time and therefore, he could not file the return as per the notices issued during assessment therefore, the ld. AO had determined entire transactions in the bank account amounting to Rs.64,99,283/- as income of the assessee. The assessee submitted that he had filed his returns in a previous assessment years but the ld. AO had not taken this into cognizance and since the entire amount was on account of sales from business, the entire amount could not be added back to his income. Rather only the profit element could be added back. He quoted various case laws in favour of this contention. He further stated that the ld.
3 Krishan Pratap Singh AO had erred in recording only the credits to the bank account and not giving credit for the debits and thus the judgment was bad in law. The ld. CIT(A) examined these submissions of the assessee but he observed that no cash book of daily sales had been produced; the books of accounts had not been regular written and were not audited as per the admission of the assessee. Furthermore, the assessee had not filed a return of income. In such a situation, the cash deposited in the bank account could not be examined viz. a viz., the claimed sales. He also observed that in comparison to the sales for assessment years 2013-14, 2014-15 and 2015-16 when business contract for liquor had last been awarded to the assessee, there was a substantial and sudden jump in cash deposit in the bank from November, 2016. Furthermore, turnover and cash balances for the immediately preceding and following years were not of the same order as during the three month period of demonetization. From the same, the ld. CIT(A) concluded that the source was merely an afterthought to explain the cash deposits and the source was unsubstantiated in the absence of regular books of account and audit report for A.Y. 2017-18. He, therefore, dismissed the appeal of the assessee.
The assessee is aggrieved at this dismissal of his appeal and has accordingly come in appeal before us. Shri. Abhijeet Shrivastava, Advocate (hereinafter referred to as the ‘ld. AR’) submitted that due to bad health, the assessee had been prevented from making proper compliance before the ld. AO but he had made full compliance before the ld. CIT(A) and even uploaded the cash book before the ld. CIT(A) , which had not been considered by him while passing his order. The ld. AR submitted that the assessee was in a position to demonstrate that the amounts credited to his bank account during the said financial year represented the sales made by him from the liquor business and the deposits were not unexplained. He prayed for another chance being able to explain the same before the ld. AO.
On the other hand, Sh. Bharat Sheogankar, ld. Senior Departmental Representative (hereinafter referred to as the ‘ld. Sr. DR’) submitted that the 4 Krishan Pratap Singh directions should be given to the assessee to make proper compliance before the ld. AO failing which it shall be presumed that he was not able to explain the said deposits and the additions were fit to be confirmed.
We have duly considered the facts and circumstances of the case. While it is in fact that the assessee has not made compliance before the ld. AO, we also observed that he has submitted the cash book with the related bills and vouchers as additional evidence under Rule 46A before the ld. CIT(A), with a request that the same may kindly be accepted and considered while deciding the matter. However, the ld. CIT(A) does not appear to have taken cognizance of this additional material in deciding the matter but has rather held that no material has been submitted. In view of the same, we deem it appropriate to restore the matter back to the file of the ld. AO with a direction to the assessee, to produce the said material before the ld. AO and make full compliance before him, so as to enable him to compute his income for the said assessment year. The matter is accordingly restored to the file of the ld. AO for a de novo assessment in accordance with law, after considering the cash books and the related bill vouchers that are essential to determine the nature of the deposits in the bank account. As the matter has been restored to the file of the ld. AO, the appeal of the assessee is held to be allowed for statistical purposes.