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Facts
The assessee, a milk distributor, appealed an addition of Rs. 29,38,650 made under Section 69A for cash deposits in the bank, which was confirmed by the CIT(A). The CIT(A) had dismissed the assessee's appeal for non-prosecution due to non-compliance with notices, while the assessee contended they were not given adequate opportunity by the AO.
Held
The Income Tax Appellate Tribunal (ITAT) observed that the assessee was not given adequate opportunity by the AO, and the DR did not object to this contention. In the interest of justice, the ITAT remitted the issues back to the AO with directions to provide the assessee with an adequate opportunity of being heard and decide the matter afresh.
Key Issues
Whether the addition under Section 69A was correctly made and confirmed when the assessee claimed lack of adequate opportunity to present their case before the lower authorities, necessitating a remand for proper hearing.
Sections Cited
Section 69A of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “C”, NEW DELHI
Before: SHRI SHAMIM YAHYA, & SHRI YOGESH KUMAR US
Date of hearing : 29.10.2024 Date of pronouncement : 29.10.2024 ORDER
PER SHAMIM YAHYA, AM :
The Assessee has filed the instant Appeal against the Order of the Ld. CIT(Appeal)/NFAC, Delhi dated 22.02.2023, relating to assessment year 2017-18 on the following grounds:-
1. That the learned Authorities below have grossly erred in law and facts in passing the order which is bad in law and facts. Hence liable to be quashed.
2. The appellant engage in business of distribution of mother dairy poly pack milk & milk product in a specified area such as Rani Garden, Shashtri Nagar, Aram park, Lahore Colony , Delhi 110031, since November , 2015 To May 2022. Sir I am authorized milk distributor of Mother dairy having code MD:CHM;74725. Due to my business nature my whole transaction is in cash. I am to pay Mother dairy on daily Basis through ECS from State Bank of India Account No. 35309244451.To make ECS clear on daily basis I have to deposit my daily sale proceeds In my above mentioned SBI account number after retaining my commission/margin. This process is regular on daily basis. I have only my Commission Income , there is no any extra Income earned from mother dairy or no any other income source, So There is no addition of income under sec 69A of income tax act. All the transactions of Business through banking channels and only payment made to Mother Dairy i.e. Milk Supplier only. My all banking transactions are genuine and related to my business only. I have all the necessary documentary evidence related to my Business transactions as well as banking transaction.
3. That the learned Authorities below have .grossly erred in law and facts in imposing Tax Rs. 29,38,650 addition u/s 69A of the Income Tax Act, 1961 without considering the facts of the case. Hence the addition is liable to be deleted.
2. In this case, AO made an addition on account of deposit of cash in bank amounting to Rs. 29,38,650/-. AO has also noted that assessee has also not properly complied with the notices.
3. Upon assessee’s appeal Ld. CIT(A) passed the order by noting that assessee has not properly complied with the notices. He confirmed the AO’s action by dismissing the appeal for non-prosecution.
Against this order, assessee is in appeal before us.
We have heard both the parties and perused the records. Ld. Counsel for the assessee pleaded that assessee has not been given adequate opportunity before the AO to properly canvass his case. Ld. DR did not object the aforesaid proposition. 5.1 After considering the aforesaid factual matrix, we are of the considered view, that interest of justice will be served, if the issues in dispute are remitted back to the file of the AO with the directions to decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly.