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Facts
The assessee filed an appeal against the order of the CIT(A). The assessee did not appear before the Tribunal on the hearing date, despite the notice being duly served. The Tribunal proceeded ex-parte. The appeal pertained to additions of Rs. 13,05,000/- made by the AO on account of unexplained cash deposits during the demonetization period.
Held
The Tribunal noted that the notice was duly served on the assessee, but they failed to appear. The assessee also failed to provide basic details or evidence to support their claim that the cash deposits were from business proceeds. The Tribunal found no reason to interfere with the orders passed by the revenue authorities.
Key Issues
Whether the addition made by the AO on account of unexplained cash deposits is justified, and whether the assessee's non-appearance and lack of evidence warrant dismissal of the appeal.
Sections Cited
250, 69A
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Income Tax Appellate Tribunal, “SMC” BENCH MUMBAI
Before: HON’BLE SHRI SANDEEP GOSAIN
Assessee by None Revenue by Shri Vithal Machindra Bhosale, Sr. DR Date of Hearing 17.12.2024 Date of Pronouncement 19.12.2024 आदेश / ORDER
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order 29.08.2024, passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi / (‘Ld. CIT(A)’), for the assessment year 2017-18.
At the time of hearing, none appeared on behalf of the assessee when the case was called. From the records, we noticed that the service of notice was effected upon the 2 Siddhivinayak Sales Corporation, Mumbai assessee through registered post acknowledgement due on the address supplied by the assessee, however the said notice was returned back with the endorsement ‘left’ and assessee has not provided any other address for effecting service. The notice was sent on last and best known address. Therefore, I consider the service of notice upon the assessee was ‘duly served’ and thus it was the duty of the asessee to appear before the Bench on each and every date of hearing as the appeal has been filed by the assessee. Since none appeared on behalf of the assessee when the case was called, which shows that assessee is not interested in pursuing the present appeal, therefore assessee is proceeded ex-parte. On the contrary, the Ld. Ld.DR present in the court is ready with the arguments, therefore I have decided to proceed with the hearing of the case ex-parte.
By raising the grounds of appeal
, the assessee has challenged the reopening of assessment and also sustaining and confirming the additions of Rs. 13,05,000/- as undisclosed income. From the records, I noticed that on the basis of information received by the AO that assessee had made cash deposits during the demonetization period hence notices were issued to the assessee and after seeking reply of the assessee assessment was framed thereby making additions as the assessee could not explain the source of deposit of the above amount in his bank account. Even before Ld. CIT(A) the assessee has not made any compliance
3. Siddhivinayak Sales Corporation, Mumbai of the notices issued to him. Therefore considering the facts of the appeal the same was also dismissed.
Now after having gone through the entire facts and circumstances of the present case and also having heard Ld. DR I am of the view that it is obligatory on the part of the assessee to cooperatively and effectively pursue the appeal before the appellate authority in effective and productive manner. Whereas the facts of the present case clearly reveals that assessee through its repetitive none compliance has shown complete lack of interest in pursuing the appeal. The assessee has not even given the basic details in support of its claim and therefore I find no reasons to interfere into or deviat from orders passed by the revenue authorities. The only defence raised by the assessee before the Ld.AO was that the cash deposited during the demonetization period was from its business proceeds, however the AO did not accept it and the operative portion of the order of the AO is reproduced below:
(vi) On perusal of Return of Income filed by the assessee, it is seen that the assessee has disclosed the cash deposit to the tune of Rs.9,85,000/- only as against the total cash deposit made of Rs. 13,05,000/-. Further, on perusal of cash book submitted by the assessee, it is seen that cash sales to the tune of Rs.8,08,960/- is reflecting on 18.11.2016. It is pertinent to mention that the total cash sales during the period 01.04.2016 was Rs.44,16,008/-. The daily average cash sales arrive at rs. 16,355/- (44,16,008/270) against the sale of Rs.5,47,389/- in the month of April. 12-month average cash sales arrive at Rs.3,68,000/- (44,16,008/12). This clearly shows that the sale on 4 Siddhivinayak Sales Corporation, Mumbai 09.11.2016 & 30.11.2016 was exceptionally high. It is pertinent to mention that the assessee had deposited cash to the tune of Rs. 13,05,000/- in its bank account in the period 09.11.2016 & 30.11.2016. Further, the cash deposits do not commensurate with the income by the assesse. As discussed above, the submission of the assessee has various discrepancies and hence, the same could not be entertained. The documents submitted by the assessee is colourable documents and the same has been made to justify the cooked story. The assessee has no proper source of income to make such a huge cash deposit in his bank accounts during the demonetization period."
Therefore, in the absence of any evidence regarding the source of cash deposits the AO has rightly held the sum as unexplained and made addition u/s 69A of the Act. Even before CIT(A) and before me the assessee has neither appeared nor placed on record any details or submissions to rebut or controvert the findings of the revenue authorities. Thus, I feel no reasons to interfere into the well reasoned orders passed by the revenue authorities.
In the result, the appeal filed by the assessee stands dismissed with no order as to cost.