TEJRAO BHAGAJI ARAKH,AURANGABAD vs. INCOME-TAX OFFICER, NASHIK

PER D. KARUNAKARA RAO, AM:

This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals)-1, Aurangabad dated 15-02-2017 for the Assessment Year 2005-06.

“1. The AO is not justified in adding cash deposited in bank account as unexplained investment of the assessee as the amount deposited by the assessee does not belong to him. 2. The AO did not provide sufficient time for submission of the reply and passed the order u/s.144 of the Income Tax Act, 1961. Hence, he is not justified in passing order u/s.144 of the Income Tax Act, 1961.

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individual working as an employee in the Agricultural Department of

Maharashtra Govt. Assessee derives income from salary. He was

incharge of handling cash in the office. Assessee has a bank account in

the Malkapur Urban Cooperative Bank Ltd., Sillod bearing Account

No.0002155. Assessee deposited cash of Rs.17,27,250/- belonging to

his office in his bank account since his office does not have any bank

account. Assessee withdrew the cash whenever the payments was

required to be made. AO issued notice u/s.142(1) of the Act calling for

return of income. Assessee neither appeared before the AO nor filed the

return of income. Eventually, the AO completed the assessment u/s.144

of the Act on 27-12-2007 based in the information available with him.

09-2010 stating that, during the period 01-04-2004 to 31-03-2005, he

was incharge of handling cash in the Agricultural Department at Sillod.

He has bank account with Malkapur Urban Cooperative Bank Ltd.

Sillod. As per the assessee, it is a case of depositing the amount for

safekeeping of the money temporarily. It was argued that most of the

transactions are related to office and very few relates to his personal

savings. The CIT(A) called for a remand report from the AO. In

response, the AO submitted his remand report dated 12-11-2010. In the

said report, it was stated that the Taluka Agricultural Officer, Sillod

confirmed that the office did not have any bank account and therefore,

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the cash belonging to office was deposited in the savings account with

Malkapur Urban Cooperative Bank. He also confirmed the fact that the

amount was withdrawn from the said account for office purpose. He also

confirmed that cash was utilized for official purpose. Subsequently, an

affidavit given by Taluka Agricultural Officer dated 16-07-2016 was filed

affirming the statement given by him. Statement of Shri Kautik

Laxmanrao Sonawane, Sr. Clerk was also recorded. The CIT(A) after

considering the remand report, statements recorded by the AO and

opined that assessee was not authorized to take or deposit cash in his

personal bank account. He noted that the affidavit of Taluka

Agricultural Officer was signed by Shri Kautik Lamanrao Sonwane, Sr.

Clerk, and on examination of the facts, he opined that the assessee as

well as Shri Kautik Lamanrao Sonwane has failed to explain the

difference of opening and closing balance in the said savings bank

(details mentioned at page 7 of the order of CIT(A). The CIT(A) concluded

that affidavit of Shri Kautik Laxmanrao Sonwane dated 16-07-2016 was

not reliable. Eventually, the CIT(A) upheld the addition made by the AO

as unaccounted cash us/.69 of the Act.

the Tribunal with the grounds mentioned above.

case filed the written submissions along with additional evidences

relating to reconciliation of office cash book with the bank statement. It

is the prayer of the Ld. Counsel that there is need for appreciating the

new facts and arguments by the AO. Ld. Counsel filed additional

grounds as well as additional points in his written submissions.

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revenue and the written submissions filed by the assessee, I find there is

a need to remand the issues raised in the appeal to the file of AO. The

interest of justice is paramount important. The additional points raised

by the Ld. Counsel for the assessee in his written submissions are

extracted here as under :

“(a) The Bank statement at Opening & Closing Balance is Rs.2,000 & Rs.3,000 respectively, whereas in that period Appellant not made any investment in any of his account or his family member, so income or profit not made by the appellant. (b) If the Authorised Officer of the Agricultural Department in his office letter and on the affidavit specifically states that the transactions made in the account of the appellant related to the Agricultural Department & not the personal cash of the Appellant. Due care should be taken into account while making the addition in the hands of appellant.”

Considering the additional points related to the issue under

consideration, I find it is a case of ex-parte assessment and no proper

reason was recorded by the assessing authorities before making addition

of Rs.17,27,250/- by passing a speaking order. Same is the case before

the CIT(A) also. The statement recorded by the Department from Shri

Kautik Laxmanrao Sonwane is required to be considered in a holistic

manner in the light of additional points filed before me. The additional

filed by the assessee are required to be considered in view of the peculiar

circumstances of the case and in the interest of administration of justice.

Therefore, I am of the opinion that the grounds/additional

grounds/additional evidences should be remanded to the file of AO. AO

is directed to admit the additional grounds/additional evidences and

adjudicate the entire issue afresh in accordance with the set principles of

natural justice. Accordingly, the grounds raised by the assessee are

allowed for statistical purposes.

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Order pronounced on this 20th day of June, 2018.

Sd/- (D.KARUNAKARA RAO) लेखा सद� / ACCOUNTANT MEMBER पुणे / Pune; िदनांक Dated : 20th June, 2018. Satish आदेश की !ितिलिप अ#ेिषत/Copy of the Order is forwarded to : अपीलाथ� / The Appellant; 1. ��थ� / The Respondent; 2. आयकर आयु�(अपील) / The CIT(A)-1, Aurangabad 3. आयकर आयु� / The Pr.CIT-1, Aurangabad 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” 5. / DR ‘SMC’, ITAT, Pune; गाड# फाईल / Guard file. 6.

आदेशानुसार/ BY ORDER,स स�ािपत �ित //True Copy// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune