Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, SMC-‘A’ BENCH : BANGALORE
Before: SMT. BEENA PILLAI & SHRI LAXMI PRASAD SAHU
ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal arises out of order passed by the NFAC, Delhi dated 27.03.2024 for A.Y. 2017-18 on following grounds of appeal.
Page 2 of “1. The Order of the learned Commissioner passed under section 250 of the Act is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant's case.
2. The Appellant denies to be assessed to tax on total income as determined by the learned AO of Rs. 23,00,300/- as against the total income reported by the Appellant of Rs.NIL on the facts and circumstances of the case.
3. The learned Commissioner of Income-tax (Appeals) erred in dismissing the appeal on the basis that there were no written submissions filed after giving sufficient opportunities in the facts and circumstances of the case.
4. The learned Commissioner of Income-tax (Appeals) erred in dismissing the appeal ex-parte without calling for a remand report from the AO; hence failed to exercise the powers conferred u/s 250 of the Act.
5. The learned Commissioner of Income-tax (Appeals) erred in upholding the addition made by the AO despite the notices were not served by the AO in the manner contemplated under the Act in the facts and circumstances of the case.
6. The learned Commissioner of Income-tax (Appeals) erred in upholding the addition of cash deposit of Rs. 18,33,200/- as unexplained money u/s 69A of the Act despite the fact that the Appellant has submitted that he is engaged in retail trade where cash dealing is the norm thus attributing the same as business income in the facts and circumstances of the case.
7. The learned Commissioner of Income-tax (Appeals) erred in upholding and confining the cash deposit of Rs.18,33,200/- during demonetisation as unexplained money u/s 69A of the Act despite the fact that the Appellant submitted that he is engaged in retail trade throughout the impugned year in the facts and circumstances of the case.
The learned Commissioner of Income-tax (Appeals) erred in upholding the addition of Rs. 4,67,100/- arbitrarily determined by taking 10% of cash deposit apart from demonetisation period despite the submissions made by the Appellant that he is ready to offer income by applying
Page 3 of 3-5% on total turnover of Rs. 93,33,230 (including cash deposit pertaining to sales during demonetisation) amounting to Rs.4,66,661/- as business income in the facts and circumstances of the case.
The learned Commissioner of Income-tax (Appeals) erred in upholding both the additions of Rs. 18,33,200/- as cash deposit during demonetisation and 5% of net profit rate of total turnover including demonetisation period of Rs. 93,33,230/- thus resulting in treating the same cash deposit during demonetisation differently u/s 69A of the Act while taxing the total turnover as business income resulting double taxation of cash deposit during demonetisation.
The Appellant craves leave to add, alter, delete or substitute any of the grounds urged above.
In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity.”
Brief facts of the case are as under: 2.1 Assessee is a proprietary small retail trader trading in paints and hardware items under the name Mathaji Hardware. The assessee filed return u/s. 139(1) of the act for year under consideration. The Ld.AO had information regarding substantial cash deposited during the demonetisation period and accordingly, notices was issued u/s. 142(1) of the act on 08.12.2018. The Ld.AO also called for information from the bank u/s. 133(6) of the act. The Ld.AO noted that assessee had deposited a sum of Rs.18,33,200/- during the demonetisation period and a sum of Rs.46,71,000/- during other than demonetisation period. Subsequently, the assessee was issued
Page 4 of various notices however there was no response. The Ld.AO thereafter completed the assessment by making addition in the hands of the assessee amounting to Rs.23,00,300/- wherein sum of Rs.18,33,200/- was treated as unexplained money u/s. 69A of the act.
2.2 The Ld.AO out of the remaining credits amounting to Rs.46,71,000/- considered it to be out of business activity and made an adhoc disallowance of 10% amounting to Rs.4,67,100/-.
2.3 Aggrieved by the order of the Ld.AO, assessee preferred appeal before the Ld.CIT(A). Before the Ld.CIT(A), again the assessee did not file any response even after notices being issued on multiple dates. The Ld.CIT(A) thus confirmed the additions made by the Ld.AO.
2.4 Aggrieved by the order of the Ld.AO, assessee is in appeal before this Tribunal.
Before us, the Ld.AR furnished affidavit dated 24.05.2024, stating that, the assessee was in the process of collecting materials relevant to establish the claim as per the advice received from his representative. It is submitted that, all these collating of materials took time, because of which, the assessee could not file any response before the Ld.CIT(A).
On the contrary, the Ld.DR relied on the orders passed by authorities below and submitted that there is no error in the order of the first appellate authority.
We have perused the submissions advanced by both sides in the light of records placed before us.
It is noted that assessee is in the business of trading in paints and other hardwares on retail basis. There is cash deposited during the demonetisation period and other than demonetisation period. Considering the nature of business activity carried on by the assessee, the entire issue deserves to be looked into once again based on the following CBDT instructions issued for verification of the demonetised cash deposited into the accounts. a) The 1st instruction was issued on 21/02/2017 by instruction number 03/2017. b) The 2nd instruction was issued on 03/03/2017 instruction number 4/2017. c) The 3rd instruction was in the form of a circular dated 15/11/2017 in F.No. 225/363/2017-ITA.II and the last one dated 09/08/2019 in F.no.225/145/2019-ITA.II.
In respect of the business profits treated by the Ld.AO on adhoc basis, we note that, the cash book and the other trading ledger books deserves to be reverified. The assessee is directed to furnish all the relevant information and details in support of the claim, based on which, the assessing officer is directed to carry out necessary verifications. In the interest of justice, the appeal
Page 6 of Ld.AO to consider the claim afresh and to pass a detailed order on merits. Accordingly, the grounds raised by the assessee stands partly allowed for statistical purposes. In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 18th June, 2024.