DEVRAJ N VARN,MUMBAI vs. ITO 19(2)(1), MUMBAI

Ground no. 1 and 2 raised by the assessee are on the issue of non-consideration of additional evidence resulting in violation of rules of natural justice.

Briefly the facts are, the assessee an individual derives income from manufacture and sale of readymade garments from his proprietary business M/s Moon Apparel. During the assessment proceeding the assessing officer having found that the assessee had made cash deposit of Rs. 25,66,423/- in his savings bank account with ICICI Bank called upon the assessee to explain the source of such cash deposit. It is alleged by the assessing officer, in spite of repeated opportunity bring granted to him, the assessee could not furnish necessary details with documentary evidence to explain the source of cash deposit. Accordingly, the assessing officer treated the cash deposit of Rs. 25,66,423/- in the ICICI Bank account as undisclosed income of the asessee and added back to the income. Though, assessee challenged the addition before the first appellate authority he also confirmed the addition. 4. The Ld. AR submitted, the assessing officer without affording adequate opportunity to the assessee to furnish necessary evidences completed the assessment by making the addition. He submitted, though, before the first appellate authority assessee had submitted documentary evidences, such as, copies of sale bills, purchase 3 Devran N Varn vouchers, labour payment details etc. by way of additional evidence, the CIT(A) without examining the evidences submitted by the assessee on its own merit rejected them and proceeded to confirm the addition. The Ld. AR, submitted the evidences submitted by the assessee being necessary and relevant material for deciding the issue, they have to be considered. He therefore submitted, for restoration of the issue to the file of the assessing officer for deciding afresh after examining the documentary evidences submitted by the assessee. 5. The Ld. DR, though, submitted that in spite of sufficient opportunity being granted to the assesse he failed to furnish necessary evidences before the A.O, however, he has no serious objection if the issue is remitted back to the assessing officer for fresh verification. 6. We have considered the submissions of the parties and perused the materials on records. The issue in dispute revolves around the cash deposit of Rs. 25, 66,423/- in the bank account with ICICI Bank. It is noticed, while explaining the source of such cash deposit before the assessing officer, the assessee had submitted that such deposits have come from sales effected as well as from earlier cash withdrawals. However, assessing officer has rejected assessee’s claim by stating that assessee had not submitted any sales/purchase bills.

In view of our decision in ground no. 1 and 2 there is no need to adjudicate ground no. 3 at this stage.