KUPPAM THUPAS APPADURAI RAJA SAMPATH KUMAR,VELLORE vs. ITO, WARD-3,, VELLORE

The only issue in this appeal of the assessee is against confirming addition of cash deposit of Rs. 16,89,000/- u/s. 69A of the Act during the demonetization period.

The assessee is a distributor for Tide Water Oil Co. (India) Ltd.

and doing his oil lube business in the name of M/s. KTAR Sampath Kumar at Katpadi. The assessee has deposited cash of Rs. 32,33,000/- during demonetization period which included Specified Bank Notes (SBNs) of Rs. 16,89,000/-. The assessee has explained the cash deposit of SBNs out of cash sales however, the A.O has made the addition u/s. 69A of the Act applying the Human Probability Test that a person who possess a large amount of cash in hand, will deposit the same into the bank account immediately, but the cash deposit was made on various dates. On appeal, the Ld. CIT(A) has confirmed the addition made by A.O on the ground that the assessee’s has not filed necessary documents/evidence in the form of cash book, details of debtors etc. in support of his claim.

The Ld. Authorized Representative (A.R) of the assessee before us has submitted that the cash deposit is out of sale proceeds and it has been duly recorded in the books of account. The Ld. AR has submitted that the A.O and Ld. CIT(A) without examining the books of account has held the cash deposit unexplained and submitted that the assessee should be provided one more opportunity to produce the books of account before the A.O to substantiate his claim.

The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities.

We have heard the rival submissions, and perused the materials available on record. The assessee has explained the source of cash deposit in SBNs as proceeds from the business. However, the A.O has not examined the same. In view of the above, we are of the opinion that the assessee should be provided one more opportunity to substantiate his case before A.O. Accordingly, we set aside the orders passed by the A.O and the Ld. CIT(A) and remit the matter back to the file of the A.O to adjudicate this appeal afresh in accordance with law.

We also direct the assessee to appear before the A.O on the date of hearing without fail and furnish complete details for his fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.