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Facts
The assessee company, engaged in construction, filed an appeal against the order confirming an addition of ₹.36,94,500/- made by the Assessing Officer on account of unexplained cash deposits during the demonetization period. The assessee failed to provide any explanation or cash book to justify these deposits.
Held
The Tribunal held that the assessee was given ample opportunity to provide evidence and explanations to justify the cash deposits, both before the Assessing Officer and the CIT(A), and even before the Tribunal. However, the assessee failed to do so.
Key Issues
Whether the CIT(A) was justified in confirming the addition made by the Assessing Officer on account of unexplained money under Section 69A of the Income Tax Act, 1961, due to the assessee's failure to explain cash deposits during the demonetization period.
Sections Cited
69A, 143(2), 142(1), 143(3)
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha
Year: 2017-18 M/s. Nellai Krishna Construction Vs. The Income Tax Officer, Pvt. Ltd., Plot No. 10, Flat-C-1, Corporate Ward 4(2), Pillayar Koil Street, Poonamallee, Chennai. Chennai 600 056. [PAN:AAECN7186R] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : None ��थ� की ओर से/Respondent by : Ms. Gouthami Manivasagam, JCIT सुनवाई की तारीख/ Date of hearing : 21.10.2024 घोषणा की तारीख /Date of Pronouncement : 23.10.2024 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 18.01.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18.
We find no representation on behalf of the assessee nor any application filed seeking adjournment. Thus, the assessee called absent and set exparte. We proceed to decide the appeal on merits after hearing the ld. DR basing on the material available on record.
We find that this appeal was filed with a delay of 148 days. On perusal of the notarised affidavit dated 19.08.2024 and hearing upon the ld. DR, we find the reasons explained by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay of 148 days is condoned.
The assessee raised 2 grounds of appeal amongst which, the only issue emanates for consideration as to whether the ld. CIT(A) is justified in confirming the addition made by the Assessing Officer on account of unexplained money under section 69A of the Income Tax Act, 1961 [“Act” in short].
5. We note that the assessee is company, engaged in the business of construction of residential and commercial building. The assessee filed return of income declaring total income of ₹.28,79,670/-. According to the Assessing Officer, the assessee has shown high value receipt of cash from 3rd parties and cash deposits during demonetization period. The Assessing Officer issued notices under section 143(2) and section 142(1) of the Act under scrutiny proceedings. On examination of the submissions by the assessee, the Assessing Officer asked the assessee to produce cash book and explain the reasons for huge cash deposit during demonetization period. According to the Assessing Officer, there was no explanation given by the assessee as well as no cash book furnished. The Assessing Officer proceeded to add an amount of ₹.36,94,500/- as were found deposited during demonetization period and determined total income of the assessee at ₹.65,74,170/- vide order dated 27.12.2019 under section 143(3) of the Act. The assessee challenged the same before the ld. CIT(A). According to the ld. CIT(A), no explanation nor written submissions filed with regard to the grounds raised therein challenging the addition made under section 69A of the Act. The ld. CIT(A), accordingly, proceeded to confirm the order of the Assessing Officer.
The ld. DR Ms. Gouthami Manivasagam, JCIT drew our attention to page 3 of the assessment order and argued that the Assessing Officer specifically asked the assessee to give explanation with support of cash book and proper details. The Assessing Officer rightly computed the assessment by making addition in the hands of the assessee in the absence of any explanation. Further, she drew our attention to para 5.2 of the impugned order and vehemently argued that the assessee failed to produce any material in support of the grounds raised before the ld. CIT(A). She argued that non-submissions of relevant evidence before the Assessing Officer and the ld. CIT(A) shows that the assessee has no relevant documentary evidence in support of its claim. Further she argued that there was no material evidence supporting the grounds raised in Form 36 before this Tribunal. She also argued that the assessee does not deserve any opportunity as the conduct of the assessee before the authorities below clearly shows that the assessee has no material evidence in support of its claim.
Upon hearing the ld. DR and on perusal of the assessment order as well as impugned order, we note that the Assessing Officer as well as the ld. CIT(A) have given ample opportunity to the assessee to file material evidence in support of the claim of the assessee. However, the assessee could not file any explanation for the cash deposits as found in bank account during demonetization period. Before the Tribunal also, the assessee could not explain the source for the cash deposits during demonetization period. Thus, we find no option but to sustain the addition made by the Assessing Officer and as confirmed by the ld. CIT(A). Accordingly, the grounds raised by the assessee are dismissed.
In the result, the appeal filed by the assessee dismissed. Order pronounced on 23rd October, 2024 at Chennai.