GUNASEKARAN VELLAYAN,SALEM vs. ITO, WARD 1(8), SALEM, SALEM

The facts in both the appeals of the assessee are identical and common hence, we proceed to pass a common order. For brevity, we lead case.

The only effective ground of appeal in both the appeals is against confirming the addition of cash deposit in bank account.

The brief facts of the case are that the A.O has reopened the assessment on the basis of information that the assessee has made payment of Rs.1,33,83,333/-during Financial Year 2011-12 relevant to A.Y 2012-13 and a sum of Rs.39,11,667/- during Financial Year 2012- 13 relevant to A.Y 2013-14 for purchase of land and building measuring 4.57 Acres by way of public auction of property of M/s.

Mettur Textile Industries Ltd. conducted by Hon’ble High Court of Madras in the name of M/s. V.S. Enterprises but has not filed return of income. As the assessee has been non-complied to the notice issued u/s. 142(1) of the Act, the A.O has passed ex-parte order u/s. 144 of the Act and made the addition of cash deposit of Rs. 34,00,763/- in HDFC Bank and Rs.1,10,76,558/- in Central Bank of India u/s. 69A of the Act in A.Y 2011-12. On appeal, the Ld. CIT(A) has observed that the A.O while making addition on cash deposit has not considered the & 150/Chny/2024 :- 3 -: interbank transfer and therefore, directed the A.O to reduce the amount of addition if any, of credits in the bank account of assessee, which are interbank transfer among his own bank accounts. The Ld. CIT(A) has also observed that as the assessee has not furnished the relevant details of cash withdrawn therefore, there is no need to consider the telescoping or peak credit while computing the addition on unexplained money in the bank account.

The Ld. Authorized Representative (AR) of the assessee has argued that the A.O and Ld. CIT(A) were not justified to add entire bank deposit without considering inter banking transfer and the cash withdrawal from banks which was subsequently deposited in bank.

The Ld. AR has submitted that he has requested Ld. CIT(A) to call for a remand report to examine the bank statement as the assessment order was made ex-parte, but neither A.O nor Ld. CIT(A) examined the bank account.

We have heard the rival submissions, and perused the materials available on record. The A.O has made the addition of cash deposit/inter banking transfer totaling to Rs. 1,44,77,321/- u/s. 69A of the Act of Rs. 66,06,873/- in the ex-parte order passed u/s. 144 of the Act. The Ld. CIT(A) has directed the A.O to reduce the interbank transfer, but not considered the telescoping or peak credit while computing the addition on unexplained money in the bank account.

We find that the identical issue is involved in assessee’s appeal for A.Y 2013-14 also and accordingly, our & 150/Chny/2024 :- 5 -: adjudication above in A.Y 2012-13 is mutatis mutandis applies therein also. Hence, this appeal in for A.Y 2013-14 is allowed for statistical purposes.

In the result, both the appeals filed by the assessee are allowed for statistical purpose.