SRINIVASAN MOHAMMAD IIBRAHIM,MADURAI vs. THE INCOME TAX OFFICER, NON CORPORATE WARD-2(3), MADURAI

First, we shall take up the appeal against quantum addition in for adjudication.

The only effective ground emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition of ₹.19,22,156/- made under section 68 of the Act.

At the outset, we note that the assessment was completed under section 147 read with section 144B of the Act by disallowing 5% of total cash deposits of ₹.3,84,43,125/- under section 68 of the Act at ₹.19,22,156/- holding that the assessee could not furnish supporting documents to prove the sources that recovery has been made from debtors besides not substantiating the cash withdrawals from bank with supporting evidence. On perusal of the appellate order, we note that the ld. CIT(A) confirmed the order of the Assessing Officer.

The ld. AR Shri I. Dinesh, Advocate submits that the Assessing Officer passed a cryptic order without verifying any of the evidences filed by the assessee vide his letter dated 09.03.2022 before the Assessing Officer, in which, the assessee has voluntarily furnished the details of total deposits of cash in various bank account, cash book containing the details of recovery made from debtors, etc. Without calling for any further details, as may be required by the Assessing Officer, the assessment was completed on 28.03.2022 by disallowing 5% of total cash deposits of ₹.3,84,43,125/- under section 68 of the Act at ₹.19,22,156/- is not correct. The ld. AR requested to remand the matter to the file of the Assessing Officer as the assessee is ready to furnish the details as may be required by the Assessing Officer and to prosecute his case if the Tribunal afford an opportunity.

The ld. DR Shri R.V. Aroon Prasad, Addl. CIT relied on the order passed by the ld. CIT(A).

As discussed above, we note from the assessment order as well as impugned order that against the notice issued by the Assessing Officer vide letter dated 09.03.2022, the assessee furnished the details of cash deposits in various bank accounts, recovery from debtors, cash book, etc. and no further notice has been issued by the Assessing Officer seeking further details. Since the ld. AR prayed to afford an opportunity to furnish complete details as may be required by the Assessing Officer to prosecute his case, we deem it proper in the interest of justice to remand the matter back to the file of the Assessing Officer for his consideration afresh. The assessee is at liberty to file evidence in support of his claim and the Assessing Officer shall conduct the assessment proceedings de novo. Thus, grounds raised by the assessee are allowed for statistical purposes.

We note that against the assessment order under section 147 r.w.s. 144B of the Act dated 28.03.2022, the Assessing Officer passed rectification order under section 154 r.w.s. 147 of the Act dated 12.10.2023 on the ground that while computing tax, tax was charged at a lower rate and lesser interest of tax under section 234 B, 234C of the Act and rectified the mistake. Accordingly, fresh demand notice was issued on the assessee. On perusal of the appellate order, we note that the ld. CIT(A) confirmed the rectification order passed under section 154 of the Act against which, the assessee preferred an appeal before the Tribunal.

Since we have set aside the order of the ld. CIT(A) against confirmation of quantum addition and remitted the matter back to the file of the Assessing Officer for de novo consideration, at this stage, the appeal filed against rectification order is mere academic in nature, requires no adjudication and liable to be dismissed as infructuous. Accordingly, the appeal filed by the assessee is dismissed.

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