MOHD. SHARFUDDIN,MORADABAD vs. ITO 1(1), MORADABAD

Briefly stated, the facts of the case are that the assessee filed his Return of Income on 31.10.2017 declaring an income of Rs. 5,82,760/-.

1. Return was selected for scrutiny assessment through CASS and The AO found that cash of Rs 82,77,000/- was deposited by the assessee during the demonetization period. In absence of any explanation or compliance from the assessee, the AO rejected the books of account u/s 145(3) and framed the assessment vide order u/s 144/143(3) dated 29.11.2019 wherein an addition of Rs. 82,77,000/- was made u/s 69A of the Act. Against the addition, the assessee appealed before the CIT(A) who confirmed the addition. The aggrieved assessee is now before us.

Before us, the Ld. AR vehemently argued that the Assessing Officer has rejected the books of account of the assessee arbitrarily. It is the say of the ld. counsel for the assessee that the Assessing Officer could not substantiate his view that how the cash deposit of the assessee is unexplained money and the assessee has earned extra income other than the disclosed in his financial statements. The Assessing Officer has no material and valid reason for the addition.

Per contra, the Ld. DR has relied upon the orders of the Assessing Officer and the CIT(A).

We have heard the rival submissions and perused the materials available on record. From the entire conspectus of events, we find that the assessee should have been given a proper and reasonable opportunity to explain its position on the cash deposit. We are therefore

Page 2 of 4 convenience, the issue should be remitted back to the file of the Assessing Officer for examining the issue properly. We therefore, consider it fit to set aside the orders of the CIT(A)/Assessing Officer and direct the Assessing Officer to give a reasonable opportunity to the assessee and examine and adjudicate on the issue of cash deposit afresh.