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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
This appeal by the assesse is directed against the order dated 27.11.2023 of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centers,(NFAC), Delhi for A.Y.2012-13.
The assesse has raised following grounds of appeal:
“1. The Learned assessing officer and commissioner of Income tax (NFAC) is not justifying treating whole of cash deposited as income of assessee. Considering facts and circumstances of assessee Assessee is engaged in the business of Small animal husbandary business without having any Raees Qureshi permanent establishment during the said period. It is Practice of Small trader that whole of receipt has been deposited over the period of time in saving bank account without opening of current account. receipts of Rs 2369700/- is not the income of the assessee but actual sales of assessee. Also we have produced letter of Gram panchayat Ghosala which shows that we have engaged in such business from the year 2009 itself”.
The assessee is an individual and filed his return of income on 26.12.2012 declaring total income of Rs.1,14,000/-. The Assessing Officer received AIR information of cash deposit in bank account to the tune of Rs.23,69,700/-. Accordingly Assessing Officer has issued a notice u/s 148 of the Act and completed the assessment of the assessee u/s 144 r.w.s. 147 of the Act when there was no response to the notice issued by the A.O. The A.O has assessed the total income of the assessee at Rs.23,69,700/-. The assessee challenged the action of A.O before CIT(A) and submitted that the assessee is in the business of animal husbandry for past several years and explained the source of cash deposits in his saving bank account as the turnover of the assessee’s business which rotated in the bank account of the assessee leading to total deposit of Rs.23,69,700/-. The contention of the assessee before CIT(A) were based upon the fund flow statement to show that the deposits in the bank account were only the business receipts from time to time which is also withdrawn from time to time and therefore, only a small amount is routed in the bank account in the shape of deposits and withdrawals. The CIT(A) was not impressed with the explanation of the assessee and confirmed the addition made by the A.O. Raees Qureshi 4. Before the Tribunal the Ld. AR of the assessee reiterated the contentions as raised before the CIT(A) and submitted that the assessee is engaged in the business of animal husbandry without any permanent establishment. The whole of the receipt has been deposited over a period of time in the saving bank account with corresponding withdrawals from time to time. Thus Ld. AR submitted that the deposits in the bank account is nothing but the business turnover of the assessee which is also supported by the cash flow statement. Ld. AR has also filed the supporting evidence including the certificate of Gram Panchayat for the business of purchase and sale of the animal, invoices of purchase and sale of the animals, registration with the Municipal Committee and submitted that all these evidences establish the fact that the assessee has carried out the business of purchase and sale of animals particularly goats. Hence, Ld. AR has pleaded that the addition made by the A.O and sustained by the CIT(A) may be deleted.
On the other hand Ld. DR has submitted that the A.O has passed best judgment assessment when there was no response on behalf of the assessee to the notices u/s 148 as well as u/s 142(1) of the Act. Even before the CIT(A) the assessee has not produced any supporting evidence to show the purchase and sale of animals. He has referred to the finding of CIT(A) and submitted that the addition has been upheld by the CIT(A) for want of supporting evidence filed by the assessee. He submitted that the assessee has Raees Qureshi first time produced the evidence which is an additional evidence not being examined or verified by the A.O or CIT(A).
We have considered the rival submissions as well as the materials on record. The A.O has reopened the assessment based on the cash deposit in the S.B A/c to the tune of Rs.23,69,700/-. The reassessment was completed u/s 144 r.w.s. 147 of the Act when there was no response on behalf of the assessee to the notice issued by the A.O. Thus the A.O has framed the best judgment assessment and made the addition of the cash deposited in the bank account for want of supporting evidence and explanation of source. The CIT(A) confirmed the addition made by the A.O by giving reasons in para 5.4 and 5.5 as under:
“5.4 The submissions made by the appellant have been duly considered. In the submissions filed, the appellant has claimed that he is engaged in animal husbandry business and the cash deposited are sale proceeds of the business. The fact remains that the appellant has not furnished any bills/invoices to support the sources of business carried out and sale proceeds claimed. The submissions filed are not supported by way of documentary evidences as no proof of having received cash in lieu of sales is submitted. It is also noticed that no evidence for having done any business is submitted. The cash book submitted lacks any evidentiary value as no supporting evidences to justify the claims made have been submitted. The appellant's claims are devoid of merit and are not evidenced by way of supporting evidences. 5.5 In the instant case, the sources and nature of cash deposits/credit made remained to be explained. The A.O has correctly and judiciously taxed the cash deposited as unexplained money. The assessment order is duly reasoned. Reasonable opportunity of being heard is accorded before passing the assessment order. In view of the above, I am of the considerate view that no interference is called for in respect of the additions made in the assessment order passed. The additions made are sustained. Accordingly, the appeal is dismissed on this issue”.
Raees Qureshi 7. The Ld. CIT(A) has stated that the assessee has not furnished any evidence to support the source of business and sale proceed claim. Now the assessee has filed the supporting evidence first time before this Tribunal which requires to be verified and examined at the level of the A.O. Accordingly in the facts and circumstances of the case and in the interest of justice the impugned order of Ld. CIT(A) is set aside and the matter is remanded to the record of jurisdictional A.O for fresh adjudication after verification and examination as well as consideration of the additional evidence filed by the assessee. Needless to say the assessee be given an appropriate opportunity of hearing before passing the fresh order.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 03.07.2024.