MR. RAHUL SHARMA,NEW DELHI vs. ITO, NEW DELHI

O R D E R PER PRASHANT MAHARISHI, A. M. 01 The brief fact of the case is that appellant is an individual deriving income from business. He is engaged in the manufacturing and resale of auto and chair parts under the name and style of M/s Shree sanwali Pressing Industries. He filed his return of income on 23/8/2011 showing income of Rs. 2,39,160/–. The ld AO selected the case of the assessee for scrutiny. During the assessment proceedings, the Ld. AO asked assessee to give complete details of the all bank accounts maintained by the assessee. The assessee submitted the details of two current accounts with State Bank of Bikaner & Jaipur and Axis Bank. 1 SA 247/Del/2018 Rahul Sharma V ITO A Y 2011-12 The ld AO asked assessee specifically to submit the copy of the savings bank account of the assessee. The assessee submitted that he does not have any said saving account and assessee has filed affidavit to this effect. The Ld. AO said any Inquiry letter under section 133 (6) on 20/1/2014 to the ICICI bank from which the assessee has shown savings bank interest income of Rs. 356/–. The Ld. AO found that assessee has 3 saving bank accounts and 1 current account out of the one saving bank account the assessee has deposited cash of Rs. 6 0, 17, 400/-. The ld AO asked assessee to furnish the detail of the source of the cash deposited in this bank account. However, he neither filed any statement of bank account nor submitted any explanation regarding source of deposit stop and therefore the Ld. AO made the addition of Rs. 60,17,400/– to the total income of the assessee. Certain other minor disallowance were also made and the assessment under section 143 (3) was passed determining total income of the assessee at Rs. 62,83,790/– against the returned income of Rs. 2, 39, 160/– 02 Assessee aggrieved the order of the Ld. AO preferred appeal before the Ld. CIT (appeals) – 17, New Delhi. The Ld. CIT (A) dismissed the appeal of the assessee as none appeared before him despite giving enough opportunities. Assessee also did not file any written submission. On the last date of hearing, neither anybody attended nor was any written reply filed. Therefore, the Ld. CIT (A) upheld the order of the Ld. AO. Therefore now assessee aggrieved with the order of the Ld. CIT (A) has preferred the appeal before us raising several grounds of appeal however the main grievance of the assessee is the confirmation of addition of Rs. 60,17,400/– of cash deposited in the bank account.

SA 247/Del/2018 Rahul Sharma V ITO A Y 2011-12 03 The Ld. authorized representative submitted a paper book before us containing 39 pages and submitted that that assessee was asked wide notice dated 14/3/2014 fixing the date of hearing on 21/3/2014 to explain the entries of cash deposited in the savings bank account. Further, he submitted that the Ld. AO received the copy of the bank statement from ICICI bank only on 18/3/2014 however, the date of notice is mentioned as 14/3/2014 and the same was served on the assessee on 20/3/2014. He submitted that the Ld. AO passed the assessment order on 29 /3/2014. He therefore submitted that there was no proper opportunity of hearing granted to the assessee to explain the source of the cash deposited in his savings bank account. On the merits of the issue is submitted that the cash deposited in the said bank account are related to the sale proceeds of the day-to-day business of the assessee. He also submitted that the assessee was not keeping good health. He further referred to the various letters submitted by the assessee before the Ld. AO. He further submitted that the assessee has remained present before the Ld. CIT (A) and for the reasons from the side of the assessee of his ill health; the relevant details could not be furnished. He further submitted the copy of the profit and loss account wherein sales recorded by the assessee total is Rs. 21.70 lakhs. He further submitted that it is not the case that the assessee did not disclose savings bank account. He further submitted the details of cash deposited in the bank account and submitted that there are also withdrawals in cash from the same bank account and therefore the addition of the whole amount made by the Ld. AO is without any basis. 04 The Ld. departmental representative vehemently supported the orders of the lower authorities and submitted that the assessee initially did not disclose the complete bank accounts maintained by him. He SA 247/Del/2018 Rahul Sharma V ITO A Y 2011-12 submitted that when cornered by the Ld. AO by making an independent enquiry under section 133 (6) of the act certain bank accounts were found wherein these amount was found to be deposited in cash for which assessee did not have any explanation. He therefore submitted that the addition has been made as assessee has failed to explain the source of such cash deposited before the lower authorities. He also submitted that there is no reason that when the bank account is shown in the balance sheet the assessee could not submit the source of such cash deposited. He further stated that before the Ld. CIT (A) the assessee was granted enough opportunities however assessee could not substantiate the source of the cash deposited in those bank accounts. He further submitted that even before the coordinate bench the assessee has merely stated that there are cash deposits and cash withdraws in the bank account of the assessee however there is no source explained by the assessee. In view of this, he submitted that the lower authorities have correctly made the addition. 05 We have carefully considered the orders of the lower authorities and rival contentions. It is apparent that assessee was asked to submit the complete details of various bank accounts held by him. The assessee did not come out with the clean hands and therefore the Ld. AO on the basis of information available with him issued letters under section 133 (6) of the act to the bankers and found that assessee has deposited the cash in his bank account . The assessee could not explain the source of such cash deposits in his bank account and therefore the Ld. AO made the addition to the income of the assessee. Even before the Ld. CIT (A), the assessee did not submit any information except seeking adjournments. However appreciating the explanation of the authorized representative made before us that the Ld. assessing SA 247/Del/2018 Rahul Sharma V ITO A Y 2011-12 officer issued notice under section 142 (1) on 14/3/2014 fixing the case for hearing on 21/3/2014 wherein the assessee was asked to file the copy of the savings bank account number and also the details of various transactions contained therein. It is the claim of the assessee that the above sum has been deposited out of the sales proceeds and recovery of debtors. The assessee has also submitted in his paper book an explanation submitted before the Ld. CIT (A) through its chartered accountants. In that letter, also it was submitted that since the time given was very short and time requested was denied by the Ld. AO and further the assessee was suffering from depression, which was also substantiated, by submitting the prescription of the doctor treating the assessee. It was further stated that there were regular withdrawals in the same bank account in cash and therefore even otherwise the total bank account deposits in cash cannot be added. The Revenue authorities have dealt with these facts. Further, the assessee also did not substantiate before the lower authorities that the above cash deposited in his bank account is out of his business proceeds. It is also apparent that very short time was available with the assessing officer to complete the assessment and further very short time given to the assessee to explain the deposits. Then assessee has also substantiated that he was suffering from depression at that particular time. All these cumulative facts require that ld AO May verify issue of cash deposited by the assessee vis-a-vis its taxability in the hands of the assessee properly. In view of this we set aside this appeal to the file of the Ld. assessing officer with a direction to decide the issue of cash deposit in the bank account of the assessee afresh after giving assessee a proper opportunity of hearing. We also direct the Assessee to appear before the Ld. AO and give complete details of the cash deposited in the bank account explaining its source.