SWAPAN KUMAR MAJUMDAR,KOLKATA vs. ITO, WARD-36(2), KOLKATA, KOLKATA

The only issue is to be decided as to whether the CIT-A justified in confirming the impugned addition of Rs. 18,00,000/- towards cash deposits into bank u/s. 68 of the Act in the facts and circumstances of the case.

The brief facts of the issue are that the assessee being an individual filed his return of income on 27-01-2010 disclosing total income at Rs.88,071/-. Under scrutiny, notices U/Sec. IT A No. 1770/Kol/14 Swapan Kr. Majumdar 1 143(2) and 142(1) of the Act were issued. In response to which, according to AO that no compliance was made by the assessee. As per AIR information the AO found that the assessee has made deposit of a sum of Rs. 18 lakhs in his bank account maintained with Axis Bank Ltd during the year under consideration. In view of such non compliance to the said notices, the AO issued show cause for fixing the date of hearing on 26-12-2011 mentioning as to why the deposit of Rs. 18 lakhs made in the said bank should not be treated as undisclosed income/source of assessee and as there was no compliance, thus, he added the sum of Rs. 18 lakhs to the total income of assessee and under best of his judgment an order u/s. 144/143(3) of the Act was passed at Rs.18,88,071/-.

The assessee challenged the same before the CIT-A. Before him the assessee was given opportunity of hearing on various dates, but the assessee sought adjournments. The assessee did not submit/file any supporting evidences to rebut the addition made by the AO. As such there was no compliance on behalf of assessee, the CIT-A confirmed the impugned addition as made by the AO by observing that the assessee failed to explain the nature and source of the cash deposits. Therefore, he was of the view that the AO was justified to make addition u/s. 68 of the Act.

Before us the ld.AR refers to page 20 of the paper book and submits that the assessee made deposits from 07-04-2008 and thereafter also withdrew the amounts from said bank account (Axis Bank) and argued that said deposits were made by withdrawing the same from same account. Therefore, the IT A No. 1770/Kol/14 Swapan Kr. Majumdar 2 source of such deposits are only withdrawals from the said bank account. In support of the contention, the ld.AR of the assessee also referred to page 21 of the paper book, which is cash flow statement as on 31-08-08 and argued that the deposits made by the assessee in his bank account were from advance received cash against order sale of goods and pointed out to the transactions made on 15-04-08 and 16-04-08 and urged to remand the issue to the file of the AO for his consideration.

On the other hand, the ld. DR submits that the assessee did not offer any explanation/file any evidences in response to show cause notice as issued by the AO and the assessee also did not comply of notices issued u/s. 143(2) and 142(1) of the Act. He also pointed out to para 4 of the CIT-A’s order and argued that the CIT-A has given many opportunities to the assessee to substantiate his claim and to rebut his contention/addition made u/s. 68 of the Act. However, he relied on the orders of the authorities below.

Heard rival submissions and perused the material available on record. We find that the assessee did not respond/comply to the statutory notices issued u/s. 143(2) and 142(1) of the Act before the AO and also did not offer any explanation to the show cause notice dated 22-12-2011 issued by the AO mentioning why the deposit of Rs. 18 lakhs in the bank account should not be treated as income from undisclosed source and taxed to the total income of assessee. We find that before the CIT-A the assessee did not prosecute his case properly. Before him on every date the assessee sought adjournments. Therefore, it is clear that before the CIT-A there was no proper IT A No. 1770/Kol/14 Swapan Kr. Majumdar 3 representation by the assessee. With regard to submissions of the ld.AR of assessee referring page 20 & 21 before us, we find that this submission was not before the authorities below. In such circumstances and in the absence of such submissions before the authorities below, we deem it fit and proper to remand the issue to the AO for his verification and to pass an order to that effect as per law. The assessee is also directed to produce evidences, if any, to substantiate his claim/contention. Accordingly, the ground(s) of the Assessee are allowed for statistical purpose as indicated above.

In the result, the appeal of the assessee is allowed for statistical purposes. ORDER PRONOUNCED IN OPEN COURT ON 28 /02/2017