AKHILESH SHUKLA,BHOPAL vs. THE ITO 1(1), BHOPAL

Feeling aggrieved by appeal-order dated 29.03.2023 passed by learned Commissioner of Income-Tax (Appeals), NFAC, Delhi [“CIT(A)”], which in turn arises out of assessment-order dated 28.02.2014 passed by learned ITO, 1(1), Bhopal [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2011-12, the assessee has filed this appeal on following effective grounds:

The background facts leading to present appeal are such that the assessee individual filed his return of income declaring a total income of Rs. 5,26,090/- which was selected for scrutiny and statutory notices u/s 143(2)/142(1) were issued. During scrutiny proceeding, the AO asked assessee to furnish entry-wise explanation of all bank accounts. In response the assessee filed details. However, the AO noted that there were two entries of deposits in bank account, namely (i) Rs. 5,00,000/- vide cheque No. 34583 on 02.12.2010 and (ii) Rs. 70,000/- vide transfer on 22.03.2011. The AO noted that the assessee claimed to have received the first deposit of Rs. 5,00,000/- from a family member but the name of family member was not mentioned. Further, the second deposit of ₹ 70,000 was claimed to have been received as rent-deposit of house-property but no evidence was Shri Akhilesh Shukla, Bhopal vs. ITO, 1(1), Bhopal. AY 2011-12 furnished. Therefore, the AO made an aggregate addition of Rs. 5,70,000 u/s 69 treating those entries as unexplained. Agreed by addition so made, the assessee carried matter in first appeal but could not succeed. Now the assessee has come in next appeal before us.

Ld. AR for assessee carried us to the Paper-Book Page 4-6 where copies of two letters dated 05.02.2014 and 28.02.2014 filed by assessee to the AO during assessment-proceeding are placed. Ld. AR submitted that it is true that in first letter dated 05.02.2014, the assessee furnished to AO that the receipt of Rs. 5,00,000/- was from a family member and Rs. 70,000/- was a rent-deposit but this submission was made so because the assessee was engaged in the business of civil construction and having immunity from maintaining books of account due to opting for presumption taxation u/s 44AD. Therefore, when the AO show-caused, the assessee could not furnish exact details but filed details on memory basis. However, the assessee continued efforts to collect details from bank and accordingly vide second letter dated 28.02.2014 informed to AO (i) that his submission was on memory basis since the relevant pay-in-slips used for depositing cheques into bank a/c were not available; (ii) that he was trying to ascertain from bank the exact particulars of deposits but it is likely to take some time; and (iii) a further request to AO to grant a fortnight’s time-period for submitting exact details. But, however, the AO passed assessment-order on the very same day of 28.02.2014 ignoring the letter-cum-request of assessee. Ld. AR submitted that the AO passed assessment-order without taking any Shri Akhilesh Shukla, Bhopal vs. ITO, 1(1), Bhopal. AY 2011-12 cognizance of the letter dated 28.02.2014 filed by assessee and just quoting the earlier submission made by assessee in previous letter dated 05.02.2014.

Ld. AR went on submitting that during first-appeal, the assessee was having exact details supported by documents and therefore submitted those documents as additional evidences to CIT(A) in terms of Rule 46A of Income- tax Rules, 1962 whereupon the CIT(A) called a remand-report from AO. But the AO did not file any remand-report. Ultimately, vide Para No. 5.3.1, the CIT(A) admitted additional evidences. However, the CIT(A) did not believe assessee’s submissions and treated them as a cooked-up after-thought story mainly for the reason that the assessee did not submit the facts evidenced by those documents before AO nor in the Statement of Facts/Grounds of Appeal filed before him.

Then, Ld. AR carried us to those very documents filed in the Paper- Book to explain the nature and source of those two entries:

With the support of above documents, Ld. AR re-iterated what was already submitted to CIT(A), that the receipt of Rs. 5,00,000/- is by way of a loan taken from Sangeeta Dewani and the same is proved by all documents.

Ld. DR for revenue dutifully supported the orders of lower-authorities but, however, left the matter to wisdom of Bench while expressing that the issue is petty and the documents are already on record.

We have considered rival submissions of both sides and also perused the orders of lower-authorities as well as the documents filed in the Paper- Book. At first, we find that the assessee filed a letter dated 28.02.2014 to AO requesting for a fortnight’s time to enable him to file details of the impugned transactions. The assessee sought this time for the reason that he was trying to ascertain details from bank. However, the AO passed assessment- order on the very same day of 28.02.2014 without acceding to assessee’s request and even without mentioning assessee’s letter/request in assessment-order. The AO even did not call for details directly from bank which he could very well do under the provisions of the Act. Be that as it may, the assessee has subsequently brought on record all documentary evidences before CIT(A) and also filed in Paper-Book before us. We have already narrated the details of those documents in foregoing paragraph which we do not like to repeat for the sake of brevity. After a careful consideration of those documents as explained by Ld. AR in the open court in the presence of Ld. DR, we find that the assessee has successfully explained the nature and source of the impugned two receipts as required by tax authorities. Needless to mention that these documents are already

Resultantly, this appeal is allowed.