SRI JAGDISH PRASAD CHOUDHARY,KOLKATA vs. I.T.O., WARD - 36(7),, KOLKATA

The only issue raised by the assessee is against the order of Ld. CIT(A) against the ex parte order passed by the Ld. CIT(A) upholding the order of AO wherein various additions were made in respect of (i) deposit of cash during demonetization period of Rs.23,17,200/-, (ii) estimated addition @ 8% of Rs.48,13,522/- u/s. 44AD , (iii) addition of Rs.47,96,863/- on peak credit basis and (iv) making addition of Rs.94,009/- on the basis of Form 26AS.

Facts in brief are that the assessee has deposited cash in his bank account during demonetization period and accordingly, a notice u/s. 142(1) of the Act was issued on 13.03.2018 wherein the assessee was called upon to furnish his return of income on or before 31.03.2018. The assessee, however, failed to furnish the said return of income in response to notice u/s. 142(1). Accordingly, proceedings u/s. 144 of the Act were initiated.

The Ld. CIT(A) passed the ex parte order when the assessee failed to appear on the various dates of hearing fixed by the appellate authority.

After hearing the rival contentions and perusing the material on record, we find that though the assessee is non-cooperative before the AO as well as before the Ld. CIT(A) and even the decision of the Ld. CIT(A) was ex parte, we observe from the assessment order that some same addition has been made multiple times leading to assessing the same income more than two times. We note that the assessee has deposited cash during demonetization period which was not explained during the assessment proceedings and added the same to the income of the assessee. Then the income was estimated @ 8% on the total credits in the bank account of the assessee amounting to Rs.6,01,69,030/- which is over and above the cash deposits during demonetization period by following the provisions of sec.44AD of the Act @ 8% but again the AO computed the peak credit in the various bank accounts of the assessee and added s sum of Rs.47,96,863/- to the income of the assessee. We also note that the addition of Rs.94,009/- was also made on the basis of Form 26AS. In our opinion, the addition of 8% on the total credits in the bank account by invoking sec. 44AD and Sri Jagdish Prasad Choudhury AY 2017-18 addition on the basis of peak credit are two additions in respect of the same income which is incorrect and cannot be sustained. We note that the in the subsequent two assessment years 2018-19 and /AY 2019-20 the N.P rate are 3.03% and 4.55% respectively. Therefore the estimation of income at 8% is arbitrary and without any basis. Similarly once the estimation of income is based upon the percentage application on total credits in the bank accounts, then no other addition shall be required to be made. With these observations , we deem it appropriate and proper to restore the issue to the file of the AO to decide the issue de novo after taking into consideration the following factors i.e. the books of account of the assessee and other evidences which the assessee may furnish before the AO. Needless to say that assessee should be provided reasonable opportunity of being heard before framing the assessment afresh in accordance with law.

In the result, appeal of the assessee is allowed for statistical purposes.