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Facts
The assessee made significant cash deposits during the demonetization period, which the Assessing Officer added as unexplained cash deposits under Section 68. The CIT(A) sustained this addition, leading the assessee to appeal to the ITAT.
Held
The ITAT found that the CIT(A) did not adequately consider the evidence and submissions provided by the assessee regarding the source of cash deposits, including agricultural income. Therefore, the ITAT remitted the case back to the CIT(A) for fresh adjudication after providing the assessee a proper opportunity to be heard.
Key Issues
The key legal issue is whether the cash deposits made by the assessee during the demonetization period were unexplained, particularly concerning the substantiation of agricultural income as their source.
Sections Cited
Section 68, Section 143(3), Section 250, Section 143(2), Section 142(1), Section 133(6)
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Income Tax Appellate Tribunal, “SMC” BENCH PANAJI
Before: SHRI PAVAN KUMAR GADALE
ORDER
PER PAVAN KUMAR GADALE ,JM:
The assesse has filed the appeal against the order of the NFAC/CIT(A) passed u/sec143(3) and u/sec 250 of the Act. The assesee has raised the grounds of appeal
challenging the order of the CIT(A) sustaining the addition of unexplained cash deposits under section 68 of the Act made by the Assessing officer.
2. The brief facts of the case are that, the assesse has filed the return of income for A.Y.2017-18 on 05.08.2017 disclosing a total income of Rs.11,93,580/- and the case Anand Alias Vishwanath Mamani through legal heir smt Ratna Anand Mamani.. was selected for limited scrutiny under the CASS to verify (i)Large cash deposits during the year compared to returned income(ii)Cash deposit during demonetization period and (iii) Large Agricultural income shown in the return of income. The Assessing Officer (AO) based on the CASS reasons /information found that the assesse has made cash deposits aggregating to (i) Rs.11,37,000/- in Canara Bank saundatti branch and (ii) Rs.19,16,000/- in the Union Bank of India saundatti branch during the demonetization period in F.Y.2016-17 and notice was issued u/sec143(2) and u/sec142(1) of the Act to furnish the details of sources of cash deposits, agricultural income and land holdings and the assessee has partially complied. The A.O. has issued notice U/sec 133(6) of the Act on the two banks and obtained bank statements of the assessee. The A.O has issued a final show cause notice referred at Para 4 of the assessment order and there was no compliance.Whereas the A.O. has dealt on the material available on record and the provisions of section 68 of the Act and made addition of unexplained cash deposits of Rs.28,53,000/- and assessed the total income of Rs.40,46,580/- and passed the order u/sec 143(3) of the Act dated 05.12.2019.
Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO but has sustained the action of the A.O and dismissed Anand Alias Vishwanath Mamani through legal heir smt Ratna Anand Mamani.. the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal.
4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the information of the proceedings. The Ld.AR mentioned that the CIT(A) has not dealt on the details, documents and evidences filed in the appellate proceedings to substantiate the sale of agricultural crops and cash deposits in bank accounts and prayed for allowing the appeal. The Ld.AR supported the submissions with the factual paper book. Per Contra, the Ld.DR supported the order of the CIT(A).
Heard the rival submissions and perused the material on record. The sole crux of the disputed issue envisaged by the Ld.AR that the CIT(A) has erred in sustaining the addition on unexplained cash deposits made by the Assessing Officer without providing proper opportunity and overlooking the facts and material evidences. The assesse has filed the details before the lower authorities and the CIT(A) has not considered the documents and information supporting the claim of the assesse. The Ld.AR highlighted on the submissions made in the proceedings at page 27 to 38 of the paper book to substantiate the earning of agriculture income, cash with drawls, opening balance to substantiate the cash deposits in the bank Anand Alias Vishwanath Mamani through legal heir smt Ratna Anand Mamani.. accounts and the assesee has a good case on merits. Prima-facie, the CIT(A) has dealt on the findings of the AO and has not considered the submissions/evidences of the assesse filed in the proceedings referred and has not allowed the grounds of appeal
. Therefore, considering the facts, submissions and principles of natural justice, shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh and the assesse should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of the appeal. And the grounds of appeal of the assessee are allowed for statistical purposes.