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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
अपीलधथी की ओर से/ Appellant by : Shri G.V.N.Hari, AR प्रत्यधथी की ओर से / Respondent by : Dr.Aparna Villuri, DR सुनवधई की तधरीख / Date of Hearing : 15.04.2024 घोर्णध की तधरीख/Date of Pronouncement : 08.05.2024 आदेश /O R D E R
Per Shri Duvvuru RL Reddy, Judicial Member :
1. This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No. ITBA/NFAC/S/250/2023-24/1059075419(1) dated 26.12.2023, arising out of order passed u/s 143(3) of the Income Tax Act, 1961 (in short ‘Act’) dated 21.12.2019 for the Assessment Year (A.Y.) 2017-18.
Korada Ramesh Naidu, Visakhapatnam
Brief facts of the case are that the assessee, an individual engaged in IMFL trade has filed his return of income for the A.Y.2017-18 on 26.03.2018 by declaring income of Rs.15,83,990/-. The case was selected for limited scrutiny under CASS to examine large cash deposits in bank account(s) during the year. Accordingly, statutory notices u/s 143(2) and 142(1) were issued and served on the assessee. During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee had made cash deposits of Rs.85,41,000/-, out of which, Rs.51,15,000/- was deposited in SBNs in his State Bank of India account No.350612422699, Vemulavalasa, Anandapuram. The AO observed from the cash book submitted by the assessee that there is cash in hand of Rs.31,39,877/- and hence accepted the cash deposits made to the tune of Rs.8,00,000/- on 11.11.2016 in SBNs and treated the balance of Rs.43,15,000/- as unexplained money u/s.69A of the Income tax Act, 1961. The AO completed the assessment u/s 143(3) and passed order dated 21.12.2019, assessing the total income of the assessee at Rs.58,98,990/-
On being aggrieved, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) upheld the addition of Rs.43,15,000/- made by the AO and dismissed the appeal of the assessee.
Korada Ramesh Naidu, Visakhapatnam
On being aggrieved, the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :
The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.
2. The order of the learned Commissioner of Income Tax (Appeals) ought to have granted sufficient opportunity before deciding the appeal ex-parte. 3. Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.43,15,000 made by the assessing officer u/s 69A of the towards unexplained cash deposits in the bank account of the appellant. 4. Any other grounds may be urged at the time of hearing. 5. The only contention of the Ld.AR is that the Ld.AO is not justified in making addition of Rs.43,15,000/- which was upheld by the Ld.CIT(A) without giving sufficient opportunity before passing the order ex-parte. The Ld.AR submitted that the assessee’s father Sri. Korada Sadhu Jagannadha Rao was also doing the liquor business separately, under a different license. Unfortunately, the assessee’s father passed away on 18.05.2016. The assessee’s father’s license was transferred to the name of his mother, Smt. K Vijaya Lak shmi in the month of July 2016. However, due to the shock and depression that was faced by his mother, she could not open a new bank account to run the business, and requested her son, the assessee, to deposit the cash into his account and transfer the same to Korada Ramesh Naidu, Visakhapatnam APBCL for making payments towards purchases during the demonetization period. As on 08.11.2016, the date of demonetization, the assessee had cash in hand of Rs 31,39,877/- and his mother had cash in hand of Rs. 26,86,500/- which was given to the assessee. During the assessment proceedings, the assessee submitted all the data as directed by the Ld.AO, including ledger accounts, cash book etc., and also the financial statements, cash book and confirmation were provided by the assessee’s mother as regards the source of deposits into the assessee’s bank account. However, the Ld.AO accepted the cash available only to the extent of Rs 8,00,000/- which was deposited on 11.11.2016 and added back the remaining amount of Rs 43,15,000/- as unexplained money under Section 69A stating that the assessee has not offered any acceptable and cogent explanation regarding the source, while also stating that the assessee accepted SBN for sales made during demonetization period. The Ld.AR further submitted that the assessee has sources for the cash deposits made with credible material evidences. The Ld.AR, therefore pleaded that the assessee may be given an opportunity of being heard before the Ld.CIT(A) to substantiate his claim in order to meet the ends of justice.
Korada Ramesh Naidu, Visakhapatnam
Per contra, the Ld.DR relied on the order passed by the Ld.CIT(A) and pleaded to uphold the order passed and dismiss the appeal of the assessee.
We have heard both the parties and perused the material available on record. It is evident that the assessee had made cash deposits of Rs.85,41,000/-, out of which, Rs.51,15,000/- was deposited in SBNs in his State Bank of India account No.350612422699, Vemulavalasa, Anandapuram. The assessee filed paper book before us and furnished the copy of bank statement, copy of cash book etc. and contended that the assessee was not given sufficient opportunity for explaining the sources for the cash deposits made with evidences and pleaded for an opportunity of being heard before the Ld.CIT(A). Keeping in view the foregoing facts and circumstances of the case and in order to meet the principles of natural justice, we are inclined to remit the matter back to the file of the Ld.CIT(A) with a direction to afford an opportunity of being heard to the assessee for substantiating the sources for the cash deposits made with material evidences. The assessee is also directed to adhere to the notices issued by the revenue authorities and cooperate with the department during the proceedings. Accordingly, the grounds raised by the assessee are allowed for statistical purpose.
Korada Ramesh Naidu, Visakhapatnam
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 8th May, 2024.
Sd/- Sd/- (एस बालाकृष्णन) (दुव्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER Dated : 08.05.2024 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Shri Korada Ramesh Naidu, D.No.2-120, Vemula Valasa, Anandapuram Mandalam, Visakhapatnam 2. रधजस्व/The Revenue – The Asst.Commissioner of Income, Circle-2(1), Income Tax Office, Infinity Towers, Sankaramatam Road, Visakhapatnam 3. The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam