GANTA VENKATA NANDA KISHORE,TANUKU vs. INCOME TAX OFFICER, WARD-1, TANUKU

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/250/2023-24/1055728255(1) dated 04.09.2023, arising out of order passed u/s 147 r.w.s.144 of the Income Tax Act, 1961 (in short ‘Act’) dated 04.09.2023 for the Assessment Year (A.Y.) 2013-14.

Brief facts of the case are that the assessee an individual is working as an employee of M/s V Soma Sundraram Auto Mobiles, dealers in motor cycle etc. at Tanuku. The firm has collected cash from customers as a service to them towards life tax payable. The assessee deposited such collections in the HDFC Bank A/c No.07411930002153, Tanuku and transferred the amounts online through e-seva Kendra to Road Transport Authorities of A.P.State Government. The assessee did not file return of income for the A.Y.2013-14. The Department was in possession of information that the assessee had made cash deposits of Rs.2,06,08,720/- during the F.Y.2012-13 relevant to the A.Y.2013-14. Since the assessee did not file his return of income, the case of the assessee was reopened by issuing notice u/s 148 of the Act. Further, several notices u/s 142(1) of the Act were issued and served on the assessee. In reply, the assessee submitted that as instructed by the firm the cash collected was deposited in the HDFC account and most of all the debits entries in the said bank account have been related to the transfer of amounts online through e- seva Kendra to the Road Transport Authorities of A.P.State Government only. The assessee was asked to furnish any undertaking / affidavit or any sort of evidences which suggest that the cash deposits was done by him on behalf of the employer M/s V.Soma Sundaram Auto Mobiles.

Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) partly allowed the appeal of the assessee, directing the AO to verify the aggregate cash deposits made by the assessee in the HDFC bank savings account for the year under consideration and after verification, whatsoever amount is worked out, compute the income of the assessee @8% of the total cash deposits and restrict the addition to that amount accordingly, while giving effect to the order of the Ld.CIT(A) in the absence of any documentary evidences which suggest that the said cash deposits were belonged to the employer and the same were accounted for into its account.

Aggrieved by the order of the Ld.CIT(A), 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.

Per contra, the Ld.DR argued that the Ld.CIT(A) is justified in directing the AO to estimate the income of the assessee @8% of the cash deposits in the absence of any documentary evidences filed by the assessee. She, therefore, pleaded to uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee.

We have heard both the parties and perused the material available and also the paper book filed by the assessee. It is apparent from records that the assessee had deposited the cash to the tune of Rs.2,06,08,720/- in his bank a/c No.0741193002153, Tanuku, which said to have been Ganta Venkata Nanda Kishore, Tanuku collected from the customers to whom M/s Soma Sundaram Auto Mobiles sold vehicles, where the assessee is working as a clerk. The AO made addition of the same as the assessee failed to offer any explanation with regard to the claim made by the assessee, where as the Ld.CIT(A) observed that the AO is not justified in considering only credit side entries and not considering the debit side entries and hence directed to verify the aggregate cash deposits made by the assessee in the HDFC bank account for the year under consideration and after verification, whatsoever amount is worked out, compute the income of the assessee @8% of the total cash deposits and restrict the addition to that amount accordingly while giving effect to the order of the Ld.CIT(A). We find no infirmity in the order of the Ld.CIT(A) and accordingly we are inclined to remit the matter back to the file of the AO to verify the cash deposits as directed by the Ld.CIT(A) after giving an opportunity of being heard to the assessee and pass order accordingly. The assessee is also directed to adhere to the notices issued and cooperate with the revenue authorities during the proceedings.

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