BASAVESWARA RAO VISHNUMOLAKALA,VIJAYAWADA vs. INCOME TAX OFFICER WARD2(4) , VIJAYAWADA
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Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE
Per Shri Duvvuru RL Reddy, Judicial Member :
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/250/2023-24/1056479412(1) dated 25.09.2023, arising out of order passed u/s 143(3) of the Income Tax Act, 1961 (in short ‘Act’) dated 18.12.2019 for the Assessment Year (A.Y.) 2017-18. 2 I.T.A. No.291/Viz/2023, A.Y.2017-18 Busaveswara Rao Vishnumolakala, Vijayawada
Brief facts of the case are that during the post demonetization the assessee had deposited demonetized old currency notes/Specified Bank Notes (SBN) to the tune of cash amounting to Rs. 9,10,000/- in account no. 440504904 held with Indian Bank and Rs. 4,02,500/- held with State Bank of India totalling to Rs.13,12,500/-. During the course of assessment proceedings, the assessee was asked to provide the nature and sources of these cash deposits. In response, the assessee stated that with respect to the amount deposited in Indian Bank of Rs.9,10,000/-, he had sold his Mahindra XUV Xylo Car to Sri Gundabathula Naga Srinivasa Rao for a consideration of Rs. 6,00,000/- in the month of September in cash and for the remaining amount the assessee submitted that, his son, who is a farmer gave him Rs. 2,00,000/- for house furnishing works and remaining amount was his earlier savings. Further, with respect to amount deposited in State Bank of India of Rs. 4,02,500/-, the assessee submitted that, for the construction of second floor of his house, his son gave him the said amount. During the course of assessment proceedings the Assessing Officer(AO) issued notice u/s. 133(6) of the Act to Sri Gunnabattula Naga Srinivasa Rao to substantiate the claim of the assessee. No response was received from Sri Gunnabattula Naga Srinivasa Rao. The AO also issued notice u/s 133(6) of the Act to 3 I.T.A. No.291/Viz/2023, A.Y.2017-18 Busaveswara Rao Vishnumolakala, Vijayawada
Sri V. Bhargava Raghu Rama Krishna, son of the assessee, but no response was received from him also. The AO also verified the denomination particulars from the bank and it was found that all cash deposits made by the assessee were in the form specified bank notes. In view of these facts and not satisfied with the reply of the assessee, the AO passed order u/s 143(3) of the Act, at an assessed income of Rs.13,12,500/- by making an addition of Rs.13,12,500/- under the provisions of Section 69A of the Act.
Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) upheld the addition made by the AO and dismissed the appeal of the assessee as the assessee failed to provide any documentary evidence in support of his claim.
Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :
1) The order of the Learned Commissioner of Income Tax (Appeals) is erroneous both on facts and in law. 2) The Learned Commissioner of Income Tax (Appeals) erred in deciding the appeal ex-parte without adjudicating the grounds agitated by the appellant against the assessment. The Ld CIT(A) ought to have provided further opportunity before deciding the appeal.
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3) The Learned Commissioner of Income Tax (Appeals) erred in confirming the action of the A.O in not accepting cash deposits of Rs. 13,12,500.00 deposited by the appellant. When the assess provided evidence for the sources. 4) The Learned Commissioner of Income Tax (Appeals) ought to have observed that the appellant was in receipt Rs. 6,00,000.00 towards sale of car who also confirmed the sale by providing confirmation letter and received. 5) The Learned Commissioner of Income Tax (Appeals) ought to have observed that the son of the appellant have capacity and sources for providing cash gifts to the appellant. 6) The Learned Commissioner of Income (Appeals) ought to seen the fact that notices under section 133(6) of the I.T.Act have not been served either on the vendee of the car or on the son of the appellant.
The only contention of the Ld.AR is that the order passed Ld.CIT(A), upholding the addition made by the AO is contrary to the facts and circumstances of the case and against law. The Ld.AR further submitted that the notices u/s 133(6) have not been served either on the vendee of the car or on the son of the assessee to prove the sources of the cash deposits made during the demonetization period. The Ld.AR further submitted that the son of the assessee has capacity and sources for providing cash gifts to his father. Hence, the provisions of Section 69A of the Act does not attract. The Ld.AR further submitted that the assessee was not given sufficient opportunity before the Ld.CIT(A) to prove the genuineness of the cash deposits made with credible evidences. She, therefore, pleaded to set aside the order passed by the Ld.CIT(A) and 5 I.T.A. No.291/Viz/2023, A.Y.2017-18 Busaveswara Rao Vishnumolakala, Vijayawada
remit the matter back to the Ld.CIT(A) to afford an opportunity of being heard to the assessee before the Ld.CIT(A) to substantiate his case in the interest of justice.
Per contra, the Ld.DR relied on the order of the Ld.CIT(A), pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee.
We have heard both the parties and perused the material placed on record. It is an undisputed fact that assessee had deposited demonetized old currency notes/Specified Bank Notes (SBN) to the tune of cash amounting to Rs. 9,10,000/- with Indian Bank and Rs. 4,02,500/- with State Bank of India totalling to Rs.13,12,500/-. The only contention of the Ld.AR is that the assessee has enough sources for the cash deposits made during the demonetization period. The Ld.AR further contended that the assessee could not substantiate his claim as the notices were not served on the vendee of the car or on his son to prove the genuineness of his claim. He, therefore, pleaded for one more opportunity of being heard before the Ld.CIT(A) to controvert the findings of the revenue authorities with credible evidences. In view of the foregoing facts and circumstances of the case and in order to meet the principles of natural justice, we are 6 I.T.A. No.291/Viz/2023, A.Y.2017-18 Busaveswara Rao Vishnumolakala, Vijayawada
inclined to remit the matter back to the file of the Ld.CIT(A) with a direction to afford another opportunity of being heard to the assessee to substantiate his case. The assessee is also directed to adhere to the notices issued and served by the revenue authorities and produce supporting documentary evidence to substantiate his claim. Accordingly, the grounds raised by the assessee are allowed for statistical purpose.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 28th February, 2024. (दुव्वूरु आर.एल रेड्डी) (DUVVURU RL REDDY) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 28 .02.2024 L.Rama, SPS
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आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Shri Basaveswara Rao Vishnumolakala 10-127 Cowdary Peta, Kanuru, Vijayawada 2. रधजस्व/The Revenue – The Income Tax Officer, Ward-2(4), Central Revenue Building, Beside PWD Grounds, Vijayawada
The Principal Commissioner of Income Tax, Vijayawada 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam
