PANKAJ BALASAHEB KOKATE,AHMEDNAGAR vs. THE INCOME TAX OFFICER, WARD-1, AHMEDNAGAR

This appeal filed by the assessee pertaining to the Assessment Year (in short "AY") 2017-18 is directed against the order passed u/s.250 of the Income Tax Act, 1961 [in short “the Act"] by ld. Commissioner of Income-tax (Appeals)/Addl/JCIT(A) [in short ld."CIT(A)"] dated 18.06.2024 arising out of the Intimation order passed u/s.144 of the Act dated 04.12.2019.

When the case was called on, none appeared on behalf of the assessee. The notice for hearing was issued online on 16.10.2024. However, considering the smallness of issue and ld. CIT(A) having not passed a speaking order, I decide to adjudicate the appeal with the assistance of ld. Departmental representative and available record.

Grievance of the assessee is three fold, firstly against the addition for unexplained cash deposit of Rs.2,97,500/- u/s.69A of the Act; secondly estimation of the profit of Rs.4,72,500/- on the gross receipts during the year and thirdly since no notices were served by the ld. CIT(A) assessee did not get fair opportunity and therefore prayed that the matter may be restored to the file of AO for fresh adjudication.

Learned DR vehemently argued supporting the order of the lower authorities.

I have heard the ld. DR and perused the record placed before me. I note that the assessee is an individual and based on the information about deposit of cash during the demonetisation period, i.e., 09.11.2016 to 30.12.2016 amounting to Rs.2,97,500/- the ld.AO carried out the assessment proceedings by way of issuance of notice u/s.142(1) of the Act but there was no compliance. Thereafter, ld. Assessing Officer (AO) took the information from the Indian Overseas Bank by issuing notice u/s.133(6) of the Act. On receiving the information, ld.AO finally concluded the assessment, firstly making addition u/s.69A of the Act for unexplained cash deposit of Rs.2,97,500/- during the demonetisation period in old currency. Secondly, ld.AO took the credits in the Bank amounting to Rs.62,03,760/- and after reducing Rs.2,97,500/-,i.e., the cash deposited during the demonetisation period, ld.AO considered the remaining amount of Rs.59,06,260/- as Gross Turnover and applied 8% Net Profit rate provided under the Presumptive Taxation Scheme u/s.44AD of the Act and computed the business income at Rs.4,72,500/-. Income assessed at Rs.7,70,000/-.

Further I find that when the assessee challenged the impugned addition before the ld.CIT(A), in the statement of facts, he has stated that the assessee is engaged in the business of distributorship of Mobile recharge of IDEA and earned fixed commission on the turnover. It is also stated that the gross commission is Rs.2,45,484/- reflected in Form No.26AS. Assessee also furnished the Income and Expenditure account showing that against the gross commission of Rs.2,45,484/- assessee incurred expenditure of Rs.90,000/- and the net profit is only Rs.1,55,484/-.

So far as the source of cash deposit of Rs.2,97,500/-, it has been submitted that they were on account of (a) savings of mother Smt.Kantabai Balasaheb Kokate-Rs.1,30,500/-; (b) savings of wife Smt. Kalpana Pankaj Kokate –Rs.1,25,000/-; and own savings of Rs.42,000/-.

Further, I observe that eventhough this information was available with the ld. CIT(A) he dismissed the assessee’s appeal for non-appearance on the dates of hearing. I also observe that the assessee did not appear before the ld.AO even after being provided sufficient opportunity.

In the given facts and circumstances of the case, mainly the claim of the assessee that income from commission is appearing in Form No.26AS and other details furnished in the statements of fact, I deem it appropriate to set aside the finding of ld. CIT(A) and restore the issue on merits to the file of ld. jurisdictional AO for denovo adjudication for which assessee should be given reasonable opportunity of being heard and then decide in accordance with law along with considering the CBDT instruction No.03/2017, dated 21.02.2017. Assessee is also directed to remain vigilant in the proceeding before ld. AO and should refrain from taking unnecessary adjournments unless otherwise required for reasonable cause. Grounds of appeal raised by the assessee on merits are allowed for statistical purposes.

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