HABIBBHAI ADAMBHAI MANIYA,NADIAD vs. INCOME TAX OFFICER WARD 1, NADIAD

O R D E R आदेश आदेश PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: Present appeal has been filed by the assessee against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi [hereinafter referred to as "CIT(A)" for short] dated 13.12.2023 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for the Assessment Year (AY) 2017-18. 2. The grounds raised by the assessee are as follows:-

3. The Ld lower authorities have erred on facts and law in presuming the cash deposit of Rs.48,66,000/-in current account No. 903002201003984 and Rs. 80000/- in Department of Post as per provisions of section 69A of the Income tax Act and added to the total income.

5. The Appellant craves leave to add/amend /alter any of the grounds of appeal before or at the time of hearing.

4. The ld. CIT(A), we have noted, has reiterated the order of the Assessing Officer in the absence of any participation on behalf of the ld. Counsel for the assessee before him in appellate proceedings. The solitary contention of the ld. Counsel for the assessee before us was that the order passed by the ld. CIT(A) was grossly against the provisions of law and in contravention to the principles of natural justice. He pointed out that, during the course of appellate proceedings, the assessee had participated seeking adjournments on several occasions which was also granted by the ld. CIT(A), and it was only 3 Habibbhai Adambhai Maniya Vs. ITO AY : 2017-18 on the last occasion when none appeared on behalf of the assessee that the ld. CIT(A) went forward and decided the appeal against the assessee. He contended that the ld. CIT(A) reiterated the order of the Assessing Officer without going into the facts of the case and the material before him which was placed before the Assessing Officer during assessment proceedings by the assessee itself. He pointed out that the Assessing Officer had made addition of the cash found deposited in the bank account of the assessee in the absence of any satisfactory explanation regarding the source of the same. Ld. Counsel for the assessee pointed out that, during the assessment proceedings, the assessee had stated that he was carrying out business of tobacco products and confectionery of namkeen and other items since very long in his proprietorship concern ‘Vikas Trading’. That, the cash deposited was on account of this business carried out by him. The Tax Audit Report of the assessee, duly certified by the Chartered Accountant, was also before the Assessing Officer along with the audited financial results of the assessee. He pointed out that all these facts are noted by the Assessing Officer in his assessment order in page No. 2 itself. He further pointed out that, during the assessment proceedings, the Assessing Officer had exercised his powers of issuing notices and acquired copy of bank account statements of the assessee from the respective bank, which revealed the fact of cash deposited in the bank account. He contended that these very bank accounts also revealed that all the cash deposited was used to make payments to the suppliers of material in which he traded. Ld. Counsel for the assessee contended that all these facts, though present before the ld. CIT(A), he completely ignored all of them and went on to reiterate the order of the Assessing Officer. Ld. Counsel for the assessee also contended that the audited accounts of the assessee coupled with the bank statements procured by the Assessing Officer which form part of the audited accounts clearly revealed that all cash deposits in the bank account 4 Habibbhai Adambhai Maniya Vs. ITO AY : 2017-18 were attributable to the business of the assessee and utilized for the same purpose alone by the assessee. That, there was no question of treating the cash so deposited as unexplained and adding the same to the income of the assessee. He contended that the assessee is in possession of all confirmation and evidences of the source of cash deposits and is willing to now place them before the Revenue Authorities for verification. He pleaded that, therefore, the mater may be restored back to the Assessing Officer for verifying the contention of the assessee.

6. We have heard the contentions of both the parties and we are in agreement with the ld. Counsel for the assessee that it is a fit case for reconsideration of the issue raised in appeal by the Assessing Officer afresh. The ld. Counsel for the assessee has made out a fairly good case before us that the ld. CIT(A) has reiterated the order of the Assessing Officer without considering all the facts and material before him. As rightly pointed out by the ld. Counsel for the assessee, the ld. CIT(A) ought to have considered the audited financial results of the assessee, the Tax Audit Report of the assessee and the copy of bank statements collected by the Assessing Officer during assessment proceedings for adjudicating the issue of cash found deposited in the bank account of the assessee, even if none appeared on behalf of the assessee. Having failed to do so and the assessee having now filed before us all evidences in support of his claim of the cash deposited in the bank account being from explained sources, it is in the interest of justice that the issue be reconsidered by the Revenue Authorities after due verification of all the claims made by the assessee. We, therefore, restore the issue back to the Assessing Officer to decide the issue of cash deposited in the bank account of 5 Habibbhai Adambhai Maniya Vs. ITO AY : 2017-18 the assessee afresh after giving due opportunity of hearing to the assessee and after considering all explanation and evidences filed by the assessee in this regard. The grounds raised by the assessee are accordingly allowed for statistical purposes.