VERMA JEWELLERS,SOLAN vs. DCIT/ACIT, CIRCLE, PARWANOO

PDF · subscribers
ITA 813/CHANDI/2023Status: DisposedITAT Chandigarh27 August 2024AY 2017-18Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)4 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) had violated the principles of natural justice by not considering the assessee's written submissions before passing the impugned order. Therefore, the order was set aside.

What were the facts?

The assessee, Verma Jewellers, filed an appeal against the CIT(A)'s order which confirmed an addition of Rs. 73,58,437 made by the AO under Section 68 for unexplained cash deposits during demonetization. The assessee contended that these deposits were out of sale proceeds evidenced by sale bills and stock registers.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal ex-parte without considering the assessee's written submissions, thereby violating principles of natural justice. Whether the addition under Section 68 for demonetization deposits was justified without rejecting the assessee's books of accounts.

Which sections of the Income-tax Act were involved?

Section 68,Section 253,Section 250,Section 271AAC,Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

आयकर अपीलीय अिधकरण,च"ीगढ़ "ायपीठ “बी” , च"ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE "ी िव"म िसंह यादव, लेखा सद" एवं "ी परेश म. जोशी, "ाियक सद" BEFORE: SHRI. VIKRAM SINGH YADAV, AM & SHRI. PARESH M. JOSHI, JM आयकर अपील सं./ िनधा"रण वष" / Assessment Year : 2017-18 Verma Jewellers बनाम The DCIT / ACIT Chowk Bazar, Solan (H.P) Circle, Parwanoo (H.P) "ायी लेखा सं./PAN NO: AAGFV3761R अपीलाथ"/Appellant ""थ"/Respondent िनधा"रती की ओर से/Assessee by : Shri Jaspal Sharma, Advocate राज" की ओर से/ Revenue by : Shri Vivek Vardhan, JCIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 14/08/2024 उदघोषणा की तारीख/Date of Pronouncement : 27/08/2024 आदेश/Order PER PARESH M. JOSHI, J.M. :

This is an appeal filed by the Assessee Verma Jewellers, Solan, H.P for the A.Y. 2017-18. The appeal is filed under section 253 of the Income Tax Act, 1961 as and by way of second appeal under the Act. The assessee is aggrieved by order dt. 25/10/2023 passed in first appeal bearing No. ITBA/NFAC/S/250/2023- 24/1057320237(1) of Ld. CIT(A) under section 250 of the Act, which is hereinafter referred to as the “impugned order”. Factual Matrix 2. The assessee is a partnership firm engaged in the business of retail trade of jewellery. Return declaring an income of Rs. 1,48,42,640/- was filed by the assessee on 28/10/2017. The assessment under section 143 was completed by AO at an income of Rs. 2201077. Following additions were made in income of assessee:-

That Addition of Rs.7358437/- under section 68 of the Act by way of unexplained cash deposit made in the bank account of the assessee during demonetization period. The learned AO while making the above addition failed to appreciate the fact that the cash deposit during demonetization period was out of the sale proceeds of Jewellery effected at his showroom duly evidenced by sale bills and day to day stock register supporting the same. The AO did not find any fault in the books of the assessee in as much as the same were duly been audited and all the purchase and sale bills were properly vouched. The addition of Rs.73,58,437/- has been made purely on surmises and conjectures without bringing any corroborative evidence to substantiate the same. The amount of Rs.73,58,437/- represents the sale proceeds of the assessee of his goods and have resulted in the creation of Gross Profit. As such the addition is uncalled for as it amounts to double taxation and which is not permissible under the law. Moreover addition under section 68 cannot be made without rejecting the books of accounts of the appellant and specifically pointing out the defects- in the books of accounts regularly maintained by the assessee.

3.

That the assessee being aggrieved by the aforesaid which was done by assessment order No. ITBA/AST/S/143(3)/2019-20/1023380619(1) dt. 29/12/2019 filed an appeal before the Ld. CIT(A) who has dismissed the first appeal by the impugned order.

4.

The Assessee being aggrieved by the impugned order has raised following grounds of appeal before us in Form No. 36 which is form of appeal before this Tribunal:

1. On the facts and circumstances of the case, the Ld. CIT(Appeals) NFAC has erred in having disposed off the assessee's appeal ex-parte confirming the order of the Ld.AO without having considered the assessee's written submissions dated 09.09.2023 uploaded on portal on same date and further uploaded on 20.10.2023.

2.

The Ld.CIT(Appeals) has gravelly erred in having held in para 6 that the assessee has not filed its reply willfully where as it has clearly been mentioned in last column of para 5 at page 9 of impugned order that reply was filed by the appellant. Therefore the impugned order is arbitrary, against facts as well as against principle of natural justice and therefore, is liable to be quashed. 3. On the facts and circumstances of the case the Ld. CIT(Appeals) NFAC has erred in having sustained the addition of Rs.73,58,433/- made by the AO u/s 68 of the Income Tax Act, on account of unexplained cash deposits in bank during the demonetization period, arbitrarily without considering the written submissions of assessee and facts on record. 4. On the facts and circumstances of the case the Ld. CIT(Appeals) NFAC has further erred in having held cash deposited in bank during demonetization period in Old SBNs were no more legal tender as per the Instructions of the Government of India and thus confirmed the action of the AO in having made an addition of Rs.73,58,433/-. 5. On the facts and circumstances of the case the Ld.CIT(Appeals)NFAC has erred in having confirmed the action of the Id.AO in holding that the addition u/s 69A is covered u/s 115BBE of the Income Tax Act without having considered the additional ground and submissions in this regard uploaded on portal on 20.10.2023. 6. On the facts and circumstances of the case the Ld.CIT(Appeals)NFAC has erred in having confirmed the action of the Ld.AO in having initiated penalty proceedings u/s 271AAC of the Income Tax Act. The assessee craves leave to add to alter or amend the above grounds of appeal before the same is heard or disposed of.

Record of Hearing 5. The hearing in the matter took place before us on 04/08/2024 when both the parties appeared before us. Both the parties were treated equally and were given equal opportunity of being heard in person.

5.1 The Ld. AR at the outset contended that the impugned order of the Ld. CIT(A) is in violation of the principles of natural justice in as much as written submission / contentions of the assessee dated 09/09/2023 uploaded on portal on same date and once again uploaded on 20/10/2023 was just not considered. The Ld. CIT(A) ought not to have passed the impugned order without considering written submission on record.

6.

Per contra the Ld. AR fairly conceded that impugned order is in violation of the principle of natural justice and should be set aside and matter be relegated back to the file of Ld. CIT(A) with direction to consider the written submission of assessee dated 09/09/2023. Findings and Conclusions 7. In the premises, after perusing the records of the case we observe that written submissions dt. 09/09/2023 ought to have been considered by Ld. CIT(A) before passing the impugned order. Non consideration of same has violated principles of natural justice. Order 8. In the circumstances, we set aside the impugned order and remand the matter back to the file of CIT(A) with a direction to pass an order afresh on denovo basis after considering written submission of assessee dt. 09/09/2023. The assessee to be afforded an opportunity of hearing too.

9.

The Ld. CIT(A) to pass fresh order as soon as possible preferably within six months from date of receipt of this order.

10.

In result appeal of the assessee is allowed as and by way of remand.

11.

Appeal is allowed for statistical purposes.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →