SH. KAPIL GUPTA,PATIALA vs. THE DY.C.I.T., C.C., PATIALA

आदेश/ORDER

PER A.D.JAIN, VICE PRESIDENT

This is assessee's appeal for assessment year 2018-19 against the order dated 05.09.2023 passed by the ld. CIT(A)- 5, Ludhiana. The following grounds have been taken : 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in passing an ex-parte order dismissing the appeal in limine without discussion on merits which is against the Principles of Natural Justice and as such the order passed is arbitrary and unjustified. 2. Without prejudice to the above, the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the order

ITA 557/CHD/2023 A.Y. 2018-19 2 of the Assessing Officer treating excess cash of Rs.9,50,000/- surrendered during the course of survey to be deemed income u/s 69 A of the Act as against business income which is arbitrary and unjustified. 3. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the order of the Assessing Officer treating expenses incurred on business building renovation of Rs.7,00,000/- surrendered during the course of survey to be deemed income u/s 69 of the Act as against business income which is arbitrary and unjustified. 4. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the order of the Assessing Officer treating business advances made of Rs.8,00,000/- surrendered during the course of survey to be deemed income u/s 69 of the Act as against business income which is arbitrary and unjustified. 5. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the order of the Assessing Officer treating investment in unexplained stock of Rs.75,70,000/-surrendered during the course of survey to be deemed income u/s 69 of the Act as against business income which is arbitrary and unjustified. 6. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the rejection of books applying the provisions of Section 145(3) which is arbitrary and unjustified. 7. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the net profit at Rs.36,30,191/- as computed by the assessing officer by applying average net profit rate of 4.25% as against Rs.15,23,708/- declared by the assessee resulting in an addition of Rs.21,06,483/- which is arbitrary and unjustified. 8. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the addition of Rs. 1,04,570/- made on account disallowance of interest expenditure which is arbitrary and unjustified. 9. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 10.That the order of the Ld. CIT(A) is erroneous, arbitrary, opposed to the facts of the case and thus untenable.

ITA 557/CHD/2023 A.Y. 2018-19 3

proprietor of M/s Gupta and Sons engaged in the business of

trading in school textbooks and stationery. A survey operation

u/s 133A of the Income Tax Act, 1961 was conducted at business

premises of the assessee on 11.04.2017. During the course of

survey, a total cash of Rs.9,95,837/- was found. However, as per

the trial balance as on the date of survey, the cash in hand

shown in the books was found to be Rs.45,837/-. Accordingly,

the assessee was given Show Cause Notice on 11.02.2021. In

reply, the assessee contended that the source of excess cash

found during the survey was from business receipt. The AO,

being not satisfied with the reply of the assessee, made addition

of Rs.9,50,000/-.

building expenses amounting to Rs.1,84,000/-only. The

expenses incurred towards interior decoration, false ceiling,

flooring etc. were not booked by the assessee. In order to explain

the said discrepancies, the assessee voluntarily disclosed

Rs.7,00,000/-. The AO was not satisfied with the explanation of

the assessee and made addition of Rs.7,00,000/-. The Assessing

Officer also made addition of Rs.8,00,000/-on account of

unexplained advances, Rs.75,50,000/- on account of unexplained

stock, Rs.21,06,483/- on account of net profit, Rs.1,04,570/- on

account of interest expenditure. Accordingly, the Assessing

ITA 557/CHD/2023 A.Y. 2018-19 4

Officer made total additions/disallowances amounting to

Rs.1,22,11,053/-, against which the assessee went in appeal

before the ld. CIT(A).

hearing and various notices were issued to the assessee i.e., on

24.05.2022, 20.06.2022, 29.08.2022, 20.09.2022, 10.10.2022,

19.10.2022, 08.02.2023, 12.05.2023 and 04.09.2023, out of

which only for one hearing i.e., on 20.09.2022, a request for

adjournment was made. On other dates, the assessee did not

turn up for hearing nor made any request for adjournment was

made. Accordingly, the ld. CIT(A) dismissed the appeal of the

assessee confirming the additions and disallowances made by the

Assessing Officer.

material available on record. The notices were issued on the

ITBA Portal but the assessee states that he did not receive any

notice of hearing. Further, there is nothing on record to prove

that the assessee has been served notice of hearing to furnish the

relevant information/explanations etc. Therefore, in the interest

of justice, the file is restored to the file of ld. CIT(A) to decide the

matter afresh in accordance with law after giving reasonable

ITA 557/CHD/2023 A.Y. 2018-19 5

opportunity of being heard to the assessee. The assessee, no

doubt, shall cooperate in the fresh proceedings before the CIT(A).

statistical purposes.

Order pronounced in the Open Court on 21.02.2024.

Sd/- Sd/-

(VIKRAM SINGH YADAV) (A.D.JAIN ) ACCOUNTANTMEMBER VICE PRESIDENT “Poonam”

आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. .��यथ�/ The Respondent 3. आयकर आयु�/ CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar