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Income Tax Appellate Tribunal, PANAJI BENCH :: PANAJI
Before: SHRI INTURI RAMA RAO & SHRI PARTHA SARATHI CHAUDHURY
S.A.No.04/PAN/2023 And (A.Y. 2017-18) Yamanappa Bagayi, vs ITO, Ward-1, 303, Lolasur, Taluka - Gokak, Gokak. Dist. Belgaum, Karnataka. PAN: ABVPY 3185 G Appellant Respondent Assessee by : Shri Saidappa Gadadi, AR Revenue by : Shri N. Shrikanth, DR Date of hearing : 18/08/2023 Date of pronouncement : 25/08/2023 O R D E R
Per PARTHA SARATHI CHAUDHURY, JM:
The Stay Application (SA) and the appeal preferred by the assessee emanates from the order of National Faceless Appeal Centre [NFAC], Delhi, dated 23.11.2022 for A.Y.2017-18 as per the grounds of appeal on record.
Regarding stay application, no arguments were put-forth by the ld.AR at the time of hearing, meaning thereby, assessee is not interested in prosecuting his matter, therefore, SA is dismissed devoid of merits.
S.A.No. 04/PAN/2023 & Bagai Kallappa Yamanappa 3. Now, we shall adjudicate the appeal of the assessee.
Brief facts of the case are that assessee is an individual engaged in the business of poultry farming, filed his return of income on 30/10/2017, declaring total income of Rs.9,49,450/-. The case of the assessee has been selected for scrutiny under CASS, and on verification of information received in AIMS, it was noticed that assessee had deposited an amount of Rs.49,85,500/- in HDFC Bank and Rs.4,40,500/- in Axis Bank, totaling to Rs.54,26,000/- in cash during the period of demonetization. In response to the notice u/sec. 142(1), the assessee submitted cash book, ledger, bank book, purchase & sales bills, bills & vouchers etc. The assessee explained that the said deposits are out of the sale proceeds. The AO did not accept the assessee’s contention and added the amount of Rs.54,26,000/- to the total income of the assessee as unexplained money u/sec. 69A r.w.s. 115BBE of the Act. The AO further, on perusal of the books of account produced by the assessee, held that assessee had made payments in cash towards purchases in contravention to the provisions of sec.40A(3) and added back an amount of Rs.93,29,812/- to the total income of the assessee.
Aggrieved by the order of the AO, assessee filed appeal before the NFAC. The NFAC during appellate proceedings, has observed that assessee did not produce the details of customers from whom cash collected in Specified Bank Notes (SBNs), and held that assessee was S.A.No. 04/PAN/2023 & Bagai Kallappa Yamanappa not permitted to accept SBNs after 08/11/2016 and the closing balance of cash as per books as on 08/11/2016 was not sufficient to cover the deposits of Rs.54,26,000/- in SBNs during the demonetization period. Therefore, NFAC confirmed the order of the AO. Even before us, assessee could not bring any evidences to substantiate his claim for justifying depositing the cash in his banks accounts during demonetization period. Furthermore, even no details of the customers from whom the cash collections in SBNs have been made during the demonetization were also filed before the Tribunal. Therefore, we do not find any infirmity with the order of the NFAC, the same is hereby upheld.
The next issue with regard to the addition of Rs. 93,29,812/- made in violation of the provisions of sec.40A(3) of the Act. In the assessment order itself, the AO has given specific finding about the verification, he has conducted perusing the books of account produced during the assessment proceedings, whereby it was observed that assessee had made payments in cash towards purchases in contravention to the provisions of sec.40A(3) of the Act. The AO also reproduced the cash payments date-wise made to the different parties. Before the NFAC, no documentary evidences were filed for verification of the claim of the assessee that they have not violated the provisions of sec.40A(3) of the Act. The assessee had simply filed the written submissions reiterating his earlier submissions made before
S.A.No. 04/PAN/2023 & Bagai Kallappa Yamanappa the AO. At the time of hearing before us also, ld.AR claimed that the payments were covered under the exception of Rule 6DD of the Income Tax Rules, 1962, however, no documentary evidences/ materials were furnished before the Tribunal substantiating and corroborating the claim of the assessee that they are covered under the exception of Rule 6DD of the Income Tax Rules. In view thereof, there is no need of interference with the findings of the NFAC which is upheld. Grounds of appeal stands dismissed.
In the result, Stay Application and appeal filed by the assessee are dismissed.
Order pronounced in open Court on 25th August, 2023.