HIMANSHU ARORA,DELHI vs. ITO, WARD-58(1), NEW DELHI

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ITA 1814/DEL/2022Status: DisposedITAT Delhi13 September 2023AY 2017-18Bench: SHRI CHALLA NAGENDRA PRASAD (Judicial Member), SHRI M. BALAGANESH (Accountant Member)6 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the actual amount of cash deposited was a factual matter that needed verification from bank statements. Since this verification was not done by the lower authorities, the issue was restored to the AO for fresh adjudication.

What were the facts?

The assessee, a fabric trader, declared a total income of Rs. 9,09,900 for AY 2017-18. The AO alleged cash deposits of Rs. 10,03,11,450 in the assessee's bank accounts, which the assessee disputed, claiming only Rs. 1,23,05,000 was deposited from cash sales.

What were the issues?

Whether the addition made under Section 69A for alleged unexplained cash deposits was justified without proper verification of bank statements.

Which sections of the Income-tax Act were involved?

Section 69A,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘B’: NEW DELHI

For Respondent: Mr. T. James Singson, CIT-DR
Hearing: 21/08/2023Pronounced: 13/09/2023

Himanshu Arora Income Tax Officer H-24, New Govinda Pura Ward-58(1) Delhi-110 051 Vs. PAN-ASCPA 4713A (Appellant) (Respondent) Appellant by None Respondent by Mr. T. James Singson, CIT-DR Date of Hearing 21/08/2023 Date of Pronouncement 13/09/2023 ORDER

PER M. BALAGANESH AM:

1.

1. This appeal of the assessee arises out of the order of the Learned Commissioner of Income Tax (Appeals), National Faceless

Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘Ld. CIT(A)’] in DIN & Order No. ITBA/NFAC/S/250/2022-23/1043458604(1), dated 16/06/2020 against the order passed by Income Tax Officer,

Ward-58(1), Delhi (hereinafter referred to as the ‘Ld. AO’) u/s Himanshu Arora vs. ITO 143(3) of the Income Tax Act,1961 (hereinafter referred to as ‘the

Act’) on 24/12/2019 for the Assessment Year 2017-18.

2.

None appeared on behalf of the assessee. Notice sent to the address mentioned in Form No.36 has been returned with postal

remarks “no such person”. Hence, we proceed to dispose of this appeal on hearing the Ld. DR and based on material available on record.

3.

The only effective issue to be decided in this appeal is as to whether the Ld. CIT(A), NFAC was justified in confirming the addition made u/s 69A of the Act in the sum of Rs.10,03,11,450/-

towards alleged cash deposits in bank account in the facts and circumstances of the instant case.

4.

We have heard the Ld. DR and perused the material available

on record. The assessee is an individual engaged in the business of trading of fabric/textile in the name and style of HDS Enterprise.

The return of income for AY 2017-18 was filed by the assessee on 01/11/2017 declaring total income of Rs.9,09,900/-. During the course of assessment proceedings, the Ld. AO asked the assessee to explain the source of cash deposits made during demonetization period in his bank account as under:- Page 2 of 7 Himanshu Arora vs. ITO (i) Bank Account No.387261006023 with Canara Bank -Rs.9,93,14,450/-

(ii) Bank Account No.135805500988 with ICICI Bank –Rs.63,97,000/- The assessee responded to the said query that the details that are available with the Ld. AO with regard to the cash deposits made, are incorrect and that the assessee has only deposited cash of Rs.1,23,05,000/- in his bank accounts, the details of which are as under:

1.

Canara Bank - Rs. 56,42,000/- 2. ICICI Bank -Rs.66,63,000/- The assessee submitted the month wise cash and credit sale details to the Ld. AO to justify the source of cash deposits. The assessee also submitted that he had made cash sales even before the demonetization period and also during the demonetization period.

The summary of cash sales and credit sales made during the period April, 2016 to March, 2017 are as under:

Month Cash Sales Credit Sales Total April 2016 to March 2017 3,94,59,452 6,77,96,850 10,72,56,301 It was also pointed out cash was deposited by the assessee throughout the year out of the cash collected from the debtors against the sales made. The details of cash deposits made as under:

Himanshu Arora vs. ITO Cash deposited in Bank Account Period of Financial Year 2016-17 From 01/04/2016 to 07/11/2016 Rs.3,54,58,960/- From 08/11/2016 to 31/12/2016 Rs.1,23,05,000/- From 01/01/2017 to 31/03/2017 Rs.80,47,600/- The assessee during the assessment proceedings submitted the date wise details of cash deposited during demonetization period, details of cash sales made during the year including demonetization period, copy of sales and purchase invoices, bank statement etc to substantiate the fact, that cash deposited in the bank accounts during demonetization period represents the cash sales made by the assessee which has already been accounted in the books of accounts of as sale of goods. It was further submitted that the assessee had also submitted an affidavit dated 06/12/2019 before the Ld. AO affirming that cash deposit was only Rs.1,23,05,000/- and not Rs,10,03,11,450/- as alleged by the ld. AO. The assessee also informed to the Ld. AO that summary generated through Income Tax Portal (i.e., Cash Transactions 2016) also shows that cash deposit of Rs.1,23,05,000/- only.

Himanshu Arora vs. ITO 5. The Ld. AO, however, did not heed to the aforesaid contentions of the assessee and proceeded to treat the sum of Rs.10,03,11,540/- as cash deposits made in the bank accounts taxable u/s 69A of the Act.

6.

Before the Ld. CIT(A), the assessee kept on taking time for furnishing various details in form of paper book and ultimately could not make effective representation which enabled the Ld. CIT(A) to confirm the addition made by the Ld. AO. From perusal of the order of the Ld. CIT(A), we find that though effective opportunities were indeed given to the assessee, still the assessee could not utilize the same by furnishing the requisite details in support of his contention. However, we find that whether the assessee has made cash deposits of Rs.1,23,05,000/- or Rs.10,03,11,450/- is a factual matter which could be cross verified from bank statements. Even if the assessee does not co-operate before the Lower Authorities, still this factual matter could be verified by the Revenue by cross verification with the bank statement, which has not been done in the instant case. Hence, in the interest of justice and fair play, we deem it fit and appropriate, to restore this issue to the file of Ld. AO for denovo adjudication in Page 5 of 7 Himanshu Arora vs. ITO accordance with law. The assessee is at liberty to furnish further evidences, if any, in support of his contention. The Ld. AO is also directed to ascertain the fact of actual cash deposited by the assessee from the bank by collecting bank statements thereon. With these directions, the grounds raised by the assessee are allowed for statistical purposes.

7.

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

Order pronounced in the open court on 13th September, 2023.

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