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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
This appeal has been filed by the assessee against the order of the Ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 20.02.2023 in respect of Assessment Year: 2017-18.
“1. That the order of the Ld. CIT(A), National Faceless Appeal Centre, Delhi is against law and facts and circumstances of the case.
That the Ld. CIT(A) gravely erred in confirming the addition of Rs. 3,08,500/- being the amount deposited in bank on 02.12.2016 and 03.12.2016 out of the total SBN Rs. 71,08,500/- deposited in the bank during demonetization period.
2.1 That the Ld. CIT(A) ought to have appreciated the fact that the source of the sum of Rs. 3,08,500/- stood explained in presence of the cash book of business and the AO has accepted the books of account maintained in the normal course of business and not doubted the source of amount deposited during the demonetization period.
That the appellant craves leave to add or amend any of the ground of appeal before the appeal is finally heard or disposed off.”
3. An adjournment application filed by the appellant at the time of hearing dated 06.05.2023 is rejected for insufficient reasons and the ld. counsel Mr. Anil Miglani was directed to present the appeal for the assessee on merits.
4. At the outset, the Ld. Counsel submitted that the Ld. CIT(A) passed the order ex parte qua the assess and confirmed the said assessment order without adjudicating the appeal on merits and addressing on the grievances of the assesse. He pleaded that the matter may be restored to the CIT(A) with the direction to adjudicate the appeal on merits by banks account. The relevant note is filed by the assessee explaining reasons for current cash in hand out of current period’s sales which has not been appreciated by the authorities below is extracted here under:
“On enquiry from the AO it was submitted that the assessee had deposited old currency notes of Rs. 500/- and Rs. 1000/- on different dates within the period allowed by the government.
The entire cash book was submitted to the AO alongwith desired documents and bank certificates etc. The AO without any further question and without confronting anything to assessee accepted the amount deposited at Rs. 13,00,000/- on 09.11.2016, Rs. 25,00,000/- on 10.11.2016 and Rs. 30,00,000/- on 11.11.2016, but made addition of Rs. 1,81,000/- deposited on 02.12.2016 and Rs. 1,27,500/- on 03.12.2016 totaling Rs. 3,08,500/-. The AO has accepted the cash book and cash in hand and also accepted that the assessee as per business routine cash is being received and spent for expenses The AO without confronting the assessee and without doubting the cash in hand as per books of account, mentioned in the assessment order that the assessee has not explained the reason for keeping old currency notes during the period 12.11.2016 to 02.12.2016.
While making the above additions the AO had not appreciated the reply filed that the amount deposited in bank was out of the cash in hand of business of M/s. Krishna Automobiles of which the assessee was the proprietor and the SBN were out of the closing cash in hand of business at Rs. 1,08,53,259/20 as on 08.11.2019 out of which Rs. 68,00,000/- was deposited in November and balance Rs. 3,08,500/- in December in the assessee’s current bank account with HDFC Bank. AO had wrongly made the addition even after accepting the cash in hand as per cash book. The AO has ignored the fact that it was allowed to deposit SBN's bank before 30.12.2016 and the remaining SBN's out of cash in hand with the assessee were duly deposited on 02.12.2016 and 03.12.2016. The order of the Ld. AO is against law and facts of the case as during demonetization, the assessee could deposit money till 31 December, 2016. Accordingly the assessee could deposit SBN in his bank account from 09.11.2016 to 31.12.2016, so the assessee had deposited Rs. 3,08,500/- on (i) AO had accepted the cash in hand i.e. SBN as on 08 11.2019 as per cash book at Rs. 1,08.53,259/20
(ii) The assessee could deposit SBN in his bank account from 09.11.2016 to 31.12.2016.
(iii) The total SBN deposited by the assessee during demonetization period out of cash in hand is only Rs. 71,08,500/- (Rs. 68,00,000/- + Rs. 3,08,500/-) against accepted cash in hand of Rs. 1.08 Crore.
(iv) The nature and source of cash deposits of the value amounting to Rs. 3,08,500/- is without any doubt, out of the accepted cash in hand of business as per accepted cash book by the AO. The books of account have also been accepted by the AO.
The addition of Rs 3,08,500/- is wrongly made & is prayed to be deleted.”
Under the circumstances, he pleaded that matter may be remanded to the file of the CIT(A) to adjudicate appeal on merits, appreciating the facts on record and after granting adequate opportunity of being heard.
Per contra, the Ld. DR stands by the impugned order, however, he has no objection in remanding the matter to CIT(A) in view of natural justice.
Heard rival contentions, perused the material on record, impugned order and written submission by the appellant. Admittedly, the CIT(A) passed order ex parte qua the assesse. The Ld. AR argued that the worthy hearing and appreciating merits of the case. The Ld. CIT(A) has merely mentioned that during appellate proceedings the appellant has repeated the submission made before the AO without giving supporting evidence and details of source of the disputed sum of Rs.3,08,500/- while dismissing the ground without rebutting the source of cash deposits explained to be out of cash withdrawal made three times by the appellant out of the SCN currency deposits, as above. The lower authorities ought to have disproved the claim of the assesse rebutting the source of cash deposits explained to be out of cash withdrawal after granting an adequate opportunity of being heard. In our view, the Ld. CIT(A) has acted in violation of principles of natural justice.
In the above view, we consider it deem fit to restore back the issue matter to the file of the Ld. CIT(A) to adjudicate the appeal afresh on the issue of source of disputed cash deposit of Rs.3,08,500/- after considering the written submission and evidences filed on record and may be filed before him during the fresh proceedings after granting sufficient opportunity of being heard to the assessee. The assessee shall cooperate in the fresh appellate proceedings before the ld. CIT(A). purpose.
Order pronounced in the open court on 12.05.2023