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Income Tax Appellate Tribunal, DELHI BENCH, ‘E’: NEW DELHI
Before: SHRI SHAMIM YAHYA & Ms. ASTHA CHANDRA
ORDER PER SHAMIM YAHYA, AM,
This appeal by the assessee is directed against the order of ld. CIT (Appeals)-29, New Delhi, dated 28.01.2022 and pertains to Assessment Year 2017-18.
The grounds of appeal reads as under:-
“1. That the order passed by CIT (A) - 29, New Delhi is contrary to facts and bad in law.
2. That on the facts and circumstances of the case and in law the CIT (A) was not justified in upholding the assessment order by passing an ex-parte appellate order without providing adequate and reasonable opportunity of being heard to the appellant.
2.1 That the ex-parte order passed by CIT (A) is not in accordance with the law since the CIT (A) has failed to adjudicate the appeal on merits and also failed to give specific findings on the grounds raised in appeal.
3. That on the facts and circumstances of the case and in law the CIT (A) erred in upholding the addition of Rs.2,20,69,000/- made in the assessment order on account of cash deposited in the bank account.
3.1 That CIT (A) failed to consider that the cash deposited in the bank account was represented by cash balance as per books of accounts and that the same had emanated out of cash sales which was already reckoned as income in the P&L account of the appellant for A.Y. 2017-18.
3.2 That on the facts and circumstances of the case and in law the CIT (A) was not justified in confirming addition of Rs.2,20,69,000/- made in the assessment order by treating the credits in the Bank Account as unexplained credit u/s 68 of the Income Tax Act.
3.3 That the action of the CIT (A) in upholding the addition amounts to double addition as the cash deposited which is emanated out of sales was already offered as income in the P&L account of the appellant.
4. That on the facts and circumstances of the case and in law the CIT (A) was not justified in upholding an estimated addition of Rs.27,01,31,073/- by treating 20% of the total turnover of Rs.135,06,55,368/- as net profit of the appellant.
4.1 That the CIT (A) failed to give any independent finding with regard to the above addition and the appellate order merely upholds the addition made in the assessment order.
4.2 That the CIT (A) failed to consider that in the absence of rejection of books of accounts by the Assessing Officer by finding specific defects in the books of accounts, no estimated net profit can be made.”
Brief facts of the case are that the assessee is carrying on business of chemicals other then petro chemicals, plastics waste & dry fruits etc. on wholesale basis under the name and style of M/s P S Traders as Proprietor. For the year under consideration, the income was assessed as under:-
Sl. Particulars Amount (in Rs.) No. 1 Returned income 8,02,866 2 Add: u/s 68 of the I.T. Act, 1961 as 2,20,69,000/- per-11 3 Add: estimated @ 20% of the Revenue 27,01,31,074/- from Operation of Rs.135,06,55,368/- 4 TOTAL INCOME 29,30,02,940/- 2 ROUNDED OFF 29,30,02,940/-
Upon assessee’s appeal, the Ld. CIT(a) mentioned that notices were not complied with by the assessee. He noted that assessee has not come forward and controverted the finding of the AO. He reproduced the AO’s order and concluded as under:-
9. During the appellant proceedings, in spite of numerous opportunities as mentioned above, no reply has been filed by the appellant to justify that the additions made by the AO were not correct. In view of the same, I confirm the additions of Rs.2,20,69,000/- made w/s 68 of the Act on account of unexplained cash deposits made by the assessee in his bank accounts and the addition of Rs.27,01,31,074/- on account of unexplained and unverified expenses and deductions claimed by the appellant in the ITR 10. Accordingly, grounds 6 to 17 of appeal are dismissed.
Against the above order, the assessee in appeal before us.
We have heard both the parties and perused the records. The ld. Counsel for the assessee pleaded that an opportunity may be granted to the assessee to properly represent the case before the ld. CIT(A). He argued that when appellate proceedings were going on, it was Covid period. Hence notices were not received.
6.1. The Ld. DR did not have any objection to this proposition.
Hence, in the interest of justice, we remit the issue to the file of the ld. CIT(A). The Ld. CIT(A) shall adjudicate the issue afresh after giving the assessee an opportunity of being heard.
In the result, the assessee’s appeal stands allowed for statistical purposes.
Order pronounced in the open court on 05th April, 2023.