ACIT-1(1), INDORE, INDORE V. ASHOK KUMAR JAIN, INDORE

ITA 390/IND/2023

AI Insights

The case involves Ashok Kumar Jain, who filed a return of income for the Assessment Year 2017-18 declaring a total income of Rs. 21,21,390. The case was selected for limited scrutiny to examine cash deposits, cash withdrawals, and deductions against income from other sources. The AO issued multiple notices under sections 143(2) and 142(1) of the Income-tax Act, 1961, which the assessee failed to comply with, leading to a best judgment assessment. The AO treated a significant portion of the cash deposits as unexplained under section 69A, resulting in an addition of Rs. 1,01,11,000 to the assessee's income. The CIT(A) later deleted this addition based on additional evidences provided by the assessee, which were not examined by the AO. The revenue appealed against this decision, leading to the current remand for a thorough examination of the new evidences.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470291 (ITAT-INDORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961, Income-tax Rules, 1962
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: FORREVENUESUBMITTEDTHAT; FORASSESSEESUPPORTEDTHEORDEROFCIT A; HECOULDNOT; SHRIASHISHPORWAL
• Assessee Lawyers: SHRIRANJANAGRAWAL
• Keywords: Additional evidence
• Section: 143(3); 69A

Judgement Text

"Page 1 of 4 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER ITA No.390/Ind/2023 Assessment Year:2017-18 ACIT-1(1) Indore बनाम/ Vs. Ashok Kumar Jain, 501,Pushpratan Diamond Colony Indore (Assessee/Appellant) (Revenue/Respondent) PAN:ABTPJ1306N Revenue by Shri Ashish Porwal, Sr. DR Assessee by Shri Ranjan Agrawal, AR Date of Hearing 10.02.2025 Date of Pronouncement 25.02.2025 आदेश/ O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by order of first appeal dated 28.08.2023 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 26.12.2019 passed by learned DCIT/ACIT-2(1), Indore [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the revenue has filed this appeal. 2. The background facts leading to present appeal are such that the assessee-individual filed return of income of AY 2017-18 declaring a total Ashok Kumar Jain ITA No. 390/Ind/2023 – AY 2017-18 Page 2 of 4 income of Rs. 21,21,390/-. The case was selected under limited scrutiny to examine (i) cash deposits during the year, (ii) cash withdrawals, and (iii) deduction against income from other sources. The AO issued notices u/s 143(2)/142(1) which remained uncompiled by assessee. The AO also made it clear to assessee that failure to comply with notices would invite best judgement assessment even then there was no response from assessee. Ultimately, the AO gave one more chance to assessee to which the assessee filed part reply on 20.11.2019. Thereafter, vide notice dated 04.12.2019, the AO again asked assessee to explain as to why the cash deposited in Bank A/c be not considered as unexplained money u/s 69A if no compliance is made to establish source of cash deposits but still the assessee failed to comply with this notice also. Ultimately, from the Bank Statements called from different banks u/s 133(6), the AO found that a total of Rs. 1,13,11,000/- was deposited in different banks during the previous year 2016-17. Accordingly, the AO treated deposit of Rs. 1,01,11,000/- as unexplained after giving credit of cash withdrawal of Rs. 12,00,000/- made by assessee from bank on 08.11.2016 and made addition of Rs. 1,01,11,000/- u/s 69A. Aggrieved, the assessee carried matter in first- appeal. 3. During first-appeal, the assessee filed submission which is re- produced by CIT(A) in Para 4 of impugned order. The assessee also filed additional evidences in terms of Rule 46A of Income-tax Rules, 1962. The Ashok Kumar Jain ITA No. 390/Ind/2023 – AY 2017-18 Page 3 of 4 CIT(A) passed order deleting the addition made by AO. Aggrieved by order of CIT(A), the revenue has filed this appeal before us. 4. We have heard learned Representatives of both sides and carefully perused the orders of lower-authorities. Ld. DR for revenue submitted that the case of assessee was selected for limited scrutiny to examine three points one of which was “Cash deposit during the year”. During scrutiny proceeding, the assessee has not responded to the notices of AO. Only at last the assessee filed one reply which was also found by AO as part reply. In the interest of justice, the AO again provided an opportunity to assessee vide notice dated 04.12.2019 to explain the source of cash deposit with a clear indication that the cash deposited would be treated as unexplained money u/s 69A in case of non-compliance but the assessee still remained non-response. In these circumstances, the AO treated the cash deposited in Bank A/c as unexplained and made addition. During first-appeal, the CIT(A) has reversed AO’s action and given relief to assessee on the basis of additional evidences without giving any opportunity to the AO to examine those evidences which is a violation of Rule 46A(3) of Income-tax Rules, 1962. That apart, the Ld. AR has also filed some more additional evidences before ITAT also in a separate “Paper-Book-B”. Ld. DR submitted that the only course available to this Tribunal in these facts, is to remand this case back to the lower-authorities for an apt adjudication. Ld. DR also proposed that it would be better to restore this case at the level of AO so that the AO can adequately verify the evidences of assessee and take a proper decision. Ashok Kumar Jain ITA No. 390/Ind/2023 – AY 2017-18 Page 4 of 4 While Ld. AR for assessee supported the order of CIT(A), he could not controvert the submission as well as proposal of Ld. DR. Faced with this situation and taking into account the submissions of Ld. DR, we are inclined to remand this case back to the file of AO for a detailed examination of assessee’s evidences and thereafter passing an apt order. Needless to mention that the AO shall give necessary opportunities to assessee which the assessee shall avail without seeking unnecessary adjournments. Ordered accordingly. 5. Resultantly, this appeal is allowed for statistical purpose. Order pronounced by putting on notice board as per Rule 34 of ITAT Rules, 1963 on 25/02/2025 Sd/- Sd/- (DINESH MOHAN SINHA) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 25/02/2025 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore "