Sireesha Kottagundu, Vizianagaram V. The Income Tax Officer, Ward-1, Vizianagaram

CO 36/VIZ/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4916 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-03-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 30-05-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 143(3); 142(1); 143(2); 69A

Judgement Text

आयकर अपीऱीयअधिकरण, विशाखापटणम पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री ऱलऱत क ु मार, न्याययक सदस्य एिं श्री एस बाऱाक ृ ष्णन, ऱेखा सदस्य के समक्ष BEFORE SHRI LALIET KUMAR, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अऩीऱ सं./ I.T.A. No.45/Viz/2021 (ननधाारण वषा / Assessment Year:2017-18) Income Tax Officer, Ward-1, Vizianagaram. Vs. Smt. Sireesha Kottagundu, Vizianagaram. PAN: CADPK 5202 K (अऩीऱाथी/ Appellant) (प्रत्यथी/ Respondent) C.O. No.36/Viz/2021 (In आयकर अऩीऱ सं./ I.T.A. No.45/Viz/2021 (ननधाारण वषा / Assessment Year:2017-18) Smt. Sireesha Kottagundu, Vizianagaram. PAN: ALJPP 1952 A Vs. Income Tax Officer, Ward-1, Vizianagaram. (अऩीऱाथी/ Appellant) (प्रत्यथी/ Respondent) ननधााररती की ओर से/ Assessee by : Sri G.V.N. Hari राजस्व की ओर से / Revenue by : Sri SPG Mudaliar, Sr. AR स ु नवाई की तारीख / Date of Hearing : 29/03/2022 घोषणा की तारीख/Date of Pronouncement : 29/03/2022 O R D E R PER BENCH: The captioned appeal is filed by the Revenue against the order of the Ld.CIT (A)-1, Visakhapatnam in appeal No.10489/2019-20/CIT(A)- 1/VSP/2020-21, date 15/09/2020 passed U/s. 143(3) r.w.s 250(6) of the Act for the AY 2017-18. 2 2. The Revenue has raised six grounds in its appeal and they are extracted herein below for reference: “1. The order of the Ld. CIT(A) is erroneous on facts and in law. 2. Whether on facts and circumstances of the case the Ld. CIT (A) was correct in law in deleting the addition of Rs.1,33,92,500/- ignoring and not appreciating the fact that the sources of cash deposits has not been explained by the assessee satisfactorily. 3. Whether on the facts and circumstances of the case the Ld. CIT(A) was correct in accepting the claim of the assessee that cash deposits in bank accounts were met out of available cash balance available on 06/11/2016 when assessee is not having sufficient stocks to execute sale. 4. The Ld. CIT(A) has ignored the fact that how an assessee can execute sale worth Rs. 1,35,03,344/- as on 6/11/2016 from the available stock of Rs. 9,11,450/-. 5. The appellant craves leave to add or delete or amend or substitute any ground of appeal before and / or at the time of hearing appeal. 6. For these and other grounds that may be urged at the time of appeal hearing, it is prayed that these above additions made on relevant disallowances be restored.” 3. Brief facts of the case are that the assessee is an individual engaged in the business of running jewellery shop. The assessee filed her return of income for the AY 2017-18 on 07/03/2018 admitting total income of Rs. 4,82,410/-. The case was selected for complete scrutiny through CASS to verify the cash deposits during the demonetization period. Subsequently, the notice u/s. 143(2) was issued to the assessee. During the scrutiny proceedings on the basis of the AIR 3 information available in ITBA, it was noticed that the assessee made cash deposits in her bank accounts during the year particularly during demonetization period ie., from 09/11/2016 to 31/12/2016. Thereafter, notice U/s. 142(1) was issued to the assessee with a questionnaire. In reply, the assessee submitted that the cash deposits made in the assessee’s bank accounts were proceeds of retail trade in Gold and Silver articles. The assessee also furnished certain other details to substantiate the cash deposits in her bank accounts. Not satisfied with the details furnished by the assessee, the Ld. AO was of the view that the in the absence any cogent material / documentary evidence in support of the cash deposits made in various bank accounts of the assessee aggregating to Rs. 1,33,92,500/- during the demonetization period, the Ld. AO invoked the provisions of section 69A of the IT Act, 1961 and treated the same as unexplained money. Aggrieved with the decision of the Ld. AO, the assessee filed an appeal before the Ld.CIT(A). 4. On appeal, the Ld.CIT (A) after considering the submissions made by the assessee and relying on the decision of the Mumbai Bench of the Tribunal in the case of DCIT vs. Karthik Constructions in ITA No.2282/Mum/2016,d ated 23/03/2018 held that since all the bank accounts of the assessee were fully disclosed in the books of account of the assessee and when it is apparent that all the cash deposits in the bank accounts of the assessee are duly recorded in books the addition U/s. 69A cannot be invoked. Accordingly, the Ld. CIT(A) granted relief 4 to the assessee and partly allowed the appeal. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. 5. Before us, it is the case of the Revenue that there is no purchase of Gold and Silver ornaments upto October 2016. Also huge and abnormal sales of Gold and Silver were recorded only in the month of November, 2016 as per VAT returns submitted by the assessee. The Ld. AR had rebutted saying that the assessee had produced all the books of account before the Assessing Officer and it was the duty of the Assessing Officer to verify the books of account of the assessee including the sale and purchase and stock register of the assessee. However, the Assessing Officer has not rejected the books of account of the assessee or doubted the transactions of sale and purchase of Gold and Silver by the assessee. The Ld. DR also demonstrated from the Paper Book submitted by the assessee that the VAT returns filed by the assessee sshows abnormal purchase and sales during the period of October and November 2016. The Ld. DR for the Revenue objected to the arguments of the Ld. AR and submitted that this issue was not emanated from the Assessment Order or the order of the Ld. CIT (A). 6. We have heard both the parties and perused the material available on record and the orders of the Authorities below. We note that the Ld. AO has not verified the purchase and sales abnormally shown during the months of October and November 2016 in the VAT returns. In the light of 5 the above, we find it appropriate to remit the matter to the file of the Ld. AO with a direction to complete the assessment de novo after making enquiries and pass a speaking order after affording a reasonable opportunity of being heard to the assessee. We also allow the assessee to file any evidence in support of its claim before the Ld. Assessing Officer. 7. In the result, the appeal of the Revenue and the Cross Objection of the assessee are disposed off in the light of the above. Pronounced in the open Court on the 29 th March, 2022. Sd/- Sd/- (ऱलऱत क ु मार) (एस बाऱाक ृ ष्णन) (LALIET KUMAR) (S.BALAKRISHNAN) न्याययकसदस्य/JUDICIAL MEMBER ऱेखा सदस्य/ACCOUNTANT MEMBER Dated : 29.03.2022 OKK - SPS आदेश की प्रतिलिपि अग्रेपिि/Copy of the order forwarded to:- 1. ननधााररती/ The Assessee– Smt. Sireesha Kottagundu, 7-5-10, Suprabha Jewellers, Main Road, Parvathipuram, Vizianagaram – 535501. 2. राजस्व/The Revenue – Income Tax Officer, Income Tax Office, Koppuguranna Building, Siddarth Nagar, Vizianagaram-535003. 3. The Principal Commissioner of Income Tax-1, Visakhapatnam. 4. आयकर आय ु क्त (अऩीऱ)/ The Commissioner of Income Tax (Appeals)-1, Visakhapatnam. 5. ववभागीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, ववशाखाऩटणम/ DR, ITAT, Visakhapatnam 6. गार्ा फ़ाईऱ / Guard file आदेशान ु सार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam