DEVINDER KUMAR,DELHI V. DCIT, CIRCLE-62(1), DELHI

ITA 1028/DEL/2024

AI Insights

The case involves Devinder Kumar, who appealed against the order of the National Faceless Appeal Centre (NFAC) confirming an addition of Rs. 20,81,900 under section 69A of the Income-tax Act, 1961, concerning cash deposits made during the demonetization period. The assessee, engaged in government contract work, had his income tax return scrutinized due to these deposits. Initially, the AO completed the assessment ex parte under section 144 of the Act due to non-representation by the assessee. The CIT(A) admitted additional evidence but upheld the AO's addition. The ITAT found procedural lapses and insufficient consideration of the new evidence, leading to the restoration of the case to the AO for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34777 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: KINJAL BHUTA
• Keywords: Business income; Additional evidence
• Section: 144; 143(3); 22; 69A

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 1028/Del/2024 (Assessment Year: 2017-18) Devinder Kumar, 1857, Mamurpur Narela, Delhi-110040 Vs. DCIT, Circle-62(1), Delhi (Appellant) (Respondent) PAN: ALNPK4689D Assessee by : Ms. Kinjal Bhuta, Adv Revenue by: Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 16/01/2025 Date of pronouncement 29/01/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.1028/Del/2024 for AY 2017-18, arises out of the order of the National Faceless Appeal Centre (NFAC). Delhi [hereinafter referred to as ‘ld. NFAC’, in short] in Appeal No. ITBA/NFAC/S/250/2023-24/1058804902(1) dated 15.12.2023 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 04.11.2019 by the Assessing Officer, DCIT, Circle-62(1), New Delhi (hereinafter referred to as ‘ld. AO’). 2. At the outset, we find that there is delay in filing of appeal of the assessee by 22 days before us. The assessee had stated in the condonation petition that his mother was hospitalized during the relevant period, in support of his contention, he had enclosed the relevant documents as evidence. Considering the reasons adduced by the ITA No. 1028/Del/2024 Devinder Kumar Page | 2 assessee, we hold that the assessee was having sufficient cause for not filing the appeal in time before us. Accordingly, the delay is hereby condoned and appeal of the assessee is admitted for adjudication. 3. The only issue to be decided in this appeal is as to whether the ld CIT(A) was justified in confirming the addition made in the sum of Rs. 20,81,900/- u/s 69A of the Act in respect of cash deposit made during the demonetization period. 4. We have heard the rival submissions and perused the material available on record. The assessee is engaged in the business of executing contracts with various Government departments like Irrigation and Flood Control Department, Delhi Urban Shelter Improvement Board and Public Works Department. These contracts involve the provision of construction and other related projects. The assessee has filed his return of income declaring taxable income of Rs. 47,27,770/-. The case of the assessee was selected for scrutiny to verify the cash deposits made by the assessee during demonetization period. The ld AO obtained bank statements from Canara Bank and Corporation Bank vide notice u/s 133(6) of the Act. From the perusal of the said bank statements, the ld AO observed that assessee had made cash deposits of Rs. 20,81,900/- during the demonetization period. The assessee during the course of assessment proceedings was having some misunderstanding with the Chartered Accountant and accordingly, the assessment proceedings went unrepresented from the side of the assessee, which lead the ld AO to complete the assessment ex parte u/s 144 of the Act. Before the ld CIT(A), the assessee furnished additional evidence in support of his contentions by stating that the source of cash deposits were out of earlier cash withdrawals made by the assessee apart from available cash balance. The assessee furnished the details of cash withdrawals, cash ITA No. 1028/Del/2024 Devinder Kumar Page | 3 deposits and business receipts in cash before the ld CIT(A). The ld CIT(A) admitted the additional evidences but however did not appreciate the contentions of the assessee thereon and proceeded to uphold the addition made by the ld AO. 5. The ld AR before us prayed for setting aside of this order to the file of the ld AO to reexamine the issue in the light of the evidences submitted by the assessee in the form of cash withdrawals and cash deposits, balance sheet of the assessee as on 31.03.2016 and 31.03.2017. The ld DR also argued that there was a violation of Rule 46A of the Income Tax Rules made by the ld CIT(A) in the instant case and accordingly submitted that de novo adjudication by the ld AO would have to be done. Considering the submission made by both the parties, we deem it fit and appropriate, in the interest of justice and fairplay, to restore this appeal to the file of the ld AO for de novo adjudication in accordance with law qua the issue of cash deposits made in the bank account during the year. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 29/01/2025. -Sd/- -Sd/- (YOGESH KUMAR U.S.) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 29/01/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent ITA No. 1028/Del/2024 Devinder Kumar Page | 4 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "