GHISULAL NAVEEN KUMAR,BANGALORE V. INCOME TAX OFFICER, EXEMPTIONS, WARD-4(2)(2), BANGALORE

ITA 1536/BANG/2024

AI Insights

The case involves an appeal by Ghisulal Naveen Kumar against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs. 12,00,000 as unexplained cash credit under section 69A of the Income Tax Act. The addition was initially made by the AO due to unexplained cash deposits in the assessee's bank account during the demonetization period. The assessee argued that these deposits were from legitimate sources, including an opening cash balance and current year income. However, the CIT(A) upheld the AO's decision, leading to the appeal before the Tribunal. The Tribunal found procedural shortcomings in the lower authorities' handling of the case and remanded it for a detailed examination of the cash deposits' sources.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 25247 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-09-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 16-08-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH R GHALE; STANDING COUNSEL
• Assessee Lawyers: THARUN KOTHARI
• Keywords: Set aside; Unexplained cash credit
• Section: 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA No. 1536/Bang/2024 Assessment Year: 2017-18 Ghisulal Naveen Kumar, No.36, NR Layout, 1st Cross, Konena Agrahara, H.A.L, Bengaluru-560 017. PAN – AFUPN 6877 P Vs. The Income Tax Officer, Exemptions, Ward – 4(2)(2), Bengaluru. APPELLANT RESPONDENT Assessee by : Shri Tharun Kothari, CA Revenue by : Shri Ganesh R Ghale, Standing Counsel Date of hearing : 17.09.2024 Date of Pronouncement : 19 .09.2024 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order passed by the NFAC, Delhi dated 15/07/2024 in DIN No. ITBA/NFAC/S/250/ 2024-25/1066718123(1) for the assessment year 2017-18. 2. The only issue raised by the assessee is that the ld. CIT(A) erred in confirming the addition made by the AO for Rs. 12,00,000/- representing the deposits of cash u/s 69A of the Act. ITA No.1536/Bang/2024 Page 2 of 5 . 3. In the present case, there was cash deposited by the assessee in the bank account during the demonetization period, the source of which was not explained during the assessment proceedings. Therefore, the AO treated the same as unexplained cash credit and added to the total income of the assessee. 4. On appeal before the ld. CIT(A), the assessee submitted that the sister of the tax Consultant during relevant time has passed away and, therefore, the Tax Consultant could not make the proper representation during the assessment proceedings. 5. Besides, the above the assessee also submitted that there was an opening cash balance as on 31/03/2016 amounting to Rs. 9,73,064/- which was utilized for making the cash deposit during the demonetization period along with current year income from the salary as well as other sources. 6. However, the ld. CIT(A) without making the note of the submission has confirmed the order of the AO by observing as under: “6.2. Further, the assesse submitted the balance-sheet showing the capital account statement and statement of affairs. However, the assesse failed to explain the nature and source of the cash deposits made amounting to Rs.12,00,000/-. During the appellate proceedings, in spite of providing sufficient opportunities, the appellant did not file any submission/explanation in support of the grounds of appeal raised. However, the appellant claimed to have deposited cash out of cash in hand and from cash received out of salary, interest. However the same could not b proved with supporting documentary evidences before the AO as well as during the appellate proceedings. In view of the facts discussed above, the nature & source of deposits made by the appellant remained unexplained. Thus the appellant had failed to discharge his onus under section 69A of the Act. Hence, the addition made by the AO of Rs.12,00,000/- as unexplained money u/s 69A of the Act is confirmed. Accordingly, Ground No. 2 to 6 are dismissed.” ITA No.1536/Bang/2024 Page 3 of 5 . 7. Being aggrieved by the order of ld. CIT(A), the assessee is in appeal before us. 8. The ld. AR before us submitted that all the notices intimating the date of hearing were issued to the email id which the assessee could not access and accordingly such notices were not complied with. However, the ld. AR requested to set aside the issue to file of the AO for fresh adjudication as per the provisions of law. 9. On the other hand, the ld. DR submitted that the assessee is not co-operating and, therefore, he should not be afforded any further opportunity. The ld. DR vehemently supported the orders of the authorities below. 10. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, the primary onus lies upon the assessee to justify the source of cash deposits based on cogent materials. But the assessee in the given facts and circumstances failed to make such compliances during the assessment and appellate proceedings. It is trite law that the income of the assessee has to be assessed within the four corners of law and on a scientific basis even in a situation where the assessee does not co-operate in furnishing the necessary material. In the given case, the addition has been made for cash deposit in the bank. Admittedly, the cash deposited in the bank per se does not represent the unexplained money u/s 69A of the Act, but the onus lies upon the assessee to provide the source of cash. In this regard, we find that only the source of cash deposits have been treated as income without giving the set off of the cash withdrawals by the ITA No.1536/Bang/2024 Page 4 of 5 . assessee during the year under consideration as well as the opening cash balance available with the assessee as on 31/03/2016. However, from the orders of the authorities below, there is no finding qua the opening cash balance as well as the cash withdrawals from the bank by the assessee, which certainly explains the source of cash deposit to the extent of opening balance and cash withdrawal until and unless something adverse is brought on record. 10.1 Likewise, it is also important to note that the provisions of sec. 249(2) of the Act mandates that the ld. CIT(A) shall dispose of the appeal of the assessee in writing with reasoning and by way of speaking order but in the given case, the CIT(A) has made addition without adopting the scientific approach. Thus, in the interest of justice and fair play, we are inclined to extend one more opportunity to the assessee to represent his case before the AO with the direction that the assessee shall not seek any adjournment and shall extend full cooperation during the proceedings before the AO. Hence, the ground of appeal of the assessee is allowed for statistical purposes. 11. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in court on 19th day of September, 2024 Sd/- Sd/- (GEORGE GEORGE K) (WASEEM AHMED) Vice President Accountant Member Bangalore, Dated, 19th September, 2024 vms ITA No.1536/Bang/2024 Page 5 of 5 . Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore "