HABIBBHAI ADAMBHAI MANIYA,NADIAD V. INCOME TAX OFFICER WARD 1, NADIAD

ITA 236/AHD/2024

AI Insights

The case involves Habibbhai Adambhai Maniya, the appellant, who contested the order of the Commissioner of Income-tax (Appeals), which confirmed the addition of Rs.49,46,000 to his income under Section 69A of the Income-tax Act, 1961. This amount represented cash deposits made during the demonetization period, which the lower authorities deemed unexplained. The appellant argued that these deposits were from cash sales of his business, Vikas Trading, and were recorded in audited books. The Tribunal noted that the CIT(A) had reiterated the Assessing Officer's order without considering the appellant's submissions and the evidences, leading to the decision to restore the matter to the Assessing Officer for a detailed examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472285 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-07-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 10-02-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: GIRISH MEHTA; HITESH CHAVDA
• Keywords: Principle of natural justice
• Section: 250; 69A

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0011ायपीठ ‘A’ अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE MRS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER ITA No. 236/Ahd/2024 िनधा\u0005रण वष\u0005/Assessment Year: 2017-18 Habibbhai Adambhai Maniya, Sindhi Bazar, Station Road, Nadiad-387001, Gujarat PAN : ACRPM 8025 G Vs. Income Tax Officer, Ward-1, Nadiad अपीलाथ\u0007 अपीलाथ\u0007 अपीलाथ\u0007 अपीलाथ\u0007/ (Appellant) \b\t \b\t \b\t \b\t यथ\u0007 यथ\u0007 यथ\u0007 यथ\u0007/ (Respondent) Assessee by : Shri Girish Mehta, Advocate & Shri Hitesh Chavda, AR Revenue by : Shri Sanjay Kumar, Sr DR सुनवाई क\u0002 तारीख/Date of Hearing : 11.07.2024 घोषणा क\u0002 तारीख /Date of Pronouncement: 09.10.2024 आदेश आदेश आदेश आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: Present appeal has been filed by the assessee against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi [hereinafter referred to as \"CIT(A)\" for short] dated 13.12.2023 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as \"the Act\" for short], for the Assessment Year (AY) 2017-18. 2. The grounds raised by the assessee are as follows:- “1. The Ld Commissioner of Income Tax (Appeals) has erred on facts and in law in summarily dismissing the appeal of the appellant without following the principle of natural justice and passed the ex parte order. 2. The Ld Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the addition made u/s 69A of the Act to the tune of 2 ITA No. 236/Ahd/2024 Habibbhai Adambhai Maniya Vs. ITO AY : 2017-18 Rs.48,66,000/- being cash deposit made in the business current account No. 903002201003984 during the demonetisation period and deposit of Rs. 80,000/- in Department of Post. (Rs.48,66,000 plus Rs.80,000 equal to 49,46,000/-) Both recorded in the audited books of account without properly appreciating the facts and considering the provisions of law. 3. The Ld lower authorities have erred on facts and law in presuming the cash deposit of Rs.48,66,000/-in current account No. 903002201003984 and Rs. 80000/- in Department of Post as per provisions of section 69A of the Income tax Act and added to the total income. 4. The lower authorities have failed to appreciate that the genuineness of the source of the cash deposit have been explained and made out of the cash sales (Total Turn Over Rs.4.72 Cr) made by the assessee and income already offered for taxation. 5. The Appellant craves leave to add/amend /alter any of the grounds of appeal before or at the time of hearing. 6. In view of all these and other reasons, which may be produced during the process of appeal, the appeal may please be allowed and justice rendered.” 3. The solitary issue in the present appeal relates to the addition made to the income of the assessee on account of cash found deposited in his bank account during demonetization period remaining unexplained amounting to Rs.49,46,000/-. 4. The ld. CIT(A), we have noted, has reiterated the order of the Assessing Officer in the absence of any participation on behalf of the ld. Counsel for the assessee before him in appellate proceedings. The solitary contention of the ld. Counsel for the assessee before us was that the order passed by the ld. CIT(A) was grossly against the provisions of law and in contravention to the principles of natural justice. He pointed out that, during the course of appellate proceedings, the assessee had participated seeking adjournments on several occasions which was also granted by the ld. CIT(A), and it was only 3 ITA No. 236/Ahd/2024 Habibbhai Adambhai Maniya Vs. ITO AY : 2017-18 on the last occasion when none appeared on behalf of the assessee that the ld. CIT(A) went forward and decided the appeal against the assessee. He contended that the ld. CIT(A) reiterated the order of the Assessing Officer without going into the facts of the case and the material before him which was placed before the Assessing Officer during assessment proceedings by the assessee itself. He pointed out that the Assessing Officer had made addition of the cash found deposited in the bank account of the assessee in the absence of any satisfactory explanation regarding the source of the same. Ld. Counsel for the assessee pointed out that, during the assessment proceedings, the assessee had stated that he was carrying out business of tobacco products and confectionery of namkeen and other items since very long in his proprietorship concern ‘Vikas Trading’. That, the cash deposited was on account of this business carried out by him. The Tax Audit Report of the assessee, duly certified by the Chartered Accountant, was also before the Assessing Officer along with the audited financial results of the assessee. He pointed out that all these facts are noted by the Assessing Officer in his assessment order in page No. 2 itself. He further pointed out that, during the assessment proceedings, the Assessing Officer had exercised his powers of issuing notices and acquired copy of bank account statements of the assessee from the respective bank, which revealed the fact of cash deposited in the bank account. He contended that these very bank accounts also revealed that all the cash deposited was used to make payments to the suppliers of material in which he traded. Ld. Counsel for the assessee contended that all these facts, though present before the ld. CIT(A), he completely ignored all of them and went on to reiterate the order of the Assessing Officer. Ld. Counsel for the assessee also contended that the audited accounts of the assessee coupled with the bank statements procured by the Assessing Officer which form part of the audited accounts clearly revealed that all cash deposits in the bank account 4 ITA No. 236/Ahd/2024 Habibbhai Adambhai Maniya Vs. ITO AY : 2017-18 were attributable to the business of the assessee and utilized for the same purpose alone by the assessee. That, there was no question of treating the cash so deposited as unexplained and adding the same to the income of the assessee. He contended that the assessee is in possession of all confirmation and evidences of the source of cash deposits and is willing to now place them before the Revenue Authorities for verification. He pleaded that, therefore, the mater may be restored back to the Assessing Officer for verifying the contention of the assessee. 5. Ld. DR, however, supported the order of the ld. CIT(A). 6. We have heard the contentions of both the parties and we are in agreement with the ld. Counsel for the assessee that it is a fit case for reconsideration of the issue raised in appeal by the Assessing Officer afresh. The ld. Counsel for the assessee has made out a fairly good case before us that the ld. CIT(A) has reiterated the order of the Assessing Officer without considering all the facts and material before him. As rightly pointed out by the ld. Counsel for the assessee, the ld. CIT(A) ought to have considered the audited financial results of the assessee, the Tax Audit Report of the assessee and the copy of bank statements collected by the Assessing Officer during assessment proceedings for adjudicating the issue of cash found deposited in the bank account of the assessee, even if none appeared on behalf of the assessee. Having failed to do so and the assessee having now filed before us all evidences in support of his claim of the cash deposited in the bank account being from explained sources, it is in the interest of justice that the issue be reconsidered by the Revenue Authorities after due verification of all the claims made by the assessee. We, therefore, restore the issue back to the Assessing Officer to decide the issue of cash deposited in the bank account of 5 ITA No. 236/Ahd/2024 Habibbhai Adambhai Maniya Vs. ITO AY : 2017-18 the assessee afresh after giving due opportunity of hearing to the assessee and after considering all explanation and evidences filed by the assessee in this regard. The grounds raised by the assessee are accordingly allowed for statistical purposes. 7. In effect, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 09/10 /2024 at Ahmedabad. Sd/- Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad; Dated 09/10/2024 **btk आदेश आदेश आदेश आदेश क\u0002 क\u0002 क\u0002 क\u0002 \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप अ\tेिषत अ\tेिषत अ\tेिषत अ\tेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u000f अपीलाथ\u000f अपीलाथ\u000f अपीलाथ\u000f / The Appellant 2. \u0003\u0010यथ\u000f \u0003\u0010यथ\u000f \u0003\u0010यथ\u000f \u0003\u0010यथ\u000f / The Respondent. 3. संबंिधत संबंिधत संबंिधत संबंिधत आयकर आयकर आयकर आयकर आयु\u0014 आयु\u0014 आयु\u0014 आयु\u0014 / Concerned CIT 4. आयकर आयकर आयकर आयकर आयु\u0014 आयु\u0014 आयु\u0014 आयु\u0014 ) अपील अपील अपील अपील ( / The CIT(A)- 5. िवभागीय िवभागीय िवभागीय िवभागीय \u0003ितिनिध \u0003ितिनिध \u0003ितिनिध \u0003ितिनिध , आयकर आयकर आयकर आयकर अपीलीय अपीलीय अपीलीय अपीलीय अिधकरण अिधकरण अिधकरण अिधकरण , /DR,ITAT, Ahmedabad, 6. गाड\u0019 गाड\u0019 गाड\u0019 गाड\u0019 फाईल फाईल फाईल फाईल /Guard file. आदेशानुसार आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, TRUE COPY सहायक सहायक सहायक सहायक पंजीकार पंजीकार पंजीकार पंजीकार (Asstt. Registrar) आयकर आयकर आयकर आयकर अपीलीय अपीलीय अपीलीय अपीलीय अिधकरण अिधकरण अिधकरण अिधकरण ITAT, Ahmedabad 1. Date of dictation …………07.10.2024.. 1. Date on which the typed draft is placed before the Dictating Member :..… 08.10.2024….…… 2. Other Member……08.10.2024….………….. 3. Date on which the approved draft comes to the Sr.P.S./P.S…08.10.2024…… 4. Date on which the fair order is placed before the Dictating Member for pronouncement…09.10.24…… 5. Date on which the fair order comes back to the Sr.P.S./P.S…09.10.2024…….……… 6. Date on which the file goes to the Bench Clerk…09.10.2024…….…… 7. Date on which the file goes to the Head Clerk……. 8. The date on which the file goes to the Assistant Registrar for signature on the order………… 9. Date of Despatch of the Order……………… "