HIMMAT RAMJIBHAI PATEL,NAGPUR V. ITO WARD 4(3), NAGPUR

ITA 479/NAG/2024

AI Insights

The case involves Shri Jonnakunta Manikanta Rao, who appealed against the order of the CIT (A) confirming an addition of Rs. 57,31,412 as unexplained credit under section 68 of the Income Tax Act, 1961. The assessee argued that the amount represented collections made as a commission agent for Shriram City Union Finance Ltd., and not unexplained income. The Assessing Officer initially made the addition due to non-compliance with notices and lack of supporting evidence. The CIT (A) upheld this decision, noting non-compliance with procedural requirements. However, the Tribunal found that the assessee had indeed submitted relevant documents and replies, which were not considered by the CIT (A). Consequently, the Tribunal remanded the case for a thorough examination of the submitted evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473147 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: VENKATA NAGARAJU
• Keywords: Set aside; Corroborative evidences; TDS; FORM 26AS
• Section: 144; 271(1)(c); 68

Judgement Text

" ITA No1155 of 2024 Jonnakunta Manikanta Rao Page 1 of 6 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No.1155/Hyd/2024 (िनधाŊरण वषŊ/Assessment Year: 2014-15) Shri Jonnakunta Manikanta Rao, Hyderabad PAN:APTPM2901G Vs. Income Tax Officer Ward 7(2) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri Venkata Nagaraju, CA राज̾ व Ȫारा/Revenue by:: Shri Vamshi Krishna, DR सुनवाई की तारीख/Date of hearing: 23/01/2025 घोषणा की तारीख/Pronouncement: 27/01/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President This appeal filed by the assessee is directed against the order dated, 30/10/2024 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2014-15. 2. The assessee has raised the following grounds of appeal: “1. The ld. CIT(A) erred in confirming the addition of Rs. 57,31,412/- in relation to money deposited as unexplained credit u/s. 68 of the Income tax Act, 1961 made by the AO ITA No1155 of 2024 Jonnakunta Manikanta Rao Page 2 of 6 without considering the submissions made by the appellant during the course of appellate proceedings. 2. The ld. CIT(A) failed to consider the facts and submissions made by the appellant and erred in appreciate the fact that the appellant is an employee of Shriram Group. 3. The ld. CIT(A) erred in considering the submission of the appellant that he is a commission agent for M/s. Shriram City Union Finance Ltd. and his main activities are to collect the deposits on behalf of M/s. Shriram city Union Finance Ltd. from the nearby villages. On the deposits made, he will get the commission. 4. The AO as well as the ld. CIT(A) both have erred in considering the circumstances of the case and appreciate the fact that during the year under consideration as per Form 26AS, the appellant had received commission under sec. 194H of Rs. 3,28,033/- out of which TDS has been deducted at Rs. 32,805/-. He also received Rs. 90,415/- on which TDS deducted at Rs. 9,042/-. These amounts are nothing but the commission received towards the services rendered to Shriram Financial Products Solutions (Chennai) P Ltd. 5. The ld. AO erred in initiating the penalty proceedings under sec. 271(1)(c) of the I T Act. 6. The appellant craves leave to add, amend or delete any of the above ground on or before the final date of hearing.” 3. At the time of hearing, the learned AR of the assessee has submitted that the assessee is a commission agent, working with Shriram City Union Finance Ltd and his main activity is to collect the deposits on behalf of the company from nearby villages. The Assessing Officer has made addition on account of cash deposits in the bank account which is nothing, but the collection made by the assessee on behalf of the company. He has further submitted that the Assessing Officer has made the addition for ITA No1155 of 2024 Jonnakunta Manikanta Rao Page 3 of 6 want of supporting evidence, however, the assessee has filed the relevant record and reply before the learned CIT (A) vide acknowledgement dated 10/10/2024 place at page 9 of the paper book, but the learned CIT (A) without considering the reply and documents filed by the assessee has passed the impugned order ex-parte. Thus, he has pleaded that the matter may be remanded to the record of the Assessing Officer for verification of the claim from the relevant records showing that the deposits made in the bank account are nothing but the collection made by the assessee from various clients of Shriram City Union Finance Ltd, on which the assessee is getting only commission as his income. 4. The learned DR, on the other hand, submitted that despite several opportunities given by the Assessing Officer as well as the learned CIT (A), the assessee has failed to comply with any of the notices issued by the authorities. He has relied upon the orders of the authorities below. 5. We have considered the rival submissions as well as the relevant material on record. The Assessing Officer has passed the assessment order u/s 144 of the I.T. Act, 1961 when there was no compliance on behalf of the assessee to the various notices issued and consequently, the Assessing Officer has made the addition on account of cash deposits in the bank account of the ass as well as the commission income of the assessee. The assessee challenged the action of the Assessing Officer before the ITA No1155 of 2024 Jonnakunta Manikanta Rao Page 4 of 6 learned CIT (A). However, the learned CIT (A) has dismissed the appeal of the assessee by recording the fact that there is no compliance on behalf of the assessee to the various notices issued and thereby it is observed that the assessee has chosen not to submit anything in support of the grounds of appeal. The relevant findings of the learned CIT (A) in para 3.3 and 3.4 are as under: ITA No1155 of 2024 Jonnakunta Manikanta Rao Page 5 of 6 6. Thus, the learned CIT (A) has passed the impugned order on the ground that the assessee has not filed anything in support of the grounds of appeal. However, we find that the assessee has filed the reply on 10/10/2024 along with the documents which are attached with the said reply giving the details of cash deposits, bank account statement etc., Acknowledgement of the filing of the reply is placed at page No.9 of the paper book as under: ITA No1155 of 2024 Jonnakunta Manikanta Rao Page 6 of 6 7. It appears that the learned CIT (A) passed the impugned order without considering the said reply of the assessee. Therefore, in the facts and circumstances of the case and in the interest of justice, the impugned order of the learned CIT (A) is set aside and the matter is remanded to the record of the Assessing Officer for fresh adjudication for verification and examination of the relevant records to be filed by the assessee in support of the source of deposits made in the bank account of the assessee. Needless to say, the assessee shall be given an opportunity of hearing before passing the order. 8. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 27th January, 2025. Sd/- Sd/- (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE-PRESIDENT Hyderabad, dated 27th January, 2025 Vinodan/sps Copy to: S.No Addresses 1 Shri Jonnakunta Manikanta Rao, H.No.13-4-754/1 Karwan, Mehadipatnam, Hyderabad 500086 2 Income Tax Officer Ward 7(2) Room No.808, 8th Floor, Signature Towers, Kondapur, Hyderabad 500084 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order "