INCOME TAX OFFICER, NEW DELHI V. ANIL KUMAR JAIN, NEW DELHI

ITA 4529/DEL/2024

AI Insights

The case involves the Income Tax Officer appealing against the order of the CIT(A), which had allowed the appeal of the assessee, Anil Kumar Jain, regarding unexplained cash credits during the demonetization period. The Revenue challenged the deletion of the addition of Rs. 1,67,97,000 made by the Assessing Officer under section 68 of the Income-tax Act, 1961, claiming these were unexplained cash credits. The CIT(A) had accepted additional evidences from the assessee that were not initially presented to the Assessing Officer, leading to the Revenue's appeal. The Tribunal found that the CIT(A) should have obtained a remand report from the Assessing Officer before admitting the additional evidences, thus remanding the case back for a thorough examination of these documents.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31688 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHI
• Assessee Lawyers: RANO JAIN; PRANSHU SINGHAL
• Keywords: Additional evidence; Unexplained cash credit; Principle of natural justice
• Section: 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘A’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.4529/Del/2024 Assessment Year: 2017-18 Income Tax Officer, 14th Floor, E-2 Block Dr. S.P. Mukherjee Civic Centre, New Delhi-110002 Vs Anil Kumar Jain, 9/52-5, Kirti Nagar Indstrial Area, Delhi-110015 PAN-AAIPJ2776Q Revenue Assessee Assessee by Ms. Rano Jain, Adv. & Shri Pranshu Singhal, Adv. Revenue by Shri Ashish Tripathi, Sr DR Date of Hearing 20.02.2025 Date of Pronouncement 12 .03.2025 ORDER PER MANISH AGARWAL, AM, This appeal by the Revenue is directed against the order of National Faceless Appeal Centre/Ld. CIT(A), Delhi-17/10809/2019-20 dated 13.08.2024, pertaining to AY 2017-18. 2. The facts of the case are that the assessee is individual and engaged in the business of trading of electronic capacitor, Grade MPP films, etc in his proprietary from M/s Jainco Marketing Company. The case was selected for scrutiny under CASS for the reasons that cash was deposited during demonetization period. The assessee has made deposit of Rs.67,27,000/- in his bank account maintained with Punjab National Bank, Inder Puri, New Delhi, and Rs.85,90,000/- with Indian Overseas 2 ITA No.4529/Del/2024 Bank, Kirti Nagar, New Delhi andRs.14,80,000/- in Indian Overseas Bank New Rajender Nagar, New Delhi during the demonetization period. During the course of assessment proceedings, the Assessing Officer asked the assessee to furnish the sources thereof, in response, the assessee has filed part replies and has not submitted the complete details as asked for. Therefore, the Assessing Officer hold the said cash as unexplained cash credit and made addition of Rs.1,67,97,000/- u/s 68 of the Act. 2.1. The Assessing Officer also invoked the provisions of section 115BE for charging the tax at the special rates. In first appeal, the ld. CIT(A) vide impugned order has allowed the appeal the appeal of the assessee. Therefore, this present appeal is filed by the Revenue, where, the Revenue has taken following grounds of appeal:- i. That on the facts and circumstances of the case, the Ld CIT(A) erred in law in deleting the addition of Rs. 1,67,97,000/-, made by the AO on account of unexplained cash credits u/s 68 of the Income-tax Act, 1961. ii. That on the facts and circumstances of the case, the Ld CIT(A) erred in ignoring the relevant and circumstantial evidences regarding unsubstantiated purchases made by the assessee iii. That on the facts and circumstances of the case, the ld CIT(A) erred in ignoring the relevant and circumstantial evidence regarding revision of VAT Return for September, 2016 by the assessee. 3. Before us, the ld. Sr. DR submit that the assessee has not filed complete details with regard to the stock, sale invoices in support of the claim that the cash deposit during the demonetization was on account of cash sales made and duly recorded in the books of accounts. He further submits that during the course of appellate proceedings, the assessee has 3 ITA No.4529/Del/2024 filed additional evidences as is evident from the submission made before the Ld. CIT(A), which is available in the paper book at pages 144 to 204, wherein, at page 7 (page 158 of the paper book), the assessee filed assessment order under VAT Act, stock register and further filed copies of the cash sales bills with a request for admission of the same as additional evidences under Rule 46A of the I.T. Rules, 1962. The ld. DR further submit that the Ld. CIT(A) while allowing the appeal of the assessee observed that the assessee has filed the complete details of sales and stock. However, since, the assessee has not filed all these details before the Assessing Officer, the ld. CIT(A) should have taken remand report from the Assessing Officer before admitting such additional evidences. Therefore, he prayed that the matter may be sent to the file of the CIT(A) with a direction that the evidences filed by the assessee as additional evidences be sent to the Assessing Officer for his comments and then take a view in the matter. 4. Per contra, the Ld. AR vehemently supported the order of the ld. CIT(A) and submit that during the course of the assessment proceedings, the assessee had filed purchase and sales registers, copy of cash book, details of person from whom the cash was received along with consent copy of the amount, month-wise purchases, month wise sales, cash deposited, details of parties to whom the purchases are made etc. He further submits that the sales bills could not be filed as they were never asked by the Assessing Officer, however, the assessee has filed the copy of cash books and monthly wise sales, availability of cash as on 08.11.2016 when the demonetization was announced by the Hon’ble Prime Minister 4 ITA No.4529/Del/2024 would be established and therefore the order of the Ld. CIT(A) should be uphold. 5. We have considered the rival submissions and perused the material available on record. In the instance case, the assessee has made cash deposits during the demonetization period in SBM for which, it was claimed that it is accumulation of sales made in cash during the year. It is also a matter of fact that the sales of the assessee has increased substantially as compared to preceding assessment year and also there was substantial increase in cash deposit in the bank account. To examine the availability of cash, the claim of the assessee that it is from the cash sales, verification of the sales bills for such cash sales made needs to be done. Moreover, in absence of stock register, it could not be verified by whether the assessee is having sufficient stock for making such cash sales. All these documents were not available before the Assessing Officer and were filed before the first time before the Ld. CIT(A) as additional evidences along-with prayer under Rules 46A of the I.T. Rules. The ld. CIT(A) in its order, though have relied upon such documents, however, has not discussed anything about the admission of the same nor any report was obtained upon from the Assessing Officer before relying upon such documents. Under these facts and circumstances of the case and following the principal of natural justice, in our considered opinion, the issue is sent back to the file of the Ld. CIT(A) with a direction that the additional evidences filed by the assessee before him must be sent to the Assessing Officer for his comments and thereafter decide the issue as per law. Needless to say that the assessee 5 ITA No.4529/Del/2024 be provided an opportunity before deciding the appeal of the assessee. With these directions, the appeal of the Revenue is allowed for statistical purposes. 6. In the result, the appeal of the Revenue is allowed for statistical purpose. Order pronounced in the open court on 12th March, 2025. Sd/- Sd/- [ANUBHAV SHARMA] [MANISH AGARWAL] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 12.03.2025. Shekhar Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi, "