Ramabhai Dhudabhai Patel, Deesa V. The Income tax Officer,Ward-1, Palanpur

ITA 1054/AHD/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0881 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-07-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 13-12-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 1054/Ahd/2023 (िनधाᭅरण वषᭅ िनधाᭅरण वषᭅ िनधाᭅरण वषᭅ िनधाᭅरण वषᭅ / Assess ment Year : 2017-18) Ra ma bh ai D hu d ab ha i Pat el Var dh ma n Co mp le x , B /h . Bh an sha li T ru st , C oll eg e Ro ad, D ee sa , Ba nas kan th a, Gu jar at , 38 55 35 बनाम बनामबनाम बनाम/ V s . In co me T ax Of fi ce r W ar d – 1, Pal an pu r ᭭थायी लेखा सं./जीआइआर सं./P A N / G IR N o . : A P K P P 2 7 1 5 C (Appellant) . . (Respondent) अपीलाथᱮ ओर से /Appellant by : Shri Manthan Khokhani, AR ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri Sanjay Jain, Sr. DR D a t e o f H e a r i n g 15/07/2024 D a t e o f P r o n o u n c e m e n t 22/07/2024 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre ( NFAC), Delhi, (i n short ‘the CIT( A) ’) dated 17.10.2023 for the Assessment Year 2017-18. 2. The brief facts of the case are that no return of income for A.Y. 2013-14 was filed b y the asse ssee. It transpired that the assessee had deposited cash of Rs.19,29,021/- in RBL Bank Ltd., Deesa B ranch, De esa during the demonetization period. The c ase was selected for scrutiny as Opera tion Clean Mone y ( ‘OMC ’) ITA No. 1054/Ahd/2023 [Ramabhai Dhudabhai Patel vs. ITO] A.Y. 2017-18 - 2 – case to verif y the source of cash dep osits. The AO held the cash deposit of Rs.11,26,133/- as unexplained and the rest of the a mount was co nsidered as explained. Accordingly, the assessment was co mpleted under Sec tion 144 of the Inco me Tax Act, 1961 (in short ‘the Act ’) on 27.12.2019 at total inco me of Rs.11,26,133/-. . 3. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which was decided by the CIT(A) vide the imp ugned order and the addition as made b y the AO has been confir med. 4. Now, the assessee is in appeal is before us. 5. The assessee has taken the following grounds in this appeal: “1. In law and in the facts and circumstances of the appellant's case, the Hon' CIT(A) has erred in upholding the addition made by the Ld. A.O u/s. 69A. 2. In law and in the facts and circumstances of the appellant's case, the Ld. CIT(A) has erred in confirming the levy of interest u/s. 234(a), 234(b), 234(c), 234(d).” 6. Shri Manthan Khokhani, the Ld. C ounsel for the assessee submitted that the source of c ash d eposits in the ban k account was the previous withdrawal of cash fro m the sa me bank account. He explained that the assessee had obtained loan fro m RBL B ank and the first tranc he of loan of Rs.1 0,95,836/- was de posited in the Bank account on 29.12.2015 whereas the 2 n d tranche of Rs.6,75,464/- was deposited on 12.04.2016. The assessee had periodically withdrawn cash fro m the said account for the purpose of purchase of land. Ce rtain advance was also given to ITA No. 1054/Ahd/2023 [Ramabhai Dhudabhai Patel vs. ITO] A.Y. 2017-18 - 3 – one of the sellers for this purpose. However, the tran saction did not materialize an d, therefore , the c ash as l ying with t he assessee was re -deposited in the bank acc ount during de monetization period. Thus, the source of the e ntire cash deposits during de monetization period was out of the earlier cash withdrawals made fro m the bank account itself. The Ld. AR submitted that the Ld. C IT( A) did not ad mit the ad ditional evidence brought on record in this regard during appeal proceeding and had rejected the explanation of the assessee on th e ground that sanc tion letter of loan obtained fro m the Bank was not furnished. He also submitted that no opportunity was a llowed b y the Ld. CIT( A) to bring on record any further evidence as r equired b y hi m and that his order was without correct appreciation of facts of the case. 7. Per contra, Shri Sanja y Jain, Sr . DR sub mitted that the assessee had changed his stand before the Ld. CI T(A), which was rightly r eje cted. He explained that the AO had allowed part relief out of total cash deposits after con sidering the bill for sale of agricultural produce sub mitted b y the assessee for the F.Ys. 2016-17 & 2015-16. Thus, the contention of the assessee before the AO was that the cash deposits were out of agricultural sale proceeds. On the o ther hand, the assessee had totall y changed his stand before the Ld. CI T( A) and submitted that cash deposits were out of earlie r cash withdrawal s. The Ld. S r. DR sub mitted that as the assessee had failed to s ubstantiate the cla i m of loan fro m RB L Bank, the additional evidences as filed bef ore the Ld. CIT( A) was rightly re jected b y hi m. ITA No. 1054/Ahd/2023 [Ramabhai Dhudabhai Patel vs. ITO] A.Y. 2017-18 - 4 – 8. We have carefull y considered the rival submissions and the materials on recor d. It is found that the AO had accep ted part of the cash deposits on the basis of the bills for sale of agriculture produce. The assessee had produced bills for Rs.6,39 ,063/- for F.Y. 2016-17 and of Rs.1,63,825/- f or F.Y. 2015-16, totaling to Rs.8,02,888/-, which was accepted by the AO. The bills pertaining to F.Y.2014-15 were reje cted by the AO on the ground that they were too old to be acceptable. Accordingly, th e AO had treated the cash deposit of Rs.8,02,888/- as explained and made addition for balance a mount of Rs.1 1,26,133/-. The a pproach of the AO cannot be accepted as full y correct. There is no dispute to the fact that the assessee was an a griculturist and he might not have properly maintained all the bills for all the yea r s. Rather than allowing relief only on the basis of bills, the AO should have exa mined the total land holding of the assessee and thereafter worked out the agriculture income a s derived therefrom. Be that as it ma y, the assessee had contended before the Ld. C IT( A) that the cash deposits during de monetization period were out of cash withdrawal made earlier f ro m the sa me account. It was also contended that certain loan a mount was sanctioned by RBL Bank which was credite d to the same bank account. The a mounts were explained to be withdrawn for purchase of agricultural land which ultimatel y didn’t materialize. The assessee has furnished the following stateme nt of deposits of loan proceeds in the bank account and subsequent cash withdrawals fro m the same bank accounts: ITA No. 1054/Ahd/2023 [Ramabhai Dhudabhai Patel vs. ITO] A.Y. 2017-18 - 5 – The Ld. C IT( A) did not accept the explanation of the assessee for the reason that no sanction letter of the RBL bank was submitted. Further that the e vidence for proposed purchase of a gricultural land was not supported by an y 3 r d part y evidence, such as, agree ment of sale. 9. It is found that the Ld. CI T( A) has rejected the evidences filed by the assessee on the presu mp tion that no bank gives loan for purchase of agricultural land. It is apparent fro m th e order of the CIT( A) that n o opportunity was provided to the assessee to furnish the sanction letter of the loan a mount b y the Ba nk as well as the other evidences as discussed in the order of the Ld. CI T( A). Further, the argu ment of cash deposit being out of previous cash withdrawals was made for the first ti me before the Ld. CI T( A) and the AO didn’t have any opportunity to exa mine such clai m of the assessee. We , t herefore, dee m it proper to set aside the matter to the file of the Jurisdictional AO to verify the contention of the ITA No. 1054/Ahd/2023 [Ramabhai Dhudabhai Patel vs. ITO] A.Y. 2017-18 - 6 – assessee regarding source of the cash deposits ma de during de monetization period being out of cash withdrawals made earlier fro m the sa me b ank account. The AO should also verif y the correctness of the clai m of the assesse regarding sanction of loan by RB L Bank as well as the correc tness of the clai m before the CIT( A) that an agr ee ment was made by the assessee wit h one Shri Ra meshbhai Patel regarding purchase of agricultural la nd, which ultimatel y did not materialize. This apart, the AO ma y also verify the total land holding of the assessee and work out how much agricultural income would have b een derived b y th e assessee. The AO should take a holistic view of the matter and the credit for cash available with the assessee should be allowed e ven if the bill for the entire a mount is not available with the assessee. Needless to mention, the assessee should be allowed a proper opportunity of bei ng heard and to bring on record the evidences in support of his contentions. 10. In the result, appeal preferred b y the assessee is allowed for statistical purposes. This Order pronounced on 22/07/2024 Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 22/07/2024 S. K. SINHA True Copy आदेश कᳱ ᮧितिलिप अᮕेिषत आदेश कᳱ ᮧितिलिप अᮕेिषतआदेश कᳱ ᮧितिलिप अᮕेिषत आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent. 3. संबंिधत आयकर आयुᲦ / Concerned CIT 4. आयकर आयुᲦ(अपील) / The CIT(A)- 5. िवभागीय ᮧितिनिध , आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad ITA No. 1054/Ahd/2023 [Ramabhai Dhudabhai Patel vs. ITO] A.Y. 2017-18 - 7 – 6. गाडᭅ फाईल / Guard file. आदेशानुसार आदेशानुसारआदेशानुसार आदेशानुसार/ BY ORDER, उप उपउप उप/सहायक पंजीकार सहायक पंजीकारसहायक पंजीकार सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद / ITAT, Ahmedabad