BOER AND FITCH RETAILS PRIVATE LIMITED, TIRUPUR V. THE INCOMETAX OFFICER, WARD-2(2), TIRUPPUR

ITA 21/CHNY/2023

AI Insights

The case involves Boer and Fitch Retails Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) confirming the addition of Rs.39,90,000 to the assessee's income. This amount represented cash deposits made during the demonetization period, which the AO added to the income under section 69A of the Income Tax Act, 1961, due to unexplained sources. The CIT(A) dismissed the appeal, labeling the assessee's explanations as a 'make believe story'. The Tribunal, upon reviewing the additional evidence and submissions, decided to remand the case back to the AO for a detailed examination of the new evidence.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135086 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-02-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 08-01-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 69A

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ (एस एम सी) ᭠यायपीठ,चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ (SMC) BENCH, CHENNAI ᮰ी महावीर ᳲसह, उपा᭟यᭃ के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT आयकर अपील सं./ITA No.: 21/CHNY/2023 िनधाᭅरण वषᭅ/Assessment Year: 2017-18 Boer and Fitch Retails Pvt. Ltd., No.621, Athalthottam Veerapandi Post, Tirupur – 641 605. PAN: AAGCB 6360D Vs. The Income Tax Officer, Ward 2 (2), Tirupur. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Miss. N. V. Lakshmi, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri AR.V. Sreenivasan, Addl.CIT सुनवाई कᳱ तारीख/Date of Hearing : 27.02.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 27.02.2023 आदेश /O R D E R This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in Appeal No.CIT(A), Coimbatore -3/10429/ 2019-20 dated 12.11.2022. The assessment was framed by the Income Tax Officer, Ward 2(2), Tirupur for the assessment year 2017-18 u/s.144 of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 20.11.2019. - 2 - ITA No.21/Chny/2023 2. The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of AO in making addition of cash deposits in the bank account of the assessee by holding that there was no source explained by assessee. Against this, assessee filed this appeal before Tribunal and raised the following Ground No.2:- 2. a) The Honble Commissioner of Income Tax (Appeals) failed to appreciate that, the cash deposits made in the bank account of the Appellant were made only out of business funds of the Appellant there was NO other source available to the Appellant. b) The Hon'ble Commissioner of Income Tax (Appeals) failed to appreciate that, the provisions of section 69A r.w.s. 115BBE cannot be invoked, considering the facts and circumstances in the case of the Appellant. c) Without prejudice to the above, the Commissioner of Income Tax (Appeals) ought to have restricted the addition only to the extent of the profit element embedded therein. d) The Hon'ble Commissioner of Income Tax (Appeals) ought not to have disregarded the written submission and additional evidence furnished before him, including the cash book and confirmation letter of SD Cotton Clothing Company India Pvt Ltd. 3. I have heard rival contentions and gone through facts and circumstances of the case. Brief facts are that the assessee company made cash deposits of Rs.40,02,000/- including cash - 3 - ITA No.21/Chny/2023 deposit of Rs.39,90,000/- during demonetization period in the bank account maintained with IDBI Bank, Palladam Road Branch, Veerapandi Post, Tirupur. As there was no response from assessee despite opportunity was given and despite inspector was sent to the business premises of the assessee the assessee did not attend and therefore, ex-parte assessment was framed u/s.144 of the Act, making addition of Rs.39,90,000/-. Aggrieved, assessee preferred appeal before CIT(A). 4. Before CIT(A), the assessee filed confirmation from SD Cotton Clothing Company India Pvt. Ltd., claimed to have purchased goods worth Rs.39,50,000/- on 25 th May, 2016, 29 th May, 2016 and 1 st June, 2016 on credit. The CIT(A) also noted that the amount of Rs.39,50,000/- was immediately transferred after cash deposit of Rs.39,90,000/- on 21.12.2016. According to CIT(A), this is a make belief story and without admitting the two new evidences i.e, cash book and confirmation account from SD Cotton Clothing Company India Pvt. Ltd., dismissed the appeal of assessee confirming the addition of Rs.39,90,000/- made by AO u/s.69A of the Act. Aggrieved, now assessee is in appeal before the Tribunal. - 4 - ITA No.21/Chny/2023 5. Now, before me the ld.counsel for the assessee drew my attention to petition filed under Rule 46A of the Income Tax Rules, 1962 submitting the following details:- 1. Computation of income and ITR uploaded. 2. Financial statements for the impugned year 3. Cash book 4. Bank Statements 5. Confirmation from SD Cotton Clothing Company India P. Ltd. 6. Submission made before passing of assessment order 7. Medical certificate evidencing ill health due to which the director could not respond to the notice u/s.142(1) of the Act. The ld.counsel now stated that these are vital evidences to decide the issue. Hence, the same be admitted and may be referred back to the file of the CIT(A) for re-deciding the issue. 6. When this was confronted to ld. Senior DR, he could not controvert the fact situation but ultimately stated that in case matter is going back, the same should go back to the AO because the AO will be able to appraise the facts because assessment is ex-parte and no representation was made before AO. 7. Going through the submissions of both the sides and documents filed before CIT(A) and before the Tribunal now, I’m of - 5 - ITA No.21/Chny/2023 the view that let the matter be go back to the file of the AO to re-decide the issue afresh. Needless to say, the AO will examine the evidences as noted above and thereafter will decide the issue according to law. In term of the above, the appeal of the assessee is allowed for statistical purposes. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 27 th February, 2023 at Chennai. Sd/- (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 27 th February, 2023 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ /CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF.