JIVLUBHAI SUKALUBHAI CHAUDHARY, Dhulia,PO.Vyara V. Income tax officer, Ward 3, Income Tax Office, Navsari

ITA 274/SRT/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6638 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-05-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 11-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Unexplained cash credit; Opportunity of being heard; Corroborative evidences; Set aside
• Section: 147; 148; 142(1); 250; 143(2); 69A

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.274/SRT/2024 Assessment Year: (2015-16) (Physical Hearing) Jivlubhai Sukalubhai Chaudhary, Dhulia, PO Vyara, Tal – Vyara, Dist – Tapi, 394650 Vs. The ITO, Ward – 3, Navsari èथायीलेखासं./जीआइआरसं./PAN/GIR No: AFKPC9192G (Appellant) (Respondent) Appellant by Shri Mehul Shah, CA Respondent by Shri J. K. Chandnani, Sr. DR Date of Hearing 13/05/2024 Date of Pronouncement /06/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the appellant emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 13.01.2024 by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘Ld. CIT(A)’] for the assessment year (AY) 2015-16. 2. The grounds of appeal raised by the assessee are as under: “1. On the facts and in the circumstances of the case as well as on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in re-opening assessment u/s 147 by issuing notice u/s 148 of the I.T. Act, 1961. 2. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in passing ex-parte order without giving reasonable and sufficient opportunity of being heard. 2 274/SRT/2024/AY.2015-16 Jivlubhai Sukalubhai Chaudhary 3. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in dismissing the appeal without passing speaking order. 4. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the actions of assessing officer in making addition of Rs.2,26,030/- on account of unexplained credits u/s 69A of the I.T. Act, 1961. 5. It is prayed that the assessment may please be quashed and/or addition made by the assessing officer may please be deleted or the matter may be please be set aside to the file of CIT(A) for fresh adjudication. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 3. The facts of the case in brief are that the assessee is a salaried person, did not file his return of income for AY.2015-16. The assessee’s case was re- opened for re-assessment u/s 147 after issuing notice u/s 148 dated 31.03.2021 but assessee failed to respond. There was no response to notice u/s 142(1). Ultimately, the assessee filed its return of income on 17.02.2022 declaring total income of Rs.2,71,510/-. Notice u/s 143(2) was issued on 21.02.2022. During the re-assessment proceedings, the case was transferred to NFAC and notice u/s 143(2) was issued again along with reasons recorded for re-opening of assessment u/s 147 of the Act. The assessee has made cash deposits and various credit entries totalling to Rs.24,17,024/- in his bank account. The Assessing Officer issued notices u/s 142(1) to the assessee on 27.12.2021, 10.01.2022 and 14.02.2022 in which the assessee was asked to provide explanations for each and credit entries totalling to Rs.20,74,094/-. Further, the Assessing Officer issued a show-cause notice along with draft assessment order to the assessee on 21.03.2022 which is reproduced at para 3 274/SRT/2024/AY.2015-16 Jivlubhai Sukalubhai Chaudhary no.20 of the assessment order page no.11. In response, the assessee supplied various details such as Form 8A and 7/12 and sample sales bills of sugarcane crops substantiating the agriculture income and provided explanations for the remaining amounts. Out of total proposed addition of Rs.20,74,094/- mentioned in the show-cause notice, the Assessing Officer was satisfied with assessee’s explanation provided towards the amount of Rs.18,48,064/-. Since, the assessee did not provide any explanation towards balance amount of Rs.2,26,030/-, the Assessing Officer made addition of Rs.2,26,030/- to the total income of the assessee. 4. Aggrieved by the order of Assessing Officer, the assessee filed an appeal before Ld. CIT(A). The Ld. CIT(A) observed that the assessee was a non-filer of return of income and the Assessing Officer found that there was deposit of Rs.24,17,024/- (cash deposits of Rs.2,08,000/- and credits of Rs.22,09,024/-) with State Bank of India (SBI). The assessee was able to furnish satisfactory explanation only to the extent of credits of Rs.21,09,994/- in the following manner viz: (i) Salary of Rs.3,42,930/-, (ii) Agricultural Income of Rs.15,09,311/-, (iii) Interest of Rs.53,159/-, (iv) Kisan Loan of Rs.2,90,000/- etc. aggregating the total of Rs.21,09,994/-. The assessee was unable to provide explanation for the balance credit of Rs.2,26,030/-. Before the Ld. CIT(A), the assessee has submitted that Assessing Officer has erred in making addition of Rs.2,26,030/- on account of unexplained credits u/s 69A of the Act. The Ld. CIT(A) found that assessee did 4 274/SRT/2024/AY.2015-16 Jivlubhai Sukalubhai Chaudhary not submit any documents/evidence despite adequate opportunities to produce relevant submissions in support of the claim made in grounds of appeal. The onus of explaining the source of all the deposits in the impugned year, to the satisfaction of the Assessing Officer, rested solely on the assessee which he failed to do. Further, in absence of explanation or supporting evidence, the Ld. CIT(A) confirmed the action of Assessing Officer in bringing to tax, the deposits of Rs.2,26,030/- as unexplained money u/s 69A of the Act. 5. Aggrieved by the order of Ld. CIT(A), the assessee is in appeal before this Tribunal. 6. The Learned Authorized Representative (Ld. AR) of the assessee argued that notice issued u/s 147/148 and the reasons recorded by the Assessing Officer were bad in law. The Ld. AR submitted that Assessing Officer although mentioned in the assessment order that notice u/s 148 was issued, however no notice u/s 148 was issued to the assessee; therefore, appeal of the assessee should be allowed on this score only. The Ld. AR also stated that reasons recorded by the Assessing Officer for reopening of assessment is bad in law, as the assessee has deposited the cash in the bank account, out of business receipts. The Assessing Officer should have conducted the enquiry whether the amount deposited in the bank account is the income of the assessee or not; however, the Assessing Officer did not conduct enquiry. The Ld. AR relied upon the judgments in the case of viz: (i) 5 274/SRT/2024/AY.2015-16 Jivlubhai Sukalubhai Chaudhary Navinchandra Amaidas Bhikha vs ITO, ITA No.50/SRT/2024, (ii) Smt. Vinatha Madhusudhan Reddy vs. ACIT, ITA No.257/Bang/2018, (iii) DCIT vs. Nikhil Nanda, ITA No.3644/Del/2013, (iv) ACIT vs. Baldev Raj Charla, (121 TTJ 366) (Del.). The Ld. AR submitted that assessee has agricultural land and therefore cash deposit was out of agricultural land. The assessee has withdrawn the amount from the bank account which is redeposited in the account. Therefore, addition should not have been made in the hands of the assessee, as the assessee has explained the sources of cash deposit. The Ld. AR also submitted that benefit of opening cash balance has not been granted to the assessee either by Assessing Officer or Ld. CIT(A). 7. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue relied on the order of Assessing Officer. 8. We have heard both the parties and perused record. It is seen that assessee that assessee has made cash deposits of Rs.2,08,000/- in his bank account. There were credit entries of Rs.22,09,024/- in the same account. The Assessing Officer asked the assessee to explain the source of cash and credit entries totalling to Rs.24,18,024/- in the bank account. After considering the reply of the assessee, the Assessing Officer accepted the source of cash and credit entries to the extent of Rs.18,48,064/- out of total credit and cash deposit of Rs.20,74,094/-. The explanation of the assessee regarding salary of Rs.3,42,930/-, agricultural income of Rs.15,09,311/-, interest of Rs.53,159/- from an end Krishi Loan of Rs.2,90,000/- was accepted 6 274/SRT/2024/AY.2015-16 Jivlubhai Sukalubhai Chaudhary by the Assessing Officer and the balance amount of Rs.2,26,030/- was not accepted. The same was added u/s 69A of the Act. The Ld. CIT(A) has confirmed the addition of Rs.2,26,030/- u/s 69A of the Act. The Ld. CIT(A) held that assessee has not explained the source of all the deposits to the satisfaction of the Assessing Officer and nothing prevented the assessee filing the relevant documents. Therefore, the Ld. CIT(A) sustained the addition made by the Assessing of Rs.2,26,030/-. Before us, the Ld. AR has stated that the lower authorities have not given credit for the opening cash balance. We find from the assessment order that addition was restricted to Rs.2,26,030/-. The Assessing Officer has accepted cash and credit entries of Rs.21,90,994/-. The assessee had provided evidence for agricultural income by submitting 7/12, Form 8A and sale bills of agricultural income. It is not the case of the Revenue that assessee has become an agriculturist only in the year under consideration. The assessee was having agricultural income in the preceding year also. In the current year, the agricultural income to the extent of Rs.15,09,311/- has been accepted. Therefore, we are of the view that the assessee would have earned substantial agricultural income in the past years and after meeting various expenses, there would be some savings to justify cash in hand i.e. opening cash balance as on 01.04.2014. Therefore, the explanation of the Ld. AR to allow credit of the opening balance is reasonable. After considering the facts in totality, we are of the view that the sum of Rs.2,26,030/- would be out of the opening cash balance and, 7 274/SRT/2024/AY.2015-16 Jivlubhai Sukalubhai Chaudhary therefore, it is no longer unexplained. We allow the credit for the opening cash balance to the above extent and direct the Assessing Officer to delete the addition. The ground is accordingly allowed. 9. Considering the facts that we have allowed full relief to the assessee on merit of the case and other grounds taken up by the assessee are not adjudicated because the same would be only academic in nature. 10. In the result, appeal of the assessee is allowed. Order is pronounced on 05/06/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 05/06/2024 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat