BHARATKUMAR M YADAV, MUMBAI V. ITO 19(1)(3),

ITA 3141/MUM/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1673 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Unexplained cash credit; Share purchase agreement; Opportunity of being heard; Principle of natural justice; Source of fund; Additional evidence
• Section: 143(3); 68

Judgement Text

B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.3141/ MUM/2014 ( / ASSESSMENT YEAR : 2008 - 09) MR. BHARATKUMAR M. YADAV 13 TH RADHABAI CHAWL, GOLIBAR ROAD, KHAR (E), MUMBAI 400051 / V. ITO 19(1)(3) MUMBAI ./ PAN : AAFPY0695N ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: NONE REVENUE BY : SHRI. D.G. PANSARI / DATE OF HEARING : 29.08.2018 / DATE OF PRONOUNCEMENT : 31 .08.2018 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE , BEING ITA NO. 3141/MUM/2014, IS DIRECTED AGAINST APPELLATE ORDER DATED 20.02.2014 PASSED BY LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) - 22 , MUMBAI (HEREINAFTER CALLED THE CIT(A)), FOR ASSESSMENT YEAR 2008 - 09, THE APP ELLATE PROCEEDINGS HAD ARISEN BEFORE LEARNED CIT(A) FROM ASSESSMENT ORDER DATED 27.12.2010 PASSED BY LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO) U/S 143 (3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) FOR AY 2008 - 09. 2. THE GROU NDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME - TAX APPELLATE TRIBUNAL, MUMBAI (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER: - ITA NO. 3141/MUM/2014 2 1. UNEXPLAINED CASH CREDIT U/S 68 OF I T ACT. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW THE LEARNED CIT(A) - 22 HAS ERRED IN CONSIDERING THE SUBMISSIONS PLACED ON RECORD & DISALLOWED RS. 14,08,300 / - OUT OF WHICH RS. 8,65,000 / - AS LOAN TAKEN FROM 5 PARTIES AS A SOURCE OF CASH DEPOSITED IN BANK. THE HONORABLE BENCH IS RE QUESTED TO CONSIDER THE FACT THAT NEITHER THE LEARNED A. O NOR THE HONORABLE CIT (A) - 22 DID NOT CONSIDERED & ACKNOWLEDGED THE MATERIAL ON THE RECORD AND THEREFORE YOUR HONORABLE ITAT MAY SET ASIDE THE ORDER AND TRANSFER THE CASE TO THE FILE OF THE A.O FOR V ERIFICATION OF ALL THE RECORDS THAT HAVE BEEN SUBMITTED DURING THE REMAND PROCEEDINGS AND APPELLATE PROCEEDINGS . 2. THE LEARNED CIT (A) - 22, ERRED WHILE CHARGING INTEREST U/ S 234A, 234B, 234C & 234D OF INCOME TAX ACT, WHICH MAY BE DELETED. 3. THE ASSES S EE PRAY & CRAVE YOUR HONOR TO ALLOW HIM TO ADD7 DELETE/ MODIFY ANY/ ALL GROUNDS OF APPEAL BEFORE THE MATTER IS BEING HEARD BY YOUR HONOR. 3. THE ASSESSEE IS IN THE BUSI NESS OF MANUFACTURING OF F ARSAN. T HE ASSESSEE HAD MADE SALE S AND PURCHASES WHIC H WERE STATED MAINLY TO BE IN CASH . T HERE WAS DEPOSITS OF CASH IN BANK TO THE TUNE OF RS. 16,38,800/ - AS PER AIR INFORMATION, OUT OF WHICH THE ASSESSEE WAS NOT ABLE TO EXPLAIN SOURCES OF CASH DEPOSITS TO THE TUNE OF RS.14,08,300/ - BEFORE THE AO WITH CRED IBLE AND SATISFACTORY EXPLANATIONS . IN THE OPINION OF THE AO , THE SAID DEPOSITS OF CASH IN BANK DOES NOT MATCHES WITH THE PURCHASE S MADE IN CASH VIS A VIS SALE S MADE IN CASH , WHICH LED TO THE ADDITION TO THE INCOME OF THE ASSESSEE TO THE TUNE OF RS. 14,08,300/ - AS AN UNEXPLAINED CASH CREDIT WHICH WAS DEPOSITED IN BANK ACCOUNT OF THE ASSESSEE U/S. 68 OF THE ACT, VIDE ASSESSMENT ORDER DATED 27.12.2010 PASSED BY THE AO U/S. 143(3) OF THE ACT. 4 . AGGRIEVED BY THE ASSESSMENT ORDER DATED 27 - 12 - 20 10 PASSED BY THE AO U/S 143(3) OF THE 1961 ACT , T HE ASSESSEE FILED FIRST APPEAL BEFORE LD. CIT(A) AND FILED CERTAIN ADDITIONAL EVIDENCE S WHICH WERE FORWARDED BY LEARNED CIT(A) TO THE AO FOR SUBMISSION OF REMAND REPORT KEEPING IN VIEW RULE 46A OF THE INCOM E - TAX RULES, 1962 . THE ITA NO. 3141/MUM/2014 3 LEARNED AO SUBMITTED ITS REMAND REPORT WHICH IS REPRODUCED AS HERE UNDER: - 'DURING THE YEAR UNDER CONSIDERATION, THE ASSESSES HAD DEPOSITED CASH IN HIS BANK ACCOUNT IN BHAVANI SAHAKARI BANK TOTALLING TO RS. 14,08,300/ - OUT OF THE T OTAL DEPOSIT OF RS.16,38,800/ - . THE ASSESSEE WAS ASKED TO FURNISH THE PROOF AND EVIDENCE OF SOURCE OF FUNDS FOR CASH DEPOSITED IN BANK ACCOUNTS. IN RESPONSE, THE ASSESSEE HAD TRIED TO PROVE THE SAME THROUGH LOAN RECEIPTS OF RS. 8,65,000/ - FROM 5 PARTIES, B UT FAILED TO FURNISH THE SOURCE OF CASH DEPOSITED IN HIS BANK ACCOUNT. THE ASSESSEE IS INVOLVED IN THE BUSINESS OF MANUFACTURING OF FARSAN. HE HAS SHOWN MORE OR LESS UNIFORM SALES AND PURCHASES MONTHWISE. THEREFORE, IT CANNOT BE SAID THAT IN A PARTICULAR M ONTH THERE WAS A HUGE SALE OF RS.5 - 10 LACS BECAUSE AVERAGE MONTHLY SAL E AND PURCHASE OF ASSESSEE IS APPROX, 50 TO 70 THOUSAND RUPEES ONLY. WHEREAS THE ASSESSEE IN THE MONTH OF AUGUST AND SEPT. 2007 HAS DEPOSITED MORE THAN RS.5,00,000/ - IN BANK AND AGAIN IN THE MONTH OF JANUARY AND FEBRUARY 2008 HE HAS DEPOSITED MORE THAN RS. 6,00,000/ - IN THE BANK AND SIMILAR AMOUNTS HAVE ALSO BEEN DEPOSITED IN OTHER MONTHS. THE MAJORITY OF PURCHASE AND SALES OF ASSESSEE ARE DONE ON CASH PAYMENT AND RECEIPT BASIS AND AS P ER BALANCE SHEET CREDITORS ARE ONLY RS.40,846/ - . THEREFORE, IT ALSO CANNOT BE ESTABLISHED THAT ASSESSEE HAS DEPOSITED ENTIRE SALES PROCEEDS OF RS. 9,99,520/ - IN BANK AND HAS NOT PAID FOR PURCHASE BECAUSE THE UNPAID CREDITORS AS ON 31.03.2008 ARE AT RS.40,8 46/ - ONLY AS AGAINST TOTAL PURCHASE OF RS. 7,13,250/ - FOR THE ENTIRE YEAR. THIS ONLY PROVES ONE THING THAT THE ASSESSEE HAS SOME OTHER SOURCE OF CASH GENERATION WHICH HE HAS NOT OFFERED FOR TAXATION AND TRIED TO EVADE TAX, AND INVESTED THAT AMOUNT IN SOM E UNEXPLAINED TRANSACTIONS AND THEREFORE RS. 14,08,300/ - IS TREATED AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE I. T.ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. NOW , THE ASSESSEE HAS SUBMITTED PAPER BOOK BEFORE YOUR HONOUR, WHICH CONTAINS THE ADDITIONAL EVIDENCES IN THE FORM OF MEMORANDUM OF UNDERSTANDING BETWEEN THE ASSESSEE AND RAMASHARE S. VISHWAKARMA, GAUTAM P. SINGH AND GOPAL R. SINGH FOR THE SALE OF HOUSE PROPERTY AT KHAR FOR WHICH THESE PARTIES HAVE GIVEN SOME ADVANCES. IN THIS REGARDS IT IS MENTIONED THAT ACCEPTING ANY ADDITIONAL EVIDENCE AT THIS STAGE WILL AMOUNT TO ACCEPTING OF ADDITIONAL EVIDENCE IN CONTRAVENTION TO RULE 46A OF THE I. T.RULES. THE RULE ITA NO. 3141/MUM/2014 4 46A(1) OF THE I. T. RULES, 1962 STIPULATES FOUR CONDITIONS REGARDING ADMISSIBILIT Y OF THE ADDITIONAL EVIDENCES WHICH ARE AS UNDER : - (A) WHERE THE A 0 HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS C A LLED UPON TO PRODUCE BY THE A O ; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE AO ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; OR (D) WHERE THE AO HAS MADE THE ORDER APPEALED AGAINST WITHO UT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. IN THE INSTANT CASE NONE OF THE ABOVE FOUR CONDITIONS ARE SATISFIED. THEREFORE SUBMISSION OF ADDITIONAL EVIDENCES AT THIS STAGE IS NOT IN COMPLIANCE TO RULE 46A(I) OF I. T.RULES. WITHOUT PREJUDICE TO THE ABOVE, DURING THE REMAND PROCEEDINGS VIDE LETTER DATED 14.10.2013, ASSESSES WAS CALLED FOR EXAMINING SUBMISSION MADE BEFORE THE LD. CIT(A). IN RESPONSE, SHRI V.A. MISHRA, C.A., THE AUTHORISED REPRESE NTATIVE OF THE ASSESSEE ATTENDED ON 21.10.2013 AND SUBMITTED THE SAME DETAILS WHICH WERE SUBMITTED BEFORE THE A.O. DURING T HE ASSESSMENT PROCEEDINGS IN ADDITION TO THE MOU BETWEEN THE ASSESSEE AND RAMASHARE S. VICHKARMA, GAUTAM P. SINGH AND GOPAL R. SINGH FOR THE SALE OF HOUSE PROPERTY AT KHAR FOR WHICH THESE PARTIES HAVE GIVEN SOME ADVANCES. HOWEVER, THE ASSESSEE HAS NOT SUBMITTED ANY DETAILS OR SOURCE OF CASH DEPOSITED IN THE BANK ACCOUNT AMOUNTING TO RS. 14,08,300/ - , IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSEE MAY BE DECIDED ON MERITS OF THE CASE.' 5. THE LD. CIT(A) FORWARDED COPY OF REMA ND REPORT FILED BY THE AO TO THE ASSESSEE FOR HIS COMMENT AND THE ASSESSEE MADE FOLLOWING SUBMISSIONS AS UNDER: - 'SIR, THE GROUND NO. 2 IS THE MAIN GROUNDS OF APPEAL AND REMAINING GROUNDS OF APPEAL ARE INCIDENTAL TO THE GROUNDS OF APPEAL NO. 2 AND THEREFORE NOT DISCUSSED IN DETAILS. SIR, WE BEHALF OF THE ABOVE APPELLANT WISH TO SUBMIT THE FOLLOWING: ITA NO. 3141/MUM/2014 5 1) LETTER OF CONFIRMATION OF THE PARTIES (ANNEXURE 1) WI TH COPY OF I. T. RETURN FILE. 2) BANK SUMMARY 3) CASH SUMMARY OF BUSINESS 4) PERSONAL - CASH SUMMARY & BALANCE SHEET (COMPILED NOW) 5) MEMORANDUM OF UNDERSTANDING 6) SHARE CERTIFICATE OF HOUSE PROPERTY 7) RETURN OF INCOME OF THE APPELLANT FOR A.Y. 20 08 - 09 TOGETHER WITH THE BALANCE SHEET AND PROFIT & LOSS A/C. FURTHER, THE ASSESSEE HAS A HOUSE PROPERTY AT KHAR IN THE RELEVANT AY THE ASSESSEE WENT INTO AN AGREEMENT WITH RAMASHREE VISKARMA , GAUTAM P. SINGH & GOPAL R. SI NGH PARTY FOR SALE OF HOUSE PROPE RTY AT KHAR FOR THAT PURPOSE THE PARTY HAVE GIVEN SOME ADVANCE AGAINST THE PROPERTY FOR WHICH PARTICULARS HAVE BEEN SUBMITTED TO THE AO. THE APPELLANT HAS SUBMITTED THE CONFIRMATIONS FROM THE PURCHASERS TO THE AO. HOWEVER, THE AO FAILED TO APPRECIATE THE S UBMISSIONS A ND CONSIDER IT WHIL E COMPLETING THE ASSESSMENT. ALL THE DOCUMENTS PERTAINING TO THE RECEIPT OF THE AMOUNT FROM THE PARTIES ARE SUBMITTED HERETO TO YOUR GOODSELF FOR YOUR VERIFICATION AND RECORDS FOR YOUR KIND CONSIDERATION. FURTHER, WE ON BEH ALF OF THE ASSESSEE SUBMIT THAT WHILE APPEARING BEFORE THE AO THE APPELLANT HAS EXPLAINED THE SOURCE OF CASH BEING DEPOSITED INTO THE BANK TOGETHER WITH THE CONFIRMATION OF THE PARTIES AND THE COPY OF THE INCOME - TAX RETURN BEING FILED BY THE AFORESAID PART IES WITH A VIEW TO EXPLAIN THE: 1. IDENTITY OF THE PERSON 2. THE GENUINENESS OF THE TRANSACTION 3. THE CAPACITY OF THE PERSON TO INVOKE THE PROVISION OF SEC.68 OF THE IT ACT, 1961, THE AO IS BOUND TO MAKE INQUIRIES BEFORE MAKING ANY ADDITIONS AND WIL L BE FAIL TO DISCHARGE HIS DUTIES IF NO PROPER INQUIRY IS BEING MADE BEFORE MAKING UP OF HIS MIND OF INVOKING OF SEC. 68 AND MAKING ADDITIONS TO THE DECLARED INCOME AS UNEXPLAINED CREDIT. FURTHER, IT IS ALSO WELL ESTABLISH THAT NO ADDITIONS CAN BE MADE U/S.68 IF ASSESSEE FURNISHES ACKNOWLEDGEMENT OF INCOME TAX RETU RN OF PERSONS WHO ADVANCE MONEY. WE RELY ON THE FOLLOWING DECISIONS : - (I) ACITVS. M/S.KIRAN PALSINGH (ITAT - DELHI) (II) K.S. KANNAN KUNHI VS. CIT ITA NO. 3141/MUM/2014 6 WE ON BEHALF OF THE ASSESSEE SUBMIT THAT THE SUBMISSION HEREBY MADE TO YOUR GOODSELF FOR YOUR VERIFICATION, CONFIRMATION, RECORD AND KIND CONSIDERATION CLEARLY ESTABLISHES AND EXPLAINS THE SOURCE OF DEPOSITS INTO HIS BANK ACCOUNT. FURTHER, WITHOUT PREJUDICE, WE SUBMIT THAT THE AO HAS REFER RED THAT THE AMOUNT WAS DEPOSITED IN THE BANK AND THE CREDITS WERE MADE IN THE BANK PASSBOOK AND NET THE BOOKS OF ACCOUNTS OF THE APPELLANT. WE SUBMIT THAT BANK PASS - BOOK IS NOT BOOKS OF ACCOUNTS FOR THE PURPOSE OF SEC. 68 AS HELD IN CIT PUNE VS. BHAICHAND H. GHANDHI 141 ITR 67 BOMBAY, THAT THE BANK PASSBOOK SUPPLIED BY THE BANK TO THE ASSESSEE CANNOT BE REGARDED AS THE BOOKS OF THE ASSESSEE. THEREFORE, CASH CREDIT FOR THE PREVIOUS YEAR SHOWN IN THE ASSESSEE'S PASS BOOK BUT NOT SHOWN IN THE CASH BOOK DOES N OT FALL IN WITHIN THE AMBIT OF SEC.68OFTHEL.T.ACT, 1961. ASSESSEE CAN FURNISH ALTERNATIVE EXPLANATIONS : SECTION 68 PROVIDES THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXP LANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ITO, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME - TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THE SECTION, ON A PROPER C ONSTRUCTION, DOES NOT DEBAR THE ASSESSEE FROM OFFERING ALTERNATIVE EXPLANATIONS AND IF EITHER OF THEM IS ACCEPTED, THE CASH CREDIT CANNOT BE CHARGED AS THE INCOME OF THE ASSESSEE. THEREFORE, AN ASSESSEE CAN FURNISH ALTERNATIVE EXPLANATIONS, AND IF ANY ONE OF THEM IS ACCEPTED, THE CASH CREDIT CANNOT BE CHARGED AS THE INCOME OF THE ASSESSEE. FURTHER, PROPER ENQUIRY MUST BE MADE BY A.O. BEFORE MAKING ANY ADDITION U/S.68: THE AO MUST MAKE PROPER ENQUIRY BEFORE MAKING ANY ADDITION U/S.68. KHANDELWAL CONSTRUCTI ONS VS. CIT 227 ITR 900 (GAU.) FURTHER, IT IS ALSO CLEARLY ESTABLISHED FACT THAT THE ASSESSEE IS LIABLE TO EXPLAIN THE SOURCE OF THE CREDIT IN HIS BOOKS OF ACCOUNTS MAINTAINED BY HIM FOR A PREVIOUS YEAR RELEVANT TO THE CURRENT ASSESSMENT BUT HE IS UNDER NO OBLIGATION TO EXPLAIN THE SOURCE OF THE SOURCE. IN THE GIVEN CASE, THE APPELLANT HAS EXPLAINED BEYOND ANY DOUBT THE SOURCE FROM WHERE THE CASH HAS DEPOSITED INTO THE BANK ACCOUNT AND ALL THE DOCUMENTARY EVIDENCE IN SUPPORT IF GROUND OF APPEAL IS BEING FORWARDED TO YOUR GOODSELF. WE ON BEHALF OF THE APPELLANT PRAY YOUR GOODSELF TO CONSIDER THE SUBMISSION AND DELETE THE ADDITION BEING MADE BY AO AS IT IS ITA NO. 3141/MUM/2014 7 AGAINST THE LAW AND NATURAL JUSTICE TO THE APPELLANT AND COULD RESULT INTO HEAVY FINANCIAL DIFFICUL TIES . THE ASSESSEE HAS ALSO SUBMITTED CASH FLOW STATEMENTS BEFORE LEARNED CIT(A) TO RECONCILE CASH DEPOSITS IN BANK WITH CASH AVAILABLE WITH THE ASSESSEE TO ENABLE IT DEPOSIT THE SAME WITH ITS BANK TO CONTEND THAT NO ADDITIONS ARE WARRANTED IN THE HAND S OF THE ASSESSEE. THE ASSESSEE HAS CONTENDED FIRSTLY THAT CASH WITHDRAWAL FROM BANK WAS IN - FACT RE - DEPOSITED WITH ITS BANK. THE SECOND MAIN SOURCE OF CASH FOR DEPOSIT IN BANK IS STATED TO BE AN CASH ADVANCE RECEIVED AGAINST PROPOSED SALE OF FLAT ON SIGNING OF MOU. THE ASSESSEE HAD CLAIMED THAT THE ASSESSEE RECEIVED CASH ADVANCES TO THE TUNE OF RS. 7,00,000/ - ON SIGNING OF MOU AGAINST PROPOSED SALE OF FLAT SITUATED AT FLAT NO. 16, SHRI CHAITANAYA CO - OPERATIVE HOUSING SOCIETY LIMITED TO THREE PERSONS FOR TOTAL CONSIDERATION OF RS. 30,00,000/ - . THE SAID SALE OF THE FLAT WAS PROPOSED TO BE COMPLETED BY 30.09.2009. THE ASSESSEE LED ADDITIONAL EVIDENCES BEFORE LEARNED CIT(A) TO SUPPORT AND SUBSTANTIATE I TS CONTENTIONS AS UNDER: - 1) LETTER OF CONFIRMATION OF THE PARTIES (ANNEXURE 1) WITH COPY OF I. T. RETURN FILE. 2) BANK SUMMARY 3) CASH SUMMARY OF BUSINESS 4) PERSONAL - CASH SUMMARY & BALANCE SHEET (COMPILED NOW) 5) MEMORANDUM OF UNDERSTANDING 6) SHARE CERTIFICATE OF HOUSE PROPERTY 7) RETURN OF INCOME OF THE APPELLANT FOR A.Y. 2008 - 09 TOGETHER WITH THE BALANCE SHEET AND PROFIT & LOSS A/C. THE LD. CIT (A) REJECTED THE CONTENTION S OF THE ASSESSEE BY DISBELIEVING THE ENTIRE STORY AS SETUP BY THE ASS ESSEE . T HE ADDITION AL EVIDENCES IN THE FORM OF MO U AND CONFIRMATION S WITH RESPECT TO PROPOSED SALE OF FLAT WHICH WERE FILED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS WERE HELD TO BE AN AFTER - THOUGHT BY LEARNED CIT(A) TO DISMISS THE APPEAL OF THE ASSESSEE . THE ASSESSEE APPEAL WAS , THUS, ITA NO. 3141/MUM/2014 8 DISMISSED BY LD. CIT(A) , VIDE APPELLATE ORDER DATED 20.02.2014 PASSED BY LEARNED CIT(A) . 6 . AGGRIEVED BY THE APPELLATE ORDER DATED 20 - 02 - 2014 PASSED BY LEARNED CIT(A), THE ASSESSEE H AS NOW COME IN AN APPEAL BEFORE THE TRIBUNAL . N ONE APPEARED ON BEHALF OF THE ASSESSEE WHEN THE APPEAL WAS CALLED FOR HEARING BEFORE THE BENCH . THE LD. DR RELIED UPON THE APPELLATE ORDER DATED 20 - 22 - 104 PASSED BY LD. CIT(A) . THE LEARNED DR DREW OUR ATTENT IONS TO THE APPELLATE ORDER PASSED BY LD. CIT(A) AND PRAYED THAT THE APPEAL OF THE ASSESSEE BE DISMISSED . 7. WE HAVE HEARD LD. DR AND CAREFULLY PERUSED THE MATERIAL ON RECORD INCLUDING ORDERS OF THE AUTHORITIES BELOW . W E HAVE OBSERVED THAT THE ASSESSE E IS IN THE BUSINESS OF MANUFACTURING OF FARSAN . THE ASSESSEE IS MAINLY MAKING SALE S AND PURCHASES IN CASH OF FARSAN. THE ASSESSEE MADE CASH DEPOSITS IN BANK ACCOUNTS TO THE TUNE OF RS. 16,38,800/ - DURING PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR WHICH WAS REPORTED IN AIR DATA BASE OF THE REVENUE. THE AO FOUND MISMA TCH OF CASH DEPOSITS IN BANK OWING TO CASH SALES AS CLAIMED BY THE ASSESSEE VIS - A - VIS CASH PURCHASES CLAIMED TO BE MADE BY THE ASSESSEE, WHICH LED TO THE ADDITION S TO THE TUNE OF RS. 14,08,300/ - IN THE HANDS OF THE ASSESSEE BY THE AO IN AN ASSESSMENT ORDER DATED 27.12.2010 PASSED U/S 143(3) OF THE 1961 ACT . THE ASSESSEE DURING APPELLATE PROCEEDING BEFORE LEARNED CIT(A) TRIED TO EXPLAIN THE SAID CASH DIFFERENTIAL/MIS MATCH BETWEEN CASH SALES AND CASH PURCHASES WHICH WAS DEPOSITED IN BANK ACCOUNT BY SUBMITTING CASH FLOW STATEMENT AND A CLAIM IS MADE THAT AN ADVANCE AMOUNT OF RS. 7,00,000/ - WAS RECEIVED IN CASH ON SIGNING OF MOU WRT TO PROPOSED SALE OF FLAT NO. 16, SHRI CHAITANAYA CO - OPERATIVE HOUSING SOCIETY LIMITED TO THREE PERSONS . THE ASSESSEE ALSO CLAIMED TO HAVE RECEIVED CERTAIN LOANS . THE EVIDENCES WERE LED BEFORE LEARNED CIT(A) BY WAY DOCUMENTS/EVIDENCES AS UNDER : ITA NO. 3141/MUM/2014 9 1) LETTER OF CONFIRMATION OF THE PARTIES (ANN EXURE 1) WITH COPY OF I. T. RETURN FILE. 2) BANK SUMMARY 3) CASH SUMMARY OF BUSINESS 4) PERSONAL - CASH SUMMARY & BALANCE SHEET (COMPILED NOW) 5) MEMORANDUM OF UNDERSTANDING 6) SHARE CERTIFICATE OF HOUSE PROPERTY 7) RETURN OF INCOME OF THE APPELLANT FOR A.Y. 2008 - 09 TOGETHER WITH THE BALANCE SHEET AND PROFIT & LOSS A/C. THE LD. CIT(A) DISCARDED THE ENTIRE STORY AS SET UP BY THE ASSESSEE AS AN AFTERTHOUGHT . IT IS A MATTER OF RECORD THAT BOTH THE AO IN REMAND PROCEEDINGS AS WELL LEARNED CIT(A) DID NO T MADE ANY ENQUIRY AS WELL VERIFICATIONS AS TO EXPLANATIONS SUBMITTED BY THE ASSESSEE BEFORE DISCARDING THE EVIDENCES FILED BY THE ASSESSEE MERELY BY TERMING THE SAME AS AN AFTERTHOUGHT. BEFORE US , THE ASSESSEE HAS INFACT RAISED THIS GROUND THAT THE EVI DENCES FURNISHED BY THE ASSESSEE WERE NOT DULY CONSI DERED BY THE AUTHORITIES BELOW VIDE GROUND NO 1 FILED IN MEMO OF APPEAL FILED WITH THE TRIBUNAL AND PRAYER IS MADE TO SET ASIDE THE ISSUES TO THE FILE OF THE AO FOR VERIFICATION OF THE EVIDENCES FILED BY THE ASSESSEE. WE HAVE CAREFULLY GONE THOUGH THE APPELLATE ORDER S OF THE LD. CIT(A) AND AS OUTLINED ABOVE, IT IS A MATTER OF RECORD THAT NO ENQUIRY OR VERIFICATION WAS DONE BY EITHER LEARNED CIT(A) AND/OR AO DURING REMAND PROCEEDINGS WITH RESPECT TO ADDITIO NAL EVIDENCES FILED BY THE ASSESSEE AND EXPLANATIONS SUBMITTED BY THE ASSESSEE. K EEPING IN VIEW ENTIRE FACTUAL MATRIX OF THE CASE AND IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE ARE OF THE CONSIDER ED VIEW THAT THE EVIDENCES AND EXPLANATIONS AS WERE FURNISHED BY THE ASSESSEE BEFORE LEARNED CIT(A) NEED TO BE PROPER LY ENQUIRED INTO AND VERIFIED BY THE AO AND AFTER DUE VERIFICATION AND ENQUIRY , THE MATTER NEED TO BE ADJUDICATED AFRESH DENOVO BY THE AO ON MERITS IN ACCORDANCE WITH LAW. THUS , WE ARE SETTI NG ASIDE AND RESTO RING THE ISSUE S ARISING IN THIS APPEAL TO THE FILE OF AO FOR DENOVO ADJUDICATION ON MERITS IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT PRIMARY ONUS IS ON THE ASSESSEE TO PROVE AND SUBSTANTIATE THE SOURCES OF CASH DEPOSIT IN ITS BANK A CCOUNTS. THE AO ITA NO. 3141/MUM/2014 10 SHALL GRANT PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW. THE EVIDENCES AS ARE LED BY THE AO IN ITS DEFENCE SHALL BE ADMITTED BY THE AO IN THE INTERES T OF JUSTICE. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. WE ORDER ACCORDINGLY. 8 . IN THE RESULT, T HE APPEAL OF THE ASSESSEE IS ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 .08.2018 31 .08.2018 SD/ - SD/ - ( MAHAVIR SINGH ) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 31 .08.2018 NISHANT VERMA SR. PRIVATE SECRETARY COPY TO 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) CONCERNED, MUMBAI 4 . THE CIT - CONCERNED, MUMBAI 5 . THE DR BENCH, 6 . MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI