Shri Ramesh Oswal, Jodhpur V. ITO, Ward-3(1), Jodhpur

ITA 461/JODH/2023

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 4941 (ITAT-JODHPUR)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-03-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 21-11-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREM PRAKASH MEENA
• Assessee Lawyers: PRAVEER LODHA
• Section: 144; 143(3); 142(1); 143(2); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR(DB). BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. No. 461/Jodh/2023 Assessment Year: 2017-18 Shri Ramesh Oswal A-277, Shastri Nagar, Jodhpur [PAN: AAEPO 0013 H] (Appellant) Vs. ITO, Ward-3(1), Jodhpur (Respondent) Appellant by Sh. Praveer Lodha, C.A. Respondent by Shri Prem Prakash Meena, Sr. DR Date of Hearing 11.03.2024 Date of Pronouncement 12.03.2024 ORDER Per:DR. S. Seethalakshmi, JM: This appeal filed by assessee is arising out of the order of the ld. CIT(A), National Faceless Appeal Centre, Delhi dated 27.10.2023 [here in after “ld.CIT(A)(NFAC)”] for assessment year 2017-18, which in turn arise from the order dated 07.12.2019 passed under section 143(3) of the Income Tax Act (here in after “Act”) by the AO. 2. In this appeal, the assessee has raised following grounds: - I.T.A. No.461/Jodh/2023 Ramesh Oswal vs. ITO 2 “ 1. Addition of Rs. 5210000/- disclosed in books of account proves itself the sources, has been added u/s 69A ignoring the facts that the books are adudited and charge tax u/s 115BBE. 2. The Hon’ble CIT(A) in his order has argued over the stock position, whereas he was having no base to decide, The appellant has not been given any opportunity over his view on stock or purchases, whereas the total books of accounts including stock registers has been provided for verification. The Ld. CIT(A) have not comment over the irregularities in the books of account. While passing order, the ld. CIT(A) has considering the ground of appeal but ignore the statement of facts and evidence made available while hearing. 3. The ld. AO has also not consider any evidences, regarding audited balance sheet, previous data of sales, ratios, purchases, etc available on record or find any irregularities, no point any find which attracts 69A, the amount was already exists in the books of account and duly audited in time and provided to department. 3. Brief fact of the case are that the return of income for assessment year 2017-18 was e-filed on 21.10. 2017 declaring total income of Rs. 10,07,950/-. The case was selected for scrutiny u/s 143(3) of the I.T. Act. 1961 by CASS First notice u/s 143(2) of the IT Act was issued on 10.08.2018. There after the fresh notices u/s 142(1) of the IT. Act, 1961 were issued from and the assessee was requested to furnish relevant details/information during the assessment proceedings online electronically through his E-filling account in incometaxindiaefilling gov.in. The case was selected for scrutiny u/s 143(3) of the IT Act, 1961 by CASS and as compete scrutiny is and the issues identified for examination as per CASS was "Cash Deposit During the year”. The assessee has not filed any details as called for in response to several notices issued in this assessment proceedings which are listed in following paras of this order. In view of this Non-Compliance section 144 of the IT Act is invoked. The assessee I.T.A. No.461/Jodh/2023 Ramesh Oswal vs. ITO 3 has not filed any details whatsoever in this assessment proceedings therefore as per provisions of Section 144(1)(b) of Income Tax Act, 1961, if the assessee fails to comply with terms of a notice issued u/s 142(1), the Assessing Officer to gather relevant material and to make the assessment of the total income to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment. The assessee filed the return on 21.10.2017 along with audit report of wholesale business of Tea trading in the name of M/s ASL Tea Co. the turnover of more than Rs. 3.77 crores during the year under appeal. The assessee has collected cash and deposited into bank out of which Rs. 52.10 laces was deposited into bank during demonetization period in current currency as well as in demonetized currency and in response to inquiry from department for the deposit of said amount of Rs. 52.10 lacs, assessee has duly e-filed detailed reply for the such individual collection with type of currency deposited into bank and the assessee admitted/accepted by the assessee in ITR filed by the assessee and the ld. AO noted that the assessee was found owner of the money but has not offered any acceptable and cogent explanation regarding the source of such money found in its bank accounts. The Income earned during the year has not been offered and taxes due thereupon has not been paid and the amount of Rs. 52,10,000/- added in the total income of the assessee as per section 69A of the I.T. Act, 1961. I.T.A. No.461/Jodh/2023 Ramesh Oswal vs. ITO 4 4. Aggrieved from the order of the assessing officer, assessee preferred an appeal before the ld. CIT(A). A propos to the grounds of the appeal so raised by the assessee, the relevant finding of the ld. CIT(A) is reiterated here in below:- “Appeal findings: 4.1 Appeal Notices were issued to the assessee on 29.12.2020, 29.08.2022, 06.10.2023 fixing the case for 05.01.2021, 13.09.2022, 23.10.2023. The assessee has replied on 08.09.2022 and 23.10.2023. 4.2 The only ground taken by the assessee is that Assessing Officer has erred in law and in facts while making an addition of Rs. 52,10,000/- as unexplained money U/s 69A of the IT Act under the facts and circumstances of the case. 4.2.1 The AO has mentioned in the assessment order that In the present case, the assessee had deposited cash appearing in the bank account of amounting to Rs. 52,10,000/-, the same is treated as unexplained money. The assessee found to be the owner of the Money appearing in bank accounts, as details obtained from the bank. The assessee was found owner of the Money but has not offered any acceptable and cogent explanation regarding the source of such money found in its bank accounts. The income earned during the year has not been offered and taxes due there upon has not been paid. The amount of Rs. 52,10,000/- is hereby added in the total income of the assessee as per section 69A of the IT Act, 1961. 4.2.2 I have gone through the assessment order and record available. I have noticed that the assessment order has been passed u/s 144 because of noncompliance of the assessee during the assessment proceedings. The following notices were issued by AO which remained un-complied by the assessee and he only sought adjournment. The list of opportunities given by AO and not complied by assessee are as below: S. No. Section Date 1. 143(2) 10.08.2018 2. 142(1) 29.08.2019 I.T.A. No.461/Jodh/2023 Ramesh Oswal vs. ITO 5 3. 142(1) 24.09.2019 4. 142(1) 07.10.2019 5. 142(1) 21.10.2019 4.2.3 In my opinion, it is a case of high sales during demonetization period. As per appellant, the amount deposited in the bank account as above represent sales. In the entire submission given during the appellate proceedings, it has not been demonstrated that the stock of goods items was also increased with the sales. The link between the stock of goods and sales in a business is a fundamental aspect of inventory management and overall business operations. Stock, or inventory, refers to the goods or products a company holds for the purpose of resale. Sales, on the other hand, represent the revenue generated by selling these goods to customers. The relationship between stock of goods and sales is important to prove the genuineness of sales specifically in case of high sales. Maintaining an appropriate level of stock is essential to meet customer demand. When stock is low and sales are high, it can lead to false sales claims, whereas excess stock can tie up capital and increase carrying costs. Generally, Sales are the primary source of revenue for the businesses. And the goal is to sell inventory to customers at a price that covers the cost of goods sold and generates a profit. 4.2.4 Further, The relationship between stock and sales also affects inventory turnover. High inventory turnover indicates that goods are selling quickly, which is generally desirable as it reduces holding costs and ties up less capital. Except Some businesses stock to align with seasonal demand or trends in the market. The stock of goods and sales in a business are closely interlinked. Inventory which ensures that stock levels align with sales, is crucial for, maximizing revenue, and controlling costs. 4.2.5 Appellant has not provided any additional information in this regard during the appeal proceedings to show that excess tea or the saleable items were purchased to boost sales during the demonstration period or any comparison with the same periods during previous years has been demonstrated. No purchase bills of trading goods of demonetisation period have been produced to go with high sales during demonetisation period. 5. Hence due to want of genuine explanation along with evidence the appeal of the assessee is dismissed.” 5. During the course of hearing, the ld. AR for the assessee prayed that the Id. CIT(A) ex-parte order and the ld. AO has not considered the correct facts, I.T.A. No.461/Jodh/2023 Ramesh Oswal vs. ITO 6 assessee was not provided adequate opportunity of being heard. Thus, the assessee may be provided one more opportunity to advance his arguments/submissions before the ld. AO in the interest of equity and justice as the sales is already recorded in the books and separately made addition. 6. Per contra, ld. DR objected to the prayer of the assessee and submitted that even the assessee did not represent case before the ld. AO and CIT(A) both stage and now there are praying for equity and justice. Therefore, in that case if the Bench feels the matter may be restored to the file of the Assessing Officer. 7. We have heard both the parties and perused the materials available on record. The Bench noted that it is an ex-parte before the Ld CIT(A) and before the ld. AO the correct facts of the case is that the cash deposited is from the sales proceeds has not been considered during the assessment proceedings. The ld. CIT(A) observed that the additional information has not been submitted to show that excess tea or the saleable items were purchased to goods during the demonetization period or any comparison with the same periods during previous years has been demonstrated. However, the Bench feels that the assessee could not advance his arguments/submissions to contest the case before the lower authorities and we considered the prayer to give one more opportunity to submit the evidences concerning the issue in question of deposit I.T.A. No.461/Jodh/2023 Ramesh Oswal vs. ITO 7 of cash and its source. With grounds so raised by the assessee, to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld. AO. 8. Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. AO independently in accordance with law. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on. 12/03/2024. Sd/- Sd/- (Rathod Kamlesh Jayantbhai) (DR. S. Seethalakshmi) Accountant Member Judicial Member Santosh (On Tour) Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order