M/s. Swathi Trading Co, Bengaluru V. Income-Tax officer, Ward-3(2)(3), Bengaluru

ITA 527/BANG/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6643 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-10-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 23-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 144; 142(1); 234B; 143(2); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA No. 527/Bang/2023 Assessment Year : 2017 – 18 M/s. Swathi Trading Co., No. 38 . 33, 1 st Cross, Nayandahalli West Layout, Bangalore North, Chandra Layout, Bangalore – 560 040. PAN: ABYFS4155P Vs. The Income Tax Officer, Ward – 3(2)(3), Bengaluru. APPELLANT RESPONDENT Assessee by : Shri Kashinath Kalmath, Advocate Revenue by : Shri Subramanian .S, JCIT (DR) Date of Hearing : 11-10-2023 Date of Pronouncement : 11-10-2023 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal is filed by assessee against order dated 31.05.2023 passed by NFAC for A.Y. 2017-18 on following grounds of appeal: Page 2 of 5 ITA No. 527/Bang/2023 Grounds of Appeal Tax effect relating to each Ground of appeal (see note below) 1. The Learned Commissioner of Income Tax (Appeals) erred in passing an order of ex-party u/s.250 of the Income Tax Act for the assessment year 2017-18 in the appellant's case and order is not sustainable in law. Rs.48,89,557/- 2. The Learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.43,96,000/- being amount deposited in cash during demonetisation period. Rs.32,97,000/- 3. The Learned Commissioner of Income Tax (Appeals) erred affirming the conclusion of the learned Income Tax Officer that the cash deposits are out of acceptance of cash of demonetised currency. . 4. The Learned Commissioner of Income Tax (Appeals) erred in upholding the addition u/s.69A of the Act without proper appreciation of facts. 5. Learned Commissioner of Income Tax (Appeals) erred in confirming the additions made u/s 69A of the Act, since the Assessing Authority rejected the books of accounts in completing the assessment 6. The Learned First Appellate Authority ought to have held there was no material to hold the trade credit balances have ceased to be liability, in order to invoke section 41(1) of the Act. Rs.15,46,347/- 7. The Learned First Appellate Authority ought to have held the sundry creditors are running accounts and have cleared in subsequent years, as such the addition is not warranted. 8. The Learned First Appellate Authority erred in upholding the application of provisions of section 115BBE of the Act in the applicant's case. 9. Learned Commissioner of Income Tax (Appeals) erred in confirming levy of interest u/s 234B of the Act Rs.16,13,535 Page 3 of 5 ITA No. 527/Bang/2023 10. Learned Commissioner of Income Tax (Appeals) erred in confirming levy of interest u/s 234C of the Act Rs. 2081 Total tax effect (see note below) Rs.64,58,963/- 2. Brief facts of the case are as under: 2.1 The facts of the case are that the appellant is a partnership firm carrying on business of dealing in purchase and sale of Groundnut Seeds, Peas Dhall, etc. The appellant firm filed its return of income for the assessment year 2017-18 on 31.10.2017. The return of income was processed and later selected for scrutiny under CASS. Notices were issued u/s 143(2) and 142(1) of the Act. 2.2 During the course of assessment proceedings on perusal of the bank statement it was noticed that the assessee deposited Rs.43,96,000/-to the bank account by way of cash during demonetization period and it is seen form the audited accounts, there are sundry creditors to the extent of Rs. 47,00,308/- when the same was asked, neither any information is furnished nor explanation offered. 2.3 Since the assessee neither furnished any information nor any explanation was offered to the notices issued by the Department, the Ld.AO added Rs.43,96.000/- and Rs. 47,00,308/- to the total income of the assessee. 2.4 Assessment completed u/s 144 of the Act by an order dated 16.12.2019 determining the income at Rs.92,29,808/-. 2.5 Aggrieved by the order of the Ld.AO, assessee preferred appeal before the Ld.CIT(A). The Ld.CIT(A) dismissed the appeal of the assessee by observing as under: Page 4 of 5 ITA No. 527/Bang/2023 “4. In the instance of the case the appellant failed to make any submissions in support of grounds of appeal, this gives rise to an undisputable conclusion that the assessee has got nothing more to say in this regard. I have gone through the record before me and based on the record I have decided to adjudicate the issue on the merits of the case. In the instant case the AO has rightly made addition of Rs. 90,96,308/-. Since no compliance was received from the part of the assessee after repetitive issuance of notices by the Department. therefore, the addition made by the Assessing Officer is hereby confirmed.” 2.6 Aggrieved by the order of the Ld.CIT(A), assessee is in appeal before this Tribunal. 3. We have perused the submissions advanced by both sides in the light of records placed before us. 4. In our opinion, this is a fit case to be remitted back to the Ld.AO with the direction to the assessee to file all relevant details in respect of the issue of cash deposited during demonetisation period. The Ld.AO shall analyse the deposits based on the applicable circular issued by the CBDT in respect of the same. Ld.AO shall also verify all the details regarding the Sundry Creditors. Assessee shall file all the relevant details in respect of the same. Accordingly, both the issues are remitted to the Ld.AO for denovo consideration. 5. We note that the notice issued by this Tribunal was returned back with some comment by the postal department. However, the Ld.AR has submitted that the Ld.AO may be directed to issue notices to the following address and the email ID as recorded hereinbelow. Assessee Details Name: M/s. Swathi Trading Company Address: No. 38 .33 1 st Cross, Nayandahalli West Layout, Page 5 of 5 ITA No. 527/Bang/2023 Bangalore North, Chandra Layout, Bangalore – 560 040. Mobile No. 9972095724 Email ID: [e-mail] 6. The Ld.AO is thus directed to issue notices to the assessee to the address mentioned hereinabove. Accordingly, the grounds raised by the assessee stands allowed for statistical purposes. In the result, the appeal filed by the assessee stands allowed for statistical purposes. Order pronounced in the open court on 11 th October, 2023. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 11 th October, 2023. /MS / Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file By order Assistant Registrar, ITAT, Bangalore