C Jayasingh, Chennai V. ITO, Non Corp Ward -1(2), Chennai

ITA 608/CHNY/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 4845 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 10-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 68

Judgement Text

आयकर अपील य अ धकरण, ‘ए’ यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘A’ BENCH, CHENNAI ी वी .द ु गा राव, या यक सद य एवं ी जी. मंज ु नाथ, लेखा सद य के सम% BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER आयकर अपीलसं./I .T. A. No. 6 0 8/ Chn y/ 2 0 1 9 ( नधा रणवष / A ss e ss m en t Yea r : 2 01 1 - 12) Mr. C. Jayasingh, 68/1A, Minisha Cars, Greenways Road, R.A.Puram, Chennai-600 028. v s . The Income Tax Officer, Non-Corporate Ward-1(2) Chennai-600 034. P AN: A I BP C 4 5 0 6A (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओरसे/ Appellant by : Mr. I.Dinesh, Advocate यथ क ओर से/Respondent by : Mr. AR V.Sreenivasan, Addl.CIT स ु नवाईक तार ख/D a t e o f h e a r i n g : 30.03.2022 घोषणाक तार ख /D a t e o f P r o n o u n c e m e n t : 11.04.2022 आदेश / O R D E R PER G.MANJUNATHA, AM: This appeal filed by the assessee is directed against order of the learned Commissioner of Income Tax (Appeals)-2, Chennai, dated 29.11.2018 and pertains to assessment year 2011-12. 2. At the outset, learned AR for the assessee submitted that the appeal filed by the assessee is time barred by 35 days for which necessary petition for condonation of delay along with affidavit explaining the reasons for the delay has been filed. The AR further submitted that the assessee could not file appeal within the time allowed under the Act, due to the fact 2 ITA No. 608/Chny/2019 that the assessee fell sick due to enteric fever and Doctor advised to take rest for 6 weeks, which caused delay of 35 days. The delay in filing appeal is neither intentional nor willful, but for the unavoidable reasons, therefore, delay may be condoned in the interest of advancement of substantial justice. 3. The learned DR, on the other hand, strongly opposing condonation of delay petition filed by the assessee submitted that the reasons given by the assessee do not come within the ambit of reasonable and bonafide reasons, which can be considered for condonation of delay and hence, appeal filed by the assessee may be dismissed as not maintainable. 4. Having heard both sides and considered the petition filed by the assessee for condonation of delay, we are of the considered view that reasons given by the assessee for not filing the appeal within the time allowed under the Act comes under reasonable cause as provided under the Act for condonation of delay and hence, delay in filing of appeal is condoned and appeal filed by the assessee is admitted for adjudication. 3 ITA No. 608/Chny/2019 5. The assessee has raised following grounds of appeal:- “1. The Commissioner of Income Tax (Appeals) went wrong in confirming the addition of Rs.52,07,880/- made by the Assessing Officer invoking the provisions of Section 68 of the Income Tax Act. 2. The Commissioner of Income Tax (Appeals) went wrong in not considering the submissions made before him in the proper perspective. 3. The Commissioner of Income Tax (Appeals) went wrong in ignoring the explanation and evidences furnished in support of the credits in the Bank Accounts and ought to have therefore held that all the credits stand explained.” 6. Brief facts of the case are that the assessee is running a bakery, besides he is also engaged in the business of purchase & sale of used cars. The assessee filed his return of income for the assessment year 2011-12 on 12.02.2013 declaring total income of Rs.1,74,230/-. During the course of assessment proceedings, the Assessing Officer noticed that the assessee has made huge cash deposits in Tamil Nadu Mercantile Bank Ltd., Mount Road Branch, Chennai and Axis Bank, Velachery branch. The assessee was asked to explain source for cash 4 ITA No. 608/Chny/2019 deposits in bank account. In response, the assessee has claimed that source for cash deposits was out of loans received from friends & relatives. The Assessing Officer, however, was not convinced with explanation furnished by the assessee and according to him, the assessee could not explain source of cash deposits with necessary evidences and thus, made addition of Rs.52,07,880/- towards cash deposits found in bank account as unexplained credit u/s.68 of the Income Tax Act, 1961. The Assessing Officer had also made addition of Rs.22,30,115/- towards net profit admitted by the assessee from the business of purchase and sale of used cars. 7. Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), the assessee took different stand and argued that cash deposits found in the bank account is not out of loan received from friends & relatives, but advance received from buyers of used cars. The assessee had also made an argument that if at all, cash deposits found in bank account is treated as unexplained, then additions made by the Assessing Officer towards net profit from very same business should be deleted 5 ITA No. 608/Chny/2019 otherwise, it amounts to double deduction. The learned CIT(A), after considering relevant facts and also taken note of various facts sustained additions made by the Assessing Officer towards cash deposits found in bank accounts, however, directed the Assessing Officer to set off income of Rs.22,30,115/- offered by the assessee, out of very same cash credits found in bank accounts as his business receipts. Aggrieved by the learned CIT(A) order, the assessee is in appeal before us. 8. The learned A.R for the assessee submitted that the learned CIT(A) erred in confirming addition of Rs.52,07,880/- made by the Assessing Officer invoking provisions of section 68 of the Income Tax Act, 1961, without appreciating fact that the assessee has explained cash deposits found in bank accounts. The learned A.R for the assessee further referring to the assessment order for assessment year 2010-11 submitted that the Assessing Officer has completed assessment for the assessment year 2010-11 u/s.143(3) r.w.s. 147 of the Act, where on very same nature of cash deposits, in bank accounts has been accepted by the Assessing Officer and has estimated 6 ITA No. 608/Chny/2019 net profit of 15% on total cash deposits, therefore, a similar direction may be given to the Assessing Officer to estimate net profit from business. 9. The learned DR, on the other hand, supporting order of the learned CIT(A) submitted that the assessee could not adduce any evidence to justify its stand that he was into used car business and cash deposits found in bank accounts are out of his business receipts. Therefore, the learned CIT(A) has rightly sustained additions made by the Assessing Officer and his order should be upheld. 10. We have heard both the parties, perused material available on record and gone through orders of the authorities below. We find from orders of the lower authorities that the Assessing Officer as well as the learned CIT(A) have accepted fact that the assessee is into the business of purchase and sale of used cars. Once, the authorities have accepted fact that the assessee is into business of purchase and sale of used cars, then they must have examined claim of the assessee that cash deposits found in bank account is out of advance received from customers for sale of used cars. No doubt, the assessee has 7 ITA No. 608/Chny/2019 taken a different stand at different levels, but learned A.R for the assessee has explained reasons for taking different stand as per which, the assessee’s father was ill during the relevant time and the assessee could not explain his case before the Assessing Officer with necessary evidences. Therefore, the learned A.R for the assessee has requested to give one more opportunity of hearing to explain his case before the Assessing Officer. We find that when the authorities below does not disbelieve claim of the assessee that he was into business of purchase & sale of used cars, then they must have examined claim of the assessee that cash deposits found in bank accounts is out of advance received from customers. Since, both the authorities have failed to examine claim of the assessee, we are of the considered view that the issue needs to go back to the file of the Assessing Officer to give one more opportunity of hearing to the assessee to justify his case. Hence, we set aside order of the learned CIT(A) and restore the issue back to the file of the Assessing Officer and direct the Assessing Officer to re-examine claim of the assessee de novo in accordance with law, after affording opportunity of hearing to the assessee. 8 ITA No. 608/Chny/2019 11. In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 11 th April , 2022 Sd/- Sd/- (वी. द ु गा राव) (जी. मंज ु नाथ) (V. Durga Rao) (G.Manjunatha) $या यक सद&य /Judicial Member लेखा सद&य / Accountant Member चे$नई/Chennai, )दनांक/Dated 11 th April, 2022 DS आदेश क त+ल,प अ-े,षत/Copy to: 1. Appellant 2. Respondent 3. आयकर आय ु .त (अपील)/CIT(A) 4. आयकर आय ु .त/CIT 5. ,वभागीय त न2ध/DR 6. गाड फाईल/GF.