PRABHAKAR RAMAJI AKARE, NAGPUR V. INCOME TAX OFFCER, WARD 4(4), NAGPUR

ITA 65/NAG/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0056 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 09-03-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY Y. MARATHE
• Keywords: Set aside
• Section: 147; 148; 271(1)(c); 143(3); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER ITA no.65/Nag./2023 (Assessment Year : 2011–12) Prabhakar Ramaji Akare Plot no.7, Sai Nagar–1 Hudkeshwar Road, Nagpur 440 034 PAN – ASOPA4993Q ................ Appellant v/s Income Tax Officer Ward–4(4), Nagpur ................ Respondent ITA no.66/Nag./2023 (Assessment Year : 2011–12) Prabhakar Ramaji Akare Plot no.7, Sai Nagar–1 Hudkeshwar Road, Nagpur 440 034 PAN – ASOPA4993Q ................ Appellant v/s Income Tax Officer Ward–4(4), Nagpur ................ Respondent Assessee by : None Revenue by : Shri Abhay Y. Marathe Date of Hearing – 08/08/2024 Date of Order – 14/08/2024 O R D E R PER V. DURGA RAO, J.M. The present appeals have been filed by the assessee challenging the impugned orders of even date 10/01/2023, passed by the learned Prabhakar Ramaji Akare ITA no.65/Nag./2023 Page | 2 Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2011–12. 2. When the case was called for hearing, none appeared on behalf of the assessee nor was any application filed for adjournment. Therefore, the Bench was of the opinion to proceed to dispose of the appeal qua the appellant assessee and after hearing the learned Departmental Representative and the material available on record. ITA no.65/Nag./2023 Assessee’s Appeal : A.Y. 2011–12) 3. In its appeal, the assessee has raised following grounds:– “Whether on the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals) was justified in affirming addition of ` 8,00,000 by the learned Assessing Officer as unexplained cash deposits under section 69A of the Income Tax Act, 1961. 4. Facts in Brief:– The assessee is an individual and initially has not filed his return of income for the year under consideration. The Department re– opened the case under section 147 of the Income Tax Act, 1961 ("the Act") and notice under section 148 of the Act was issued and served on the assessee on 31/03/2018. In response, the assessee filed his return of income electronically on 07/07/2018, for the assessment year 2011–12, declaring total income of ` 1,56,900. On a perusal of the statement by the Assessing Officer, it was noticed that the assessee has deposited ` 8,00,000, in cash on 24/05/2010 in the Bank of India, which the assessee converted it into two fixed deposits of ` 4,00,000 each. The Assessing Officer sought explanation from the assessee and in response to which the assessee filed written Prabhakar Ramaji Akare ITA no.65/Nag./2023 Page | 3 submissions along with acknowledgment of filing of return of income, computation of income, copy of sale deed, copy of bank statement and other details, which were test checked by the Assessing Officer. The Assessing Officer, however, did not agree with the submissions of the assessee and hence, he drew following conclusion:– “1. The source of cash deposit of Rs.8,00,000/- has not been explained by the assessee. 2. The contention that the amount of Rs.8,00,000/- pertains to last 5 years income of the assessee and his wife and also from sate of agricultural land is also not acceptable on account of following reasons:- i. The period claimed by the assessee is from 2006 to 2010 i.e. more than 8 years have lapsed from the mentioned periods. Hence the claim of the assessee cannot be verified now. Moreisver the assessee had never filed any return of income. His only retur filed in response to the notice issued u/s 148 for the relevant year. Hence the genuineness of the assessee's claim is doubtful. 5. Accordingly, the Assessing Officer treated the cash deposit of ` 8,00,000, in the Bank of India as unexplained cash under section 69A and added the same to the total income for the year under consideration. The Assessing Officer also initiated penalty proceedings under section 271(1)(c) of the Act separately. Aggrieved by the quantum addition, the assessee carried the matter before the first appellate authority. 6. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee. During the course of appellate proceedings, the assessee, in response the notices issued by the learned CIT(A), filed his reply 05/01/2023. The learned CIT(A), considering the reply of the assessee, was of the view that the said reply is not relevant to the assessment order passed under Prabhakar Ramaji Akare ITA no.65/Nag./2023 Page | 4 section 143(3) r/w section 147 of the Act and, therefore, he held that the reply dated 05/01/2023, filed by the assessee is not tenable. Since the assessee did not comply with the notice and no submissions were made in support of ground of appeal. Accordingly, the learned CIT(A) dismissed the appeal of the assessee by observing as follows:– “5.1 The Hon'ble ITAT in ITA No. 1025-1027/Chandi/2005 for the A.Y. 2002- 03 in the case of M/s Chhabra Land and Housing Ltd. after following the decision of Hon'ble Supreme Court in the case of B.N. Bhattachargee, 118 ITR 461 (SC) held that the appeal does not mean merely filing of the appeal but effectively pursuing it. Keeping in view of the aforesaid factual position, the appeal filed by the appellant is, therefore, decided on merits. 6. 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 assessed an income of Rs.9,56,900/- disallowing the appellant's unexplained cash deposit u/s 69A of the Act and income from undisclosed sources. Since the appellant failed to substantiate appellant's claim and addition made by the Assessing Officer of Rs. 8,00,000/- is hereby confirmed.” The assessee being aggrieved with the order passed by the learned CIT(A), is in further appeal before the Tribunal. 7. None appeared on behalf of the assessee. 8. The learned Departmental Representative vehemently relied upon the orders passed by the lower authorities. 9. We have considered the rival submissions and perused the material available on record. The legal issue raised by the assessee is whether the addition can be made under section 69A of the Act in respect of cash deposits amounting to ` 8 lakh was deposited by the assessee during the year under Prabhakar Ramaji Akare ITA no.65/Nag./2023 Page | 5 consideration by the assessee and the same was treated as unexplained money under section 69A of the Act. As per the assessee, the sum of ` 8 lakh 24/05/2010, in the Bank of India, which the assessee converted it into two fixed deposits of ` 4 lakh each. From the record available before us, we find that the assessee had furnished all the details, as required by the Assessing Officer. Even the assessee had also furnished the details of his income and expenditure incurred and such details are reproduced below for better appreciation of facts. Particulars Period Cash Flow Income From Farming 2006–2010 (98900 @5) 494500.00 Income From Kirana 2006–2010 (100000 @5) 500000.00 Total cumulative cash 994500.00 Less: Personal House hold withdrawal 300000.00 694500.00 Add: Cash received from sale of agricultural land 200000.00 894500.00 Add: Tailoring Receipt – used in household expenses (60000@5) 300000.00 Total cash in hand (Opening) 1194500.00 10. From the above, it is clearly evident that the assessee has fulfilled the requirement of the Assessing Officer and there was no basis of making any addition by the Assessing Officer under section 69A of the Act, which was confirmed by the learned CIT(A). The assessee has offered explanation about the nature and source of acquisition of the cash which was deposited in his bank account. In view of this, we are of the considered view that there cannot be any addition under section 69A of the Act in respect of cash deposits made by the assessee into his bank account as unexplained income in the hands of Prabhakar Ramaji Akare ITA no.65/Nag./2023 Page | 6 the assessee. Consequently, we set aside the impugned order passed by the learned CIT(A) and direct the Assessing Officer to delete the addition made under section 69A. Thus, all the grounds raised by the assessee are allowed. 11. In the result, appeal filed by the assessee is allowed. ITA no.66/Nag./2023 (Assessee’s Appeal – 2011–12) 12. The appeal has been filed by the assessee challenging the impugned order dated 10/01/20232, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2010–11, levying penalty of ` 1,45,300, under section 271(1)(c) of the Act by the Assessing Officer vide order dated 27/06/2019. 13. Having heard both the parties, we find that the sole issue of imposing penalty arose out of the quantum addition made by the Assessing Officer which was confirmed by the learned CIT(A). However, when the matter travelled before us, the quantum addition was deleted by us in assessee’s appeal being ITA no.65/Nag./2023, for the assessment year 2011–12, vide order dated __________. Consequently, we hold that since the quantum addition is deleted, penalty levied on such quantum addition has no legs to stand. Accordingly, the ground of appeal raised by the assessee is allowed. Since the substratum of imposing penalty is destroyed, we refrain from adjudicating upon the merits of the case. Prabhakar Ramaji Akare ITA no.65/Nag./2023 Page | 7 14. In the result, appeal filed by the assessee is allowed. 15. To sum up, appeals filed by the assessee are allowed. Order pronounced in the open Court on 14/08/2024 Sd/- K.M. ROY ACCOUNTANT MEMBER Sd/- V. DURGA RAO JUDICIAL MEMBER NAGPUR, DATED: 14/08/2024 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur