DCIT circle-1, Noida V. Evergreen India mart Pvt. Ltd., Noida

ITA 6571/DEL/2019

AI Insights

The case involves the Revenue's appeal against the order of the CIT (Appeals)-I, Noida, which pertained to the Assessment Year 2014-15. The primary issue was the deletion of additions amounting to Rs.9,40,80,349 made by the AO on account of unexplained cash credits under section 68 of the Income Tax Act, 1961. The AO had initially added this amount as unexplained cash credit after the assessee failed to provide sufficient explanation for the credits in their bank account during the assessment proceedings. The CIT (A) later deleted these additions without seeking a remand report from the AO, relying on documents not previously considered by the AO. The Tribunal found this approach to be a violation of Rule 46A and remitted the issue back to the AO for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114019 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 22-02-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 06-08-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 68; 201; 44AB; 145(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘H’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.6571/Del./2019 (ASSESSMENT YEAR : 2014-15) DCIT, Circle 1, vs. Evergreen India Mart Pvt. Ltd., Noida. H – 4, Sector 9, Noida – 201 301 (Uttar Pradesh). (PAN : AACCE6452D) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Mukul Gupta, CA REVENUE BY : Shri Pramod Kumar, Sr. DR Date of Hearing : 23.02.2023 Date of Order : 23.02.2023 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the Revenue is directed against the order of ld. CIT (Appeals)-I, Noida dated 31.12.2018 pertaining to the Assessment Year 2014-15. 2. The grounds of appeal taken by the Revenue read as under :- “1. That the Ld. CIT(A) has erred in law and on facts by deleting the additions of Rs.9,40,80,349 made by the AD on account of unexplained cash credits u/s 68 of the Income Tax Act, 1961 without appreciating the fact that the assessee could not bring any material on record at the time of assessment proceedings which could justify the amount credited in the bank account of assessee during FY 2013-14. ITA No.6571/Del./2019 2 2. That the Ld CIT(A) has erred in law and on facts by deleting the additions of Rs.9,40,80,349/- made by AD on account of unexplained cash credits u/s 68 of the Income Tax Act, 1961 after holding that the books of accounts has not been rejected by the assessing officer after invoking the provisions of section 145(3) of the IT Act, 1961 without appreciating the fact that the assessing officer had not estimated profit by rejecting books of account u/s 145(3), instead the assessee was asked to submit explanation regarding credit entries in the bank account of the assessee.” 3. Brief facts of the case are that in this case, the AO noted that information was received from DCIT, Central Circle, Noida that a search & seizure operation was carried out in M/s. Tirupati Sunworld group of cases on 11.11.2014. From the information it was seen that the assessee company has given loan amounting to Rs.30,00,000/- to M/s. Sunworld City Pvt. Ltd. during FY 2013-14. However, the assessee company filed ITR for AY 2014-15 declared income of Rs.1,03,320/-. As per AO, the above amount of Rs.30,00,000/- did not commensurate with the total income of the assessee. Accordingly, assessment was reopened. AO further noted that during the assessment proceedings, the assessee has submitted the bank statement of Oriental Bank of Commerce (OBC) for only 5 days. The complete bank statement for AY 2013-14 was not submitted by the assessee. AO called for the bank statement from the said bank and from perusal thereof, it is noted that the total credit was Rs.9,40,80,349/- for AY 2013-14. AO issued show-cause notice but ITA No.6571/Del./2019 3 assessee failed to reply. In these circumstances, AO added the amount of Rs.9,40,80,349/- being the deposit found in the OBC as unexplained cash credit. 4. Against the above order, assessee appealed before the ld. CIT (A). Before the ld. CIT (A), assessee submitted Form No.3CA u/s 44AB of the Income-tax Act, 1961 (for short 'the Act') and statutory auditor’s report etc.. Referring to these reports and final accounts as on 31.03.2014, ld. CIT (A) found that the assessee has a turnover of Rs.6,17,56,106/- and against which it has booked expenses of Rs.6,16,51,158/-. He further noted that the impugned assessment order was framed u/s 143 (3). He also noted that the books of accounts have not been rejected by the AO. Hence, without asking any remand report from the AO, ld. CIT (A) accepted these submissions and documents and deleted the addition. 5. Against the above order, Revenue is in appeal before us. We have heard both the parties and perused the records. 6. We find that AO has noted that the assessee has not cooperated. Only 5 days bank statement was given. AO obtained the entire bank statement by giving notice to the bank and from there, it was noted that there was a deposit of Rs.9,40,80,349/-. Assessee was given a chance to give his submissions but the assessee did not cooperate. Ld. CIT (A), on the other hand, referred to documents not at all referred with the AO i.e. ITA No.6571/Del./2019 4 auditor’s report, Form No.3CA etc. and gave a finding that assessee has transactions in its books of accounts which justified the said bank deposit. In our considered opinion, in this case, ld. CIT (A) is relying upon additional evidences and material which were never before the AO. This is violation of Rule 46A. In these circumstances, we deem it appropriate to remit the issue to the file of AO. AO is directed to decide issue afresh in the light of the submissions and documents relied upon before the ld. CIT (A). Needless to add, assessee should be given adequate opportunity of being heard. 7. In the result, Revenue’s appeal stands allowed for statistical purposes. Order pronounced in the open court on this 23 rd day of February, 2023 after the conclusion of the hearing. SD/- SD/- (ANUBHAV SHARMA) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 23 rd day of February, 2023 TS Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A)-I, Noida. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.