ITO, WARD-2(3)(4), SURAT, SURAT V. SAGAR KUMAR LALLUBHAI KUKADIYA, SURAT

ITA 691/SRT/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7586 (ITAT-SURAT)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2024
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-04-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 10-10-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; Set aside
• Section: 144; 44AD; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 691/Srt/2023 (Assessment Year: 2016-17) (Physical hearing) I.T.O., Ward-2(3)(4), Surat. Vs. Sagar Kumar Lallubhai Kukadiya, D-803, Shyam Flora Height, Nr. Vanmali Park Society, Yogi Chowk, Surat-395008. PAN No. CODPK 5139 P Appellant/ Revenue Respondent/ Assessee Department represented by Shri Ravi Kant Gupta, CIT-DR Assessee represented by Shri Kamlesh Bhatt, C.A. Appeal instituted on 11/10/2023 Date of hearing 24/04/2024 Date of pronouncement 29/04/2024 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the Revenue is directed against the order of the National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) [in short, the ld. CIT(A)] dated 24/08/2023 for the Assessment Year (AY) 2016-17. Following grounds of appeal have been raised by the Revenue. “1. On the facts and circumstances of the case and in law, the ld.CIT(A) has erred in admitting additional evidences which is gross violation of the Rule 46A of the Income tax Act Rules, 1962 and makes the appellate order bad in law. 2. On the facts and circumstances of the case and in law, the ld.CIT{A) has violated the principles of natural justice while admitting the additional evidences and not providing opportunity of being heard to the Assessing Officer as per the provisions of section 250(2) of the Income tax Act, 1961 and Rule 46A(3) of the income tax Rules,1962. ITA No. 691/Srt/2023 ITO Vs Sagar Kumar Lallubhai Kukadiya 2 3. On the facts and circumstances of the case and in law, the ld.CIT(A) has erred in restricting the addition from Rs. 3,37,68,108/- to Rs. 19,59,437/- made on account of section 69A of the Act as the assessee neither in the assessment proceedings nor in the appeal proceedings produced any cogent evidences to prove that the deposits made in the Bank account pertains to his business receipts. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the contention of the assessee that the actual turnover was remained to be disclosed in return of income filed by the assessee on account of the mistake of his accountant ignoring the fact that assessee himself has verified and signed the return of income while filing. 5. On the facts and circumstances of the case and in law, the CIT(A) has erred in by ignoring the fact that the assessee has shown only turnover of Rs. 83,43,672/- in the return of income based on the bank account under question, without maintaining books of accounts as per section 44AD of the Act. 6. On the basis of the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 7. It is therefore prayed that the order of the Ld. CIT{A) may kindly be set aside and that of the Assessing Officer be restored. 8. The appellant craves leave to add, alter, amend and/or withdraw any grounds of appeal either before or during the course of hearing of the appeal.” 2. Rival submissions of both the parties have been heard and record perused. The learned Commissioner of Income Tax-Departmental Representative (ld. CIT-DR) for the revenue submits that the ld. CIT(A) while granting relief to the assessee admitted the additional evidence furnished by assessee for the first time, thus, violated the provisions of Rule 46A of Income Tax Rules, 1962 (in short, the Rules) in admitting the additional evidence without providing opportunity to the Assessing Officer. No evidence or submission was filed before the Assessing Officer to substantiate the huge cash credit in his bank account. There was more than Rs. 3.00 crores of deposits in the bank account. The ld CIT-DR for the ITA No. 691/Srt/2023 ITO Vs Sagar Kumar Lallubhai Kukadiya 3 revenue submits that the order of ld CIT(A) may be set-aside in upholding the additions made by Assessing Officer. In alternative plea the ld CIT-DR for the revenue submits that the appeal may be restored to the file of Assessing Officer to decide all the issues afresh. 3. On the other hand, the learned Authorised Representative (ld. AR) of the assessee fairly agreed that the matter may be restored to the file of Assessing Officer with liberty to the assessee to file his submission and the relevant evidences to substantiate the deposits in the bank account. 4. We have considered the rival submissions of both the parties and have gone through the orders of the lower authorities carefully. We find that the assessment was completed under Section 144 of the Income Tax Act, 1961 (in short, the Act) on 20/11/2018. The Assessing Officer while passing the assessment order, recorded that there was cash deposit of Rs. 2.59 crores and other credits by way of cheque/NEFT of Rs. 73,71,178/- in the bank account maintained by assessee with ICICI bank. The assessee was asked to furnish the source of deposit in his bank account. The Assessing Officer recorded that despite giving opportunity to the assessee, the assessee neither attended on the appointed date nor furnished any reply or sought adjournment in response to final show cause notice. The Assessing Officer made addition of aggregate of cash and other credits of Rs. 3.33 crores as unexplained money under Section 69A of the Act. On appeal, the ld. CIT(A) restricted the addition to the extent of 8% under reported transaction of ITA No. 691/Srt/2023 ITO Vs Sagar Kumar Lallubhai Kukadiya 4 Rs. 2.44 Crore and granted substantial relief to the assessee. The additions were restricted by ld CIT(A) on considering the submissions of assessee that as per ITR the total turnover is Rs. 83,43,672/- and the assessee has shown business income under section 44AD. The assessee made cash deposit on various dates of Rs. 2.59 Crore and other credits of Rs. 73.71 Lacs in his saving bank account. During assessment the assessee was unable to make submissions. The pattern of cash and other credits shows that saving bank was used for unreported business transaction. Under reported transaction is of Rs.2.44 Crore and only profit on such underreported transaction may be added. Such facts are recorded in para- 4.1 of impugned order of ld CIT(A). 5. We find that the ld CIT(A) accepted the submissions of the assessee without seeking any remand report from Assessing Officer and allowed substantial relief to the assessee in taxing 8% of alleged underreported transaction. Considering the fact that the ld. AR of the assessee fairly agreed to restore the matter back to the file of Assessing Officer and sought liberty to furnish required details, evidences and the submission before the Assessing Officer to substantiate the source of cash and other credits in the bank account of the assessee, hence, the matter is restored back to the file of Assessing Officer with direction to pass the order afresh in accordance with law. Needless to direct that before passing the order, the Assessing Officer shall grant fair and reasonable opportunity of hearing to ITA No. 691/Srt/2023 ITO Vs Sagar Kumar Lallubhai Kukadiya 5 the assessee. The assessee is also directed to be more vigilant in future and not to cause further delay and seek adjournment without any valid reason and to furnish all the details and his submissions and evidences on various grounds of appeal raised by him, as soon as possible, if so desired without any further delay. In the result, the grounds of appeal raised by the revenue are allowed for statistical purposes. 6. In the result, this appeal of revenue is allowed for statistical purposes only. Order announced in open court on 29 th April, 2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 29/04/2024 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat