Income Tax Officer, Ward-1(3)(1), Ahmedabad, Ahmedabad V. RAJESHKUMAR THEOPHILBHAI CHRISTIE, AHMEDABAD

ITA 965/AHD/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0761 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2024
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 15-07-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 28-11-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 144; 142(1); 133(6); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 965/Ahd/2023 (िनधाᭅरण वषᭅ िनधाᭅरण वषᭅ िनधाᭅरण वषᭅ िनधाᭅरण वषᭅ / Assess ment Year : 2017-18) In co me T ax Of fi ce r W ar d – 1( 3) (1) , Ah me da bad बनाम बनामबनाम बनाम/ V s . Raj es h ku ma r Th eo ph il bh ai C hr i sti e F- 1, De lh iw al a Bl o ck, Ga ya k wa d Ha ve li , Rai kh ad , Ah me da b ad, Gu jar at , 38 00 01 ᭭थायी लेखा सं./जीआइआर सं./P A N / G IR N o . : A K A P C 0 1 7 9 L (Appellant) . . (Respondent) अपीलाथᱮ ओर से /Appellant by : Dr. Darsi Suman Ratnam, CIT.DR ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : None D a t e o f H e a r i n g 16/07/2024 D a t e o f P r o n o u n c e m e n t 25/07/2024 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed b y the Revenue against the order of the National Faceless Appeal Centre ( NFAC), Delhi, (i n short ‘the CIT( A) ’) dated 13.10.2023 for the Assessment Year 2017-18. 2. The brief facts of the c ase a re th at an infor mation was received that the assessee had deposited cash of Rs.12,82,000/- in Develop ment C redit Bank Ltd., Vejalpur, Ah meda bad during ITA No. 965/Ahd/2023 [ITO vs. Rajeshkumar Theophilbhai Christie] A.Y. 2017-18 - 2 – the de monetization period. As no r eturn of inco me was filed b y the assessee for A.Y. 2017-18, a notice under Section 142(1) of the Act was issued by the AO on 09.03.2018 asking the assessee to file the return. There was no co mpliance to the notice. Thereafter , the AO had issued various notices to the assessee on different dates but no co mpliance was made b y the assessee during the assessment proceeding. The AO made enquiry fro m the Bank under Section 133(6) of the Act and it was found that in the bank account maintained by the assessee total credit of Rs.7,30,32,566/- including total cash deposit of Rs.23,78,505/- was appearing. The AO had also made enquiries in respect of some of the persons whose details were appearing in the bank state ment. In the absence of any co mpliance on the part of the assessee total credit of Rs.7,80,32,566/- appearing in the said bank account was considered as unexplained and added to the income u/s 69A of the Act . Acco rdingly, the assess ment was co mpleted under Section 144 of the Act on 30.11.2019 at total income of Rs .7,30,32,570/-. 3. Aggrieved with the order of the AO, the assessee had filed an appeal before t he First Appellate Authority, which has been decided by the CI T(A) vide the i mp ugned order. The Ld. CI T(A) has restricted the addition as made by the AO to Rs.3 7,91,586/- only. 4. Now, the Revenue is in appeal is before us. ITA No. 965/Ahd/2023 [ITO vs. Rajeshkumar Theophilbhai Christie] A.Y. 2017-18 - 3 – 5. The Revenue has taken the following grounds in this appeal: “1. CIT(A) has erred in sustaining only amount of Rs.37,91,586/ out of total addition made of Rs.7,30,32,570/ on account of cash deposits during demonetization period, so made u/s 69A r.w.s. 115BBE of the Act. 2. "On the facts and circumstances of the case and in law, the id CIT(A) erred in admitting additional evidences under Rule 46A of the IT. Rules, without calling for the A O's remand report on the additional evidences submitted during the appellate proceedings.” 6. Dr. Darsi Su man Ratna m, CI T.DR explained that the addition as made by the AO was res tricted by the Ld. CIT( A) on the basis of additional evidences as filed b y the assessee in the course of appeal proceeding. He sub mitted that the Ld. CI T(A) was not correct in ad mitting additional evidences under Rule 46 of the Inco me Tax Rules without calling for a re mand r eport fro m the AO. He explained that the Ld. CIT( A) had considered the submissions made before hi m for the first ti me without allowing any opportunity t o the AO. Since, no co mpliance was made b y the assessee before the AO, a re ma nd report should have been called for on the submissions and additional evidences as brought on record in the course of appeal proceeding. On mer its, the Ld. CIT- DR sub mitte d that the Ld. CIT( A) was not correct in estimating co mmi ssion income @ 2% onl y on the t urnover as appearing in the bank account of the assessee. He has drawn our attention to the enquiries made b y the AO in the course of assessment proceedings, fro m wh ich it was found that the assessee was deali ng in Board CNG Steel C ylinders. On the other hand, the Ld. C I T(A) had held that assessee was providing acco mmodation entr y and on this ba sis he has esti mat ed inco me ITA No. 965/Ahd/2023 [ITO vs. Rajeshkumar Theophilbhai Christie] A.Y. 2017-18 - 4 – @ 2% only. The Ld. CIT.DR assailed the order of the Ld. CI T( A) for changing the business model of the assessee on the basis of submissions as ma de in the appeal proceeding, without allowing any opportunity to the AO. 7. On the part of the respondent, no co mpliance was made and nobody was prese nt in the course of hearing. 8. We have carefully considered the submission of the Ld. CIT.DR and the materials available on record. It is tr ue that no co mpliance was made by the assessee in the course of assessment proceeding in spite of nu merous opportunities provided b y the AO. At the sa me ti me, the addition of Rs.7,30,32,566/- as made by the AO in respect of the entire c redit transactions appearing in the bank account of the assessee cannot be held as correct. The AO had conducted independent enquiry f ro m one S hri Kishan Sa matbhai Siju, Pr op. of M/s AFE Tr ading Compan y in the course of assess ment and it transpired therefro m that the assessee had made pa yment of Rs.83,76,698/- to Shri Kishan Sa matbhai Siju, in respect of purc hase of Board CNG Steel C ylinders. It was , thus, apparent fr o m this evidence gathered in the course of assessment that the assessee was eng aged in certain purchase and sale transactions. In view of this evidence on record, t he addition of the entire credits in the bank account can’t be held as correct . 9. The total cash deposit in the bank account of the assessee was to the extent of Rs.23,78,505/- only and addition to this ITA No. 965/Ahd/2023 [ITO vs. Rajeshkumar Theophilbhai Christie] A.Y. 2017-18 - 5 – extent was sustained by the Ld. C IT(A). So, there is n o dispute so far as this addition is concerned. On the balance turnover/ credit in the bank account of Rs.7,06,54,061/-, the Ld. CIT( A) estimated co mmission income @ 2% and sustained the addition to the extent of Rs.14,13,081/- only. This action of the Ld . CIT( A) also cannot be held as correc t. When the AO h ad brought on record the evidence that the assessee was engaged in purchase and sale transactions, the Ld. CI T(A) was not correct in giving a finding that the assessee was providing accommodation entries and thereby esti mating the income @ 2% onl y. The Ld. C IT( A) has relied upon fresh submissions and additional evidence filed by the assessee in the course of appeal proceeding for estimating the income in this manner. Ho wever, no opportunity was allowed to the AO to exa mine the fr esh evidences brought on record b y the assessee in the course of appeal proceeding. The Ld. CI T(A) has not acted in accordance with Rule 46A of the I.T. Rules and the applicability o f the conditions as stipulated in the said Rule was not exa mined. The sub mission of the assessee that he was an entry provider and associate of one Mr. Jignesh Shah, was accepted by the Ld. CIT(A) without an y verification. The Ld . CIT( A) was not correct in taking into account the evidences produced by the assessee without allowing any opportunity to the AO to exa mine and rebut the evidences and docu ments as brought on record before hi m. The matter i s, therefore, set a side to the file of the Ld. CI T(A) with a direction to call for a re mand report on the fresh submissions/evidences filed by the assessee in the ITA No. 965/Ahd/2023 [ITO vs. Rajeshkumar Theophilbhai Christie] A.Y. 2017-18 - 6 – course of the appellate proceeding. The CI T( A) s hould also consider the finding of the AO in t he course of assess ment that the assessee was engaged in purchase and sale transactions of goods and, thereaf ter, decide the mat ter afresh. 10. In the result, appe al preferr ed b y the Revenue is allowe d for statistical purposes. This Order pronounced on 25/07/2024 Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 25/07/2024 S. K. SINHA True Copy आदेश कᳱ ᮧितिलिप अᮕेिषत आदेश कᳱ ᮧितिलिप अᮕेिषतआदेश कᳱ ᮧितिलिप अᮕेिषत आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent. 3. संबंिधत आयकर आयुᲦ / Concerned CIT 4. आयकर आयुᲦ(अपील) / The CIT(A)- 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडᭅ फाईल / Guard file. आदेशानुसार आदेशानुसारआदेशानुसार आदेशानुसार/ BY ORDER, उप उपउप उप/सहायक पंजीकार सहायक पंजीकारसहायक पंजीकार सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद / ITAT, Ahmedabad