KARLE CHANNEGOWDA SHAMANNA,HASSAN V. INCOME TAX OFFICER, CIRCLE 1, HASSAN

ITA 2553/BANG/2024

AI Insights

The case involves Karle Channegowda Shamanna, a civil contractor, who appealed against the order of the ld. CIT(A) which affirmed the assessment made by the Assessing Officer (AO) for the assessment year 2017-18. The AO had rejected the books of accounts of the assessee and applied a net profit rate of 8% after observing a substantial cash deposit during the demonetization period. The ld. CIT(A) upheld the AO's decision without providing independent findings. The Tribunal found that the ld. CIT(A) did not adhere to the procedural requirements of section 250(6) of the Act, leading to the restoration of the matter for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652907 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALUSAMY N
• Assessee Lawyers: PRANAY SHARMA
• Keywords: Rejection of books of accounts
• Section: 194C

Judgement Text

"ITA No.2553/Bang/2024 Karle Channegowda Shamanna, Hassan IN THE INCOME TAX APPELLATE TRIBUNAL “A’’ BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER ITA No.2553/Bang/2024 Assessment Year: 2017-18 Karle Channegowda Shamanna Karle Village KattayaHobli Hassan District Hassan 573 120 Karnataka PAN NO : BFIPS2255F Vs. ACIT Circle1 Hassan APPELLANT RESPONDENT Appellant by : Sri Pranay Sharma, A.R. Respondent by : Sri Balusamy N, D.R. Date of Hearing : 18.06.2025 Date of Pronouncement : 19.06.2025 O R D E R PER PRAKASH CHAND YADAV, JUDICIAL MEMBER: Present appeal of the assessee is arising from the order of ld. CIT(A) dated 28.10.2024 having DIN & Order No.ITBA/NFAC/S/250/2024-25/1069985491(1) and relates to assessment year 2017-18 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”). 2. Brief facts of the case as coming out from the orders of authorities below are that the assessee is a civil contractor. It had filed its return of income on 19.1.2018 declaring total income of Rs.25,76,080/-. Thereafter, the case of the assessee was selected for scrutiny to verity the receipts u/s 194C and 194J of the Act. During the course of assessment proceedings, the AO observed that the ITA No.2553/Bang/2024 Karle Channegowda Shamanna, Hassan Page 2 of 3 assessee has deposited an amount of Rs.45,99,100/- in cash with his bank account during the period of demonetization. Replying the source of the cash, assessee filed his submissions along with one cash flow statement drawn as per the books of the assessee. Dissatisfied with the reply of the assessee, the AO rejected the books of accounts of the assessee and then applied a net profit rate of 8% and computed the income of the assessee afresh. The AO has also added the amount of cash deposited during the period of demonetization accepting the source of Rs 5 lakhs only. 3. Aggrieved with the order of AO, the assessee preferred an appeal before the ld. CIT(A) and made submissions. The ld. CIT(A) after reproducing the written submissions of the assessee affirmed the order of AO without assigning any cogent reason. In other words, the CIT(A) has passed the order, without recording any independent findings with respect to the contentions raised by the assessee before the ld. CIT(A). 4. Aggrieved with the order of ld. CIT(A), the assessee has come up in appeal before us. 5. At the outset, ld. Counsel for the assessee craved for one more opportunity before the ld CIT(A) and made a request to the bench that the ld. CIT(A) may be directed to decide the matter in accordance with law. 6. Ld. D.R. relied upon the orders of authorities below. 7. After considering the arguments of both sides and appreciating the orders of authorities below, we are of the firm opinion that this matter requires fresh consideration at the end of ld. CIT(A). The perusal of order of ld. CIT(A) at para 3 would show that there is ITA No.2553/Bang/2024 Karle Channegowda Shamanna, Hassan Page 3 of 3 absolutely no independent finding of the Ld CIT(A) vis-à-vis the contentions of the assessee raised before the CIT(A). Therefore, the ld. CIT(A) has not followed the mandate of section 250(6) of the Act. Considering the totality of the facts, we restore this matter to the file of ld. CIT(A) to pass a fresh order after considering the contentions as well as appreciating the evidence produced by assessee before him. 8. In the result, appeal of the assessee stands allowed for statistical purposes. Order pronounced in the open court on 19th June, 2025 Sd/- (Prashant Maharishi) Vice President Sd/- (Prakash Chand Yadav) Judicial Member Bangalore, Dated 19th June, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "