KAUSHIK NARSINHBHAI RAGVANI,AHMEDABAD V. ITO, WARD 2(2)(2), AHMEDABAD

ITA 2144/AHD/2024

AI Insights

The appeals ITA No. 2143/Ahd/2024 and ITA No. 2144/Ahd/2024 were filed by Kaushik Narsinhbhai Ragvani against the orders of the National Faceless Appeal Centre (NFAC), Delhi, for the assessment years 2012-13 and 2013-14 respectively. The primary contention in these appeals was the legality and correctness of the additions made by the Assessing Officer (AO) and upheld by the CIT(A). The additions pertained to unexplained cash deposits and expenses which the assessee argued were from explained sources. The Tribunal noted procedural lapses in the handling of the appeals by the CIT(A), particularly the failure to provide a proper hearing and the opportunity to present additional evidence, leading to the decision to remand the cases for re-evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396938 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B.P. SRIVASTAVA
• Keywords: Opportunity of being heard; Additional evidence; Principle of natural justice
• Section: 147; 148; 144; 69C; 28; 10

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member Kaushik Narsinhbhai Ragvani, 24, Manu Panchal Society, Nr. Navdeep Flat, Nava Vadaj PAN: ADTPR5692R (Appellant) Vs The ITO, Ward-2(2)(2) Ahmedabad (Respondent) Assessee by: None Revenue by: Shri B.P. Srivastava, Sr. D.R. Date of hearing : 06-05-2025 Date of pronouncement : 30-05-2025 आदेश/ORDER Per Suchitra Kamble, Judicial Member: These two appeals are filed against the order dated 10- 06-2024 and 28-05-2024 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment years 2012-13 and 2013-14. 2. The grounds of appeals are as under:- ITA No. 2143/Ahd/2024 A.Y. 2012-13 “1.1 The order passed u/s 250 on 10 06.2024 for A.Y. 2012-13 by NFAC, Delhi upholding the addition of Rs.60,000 made by AO is wholly illegal, unlawful and against the principles of natural justice. ITA Nos. 2143 & 2144/Ahd/2024 Assessment Year 2012-13 & 2013-14 I.T.A Nos. 2143 & 2144/Ahd/2024 Kaushik Narsinhbhai Ragvani, A.Y. 2012-13 & 2013-14 2 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the eccentric facts and evidence available with regard to the impugned additions. 1.3 The Ld. CIT(A) has grievously erred in law and on facts in not carrying out any inquiry with regard to the applicability of the provisions of Income tax Act and thereby violated the principle of natural justice. Therefore, the appellant shall be granted opportunity to produce additional evidences. 2.1 The Ld. CIT(A) has grievously erred in law and on facts in not considering fully and properly that the cash deposit of Rs.60,000/- was out of the cash withdrawal from the same bank account, which was already accepted and held as explained by the CIT(A) while deleting addition under section 69C. 2.2 The Ld. CIT(A) has grievously erred in law and on facts in confirming the addition of Rs.60,000/- under section 69A of the Act despite clear evidence that it originated from explained cash withdrawals from the appellant's own bank account. 2.3 The Ld. CIT(A) failed to consider that confirmation of addition under section 69A for cash deposits, while simultaneously accepting explanation for cash withdrawals under section 690 from the same account, leads to inconsistent and contradictory findings. 2.4 It is therefore prayed that the addition of Rs. 60,000/- made by the AO and upheld by the Ld. CIT(A) may please be deleted in the interest of natural justice considering the facts and circumstances of the case. 3.1 The Ld. CIT(A) has grievously erred in law and or on facts in not granting opportunity of being heard through video conferencing. 3.2 That in the facts and / in the law, the Ld. CIT(A) has failed to appreciate that granting opportunity of video conferencing is mandatory in the newly introduced faceless appeal proceedings. It is therefore prayed that the disallowance/ addition made by Ld AO and upheld by the CIT(A) may please be deleted in the interest of natural justice and considering the eccentric facts of the case.” ITA No. 2144/Ahd/2024 A.Y. 2013-14 “1.1 The order passed u/s 250 on 28 05 2024 for A.Y. 2013-14 by CIT(A)-NFAC, Delhi upholding the additions of Rs. 24,74,000/- and Rs.8,42,000/- made by AO is wholly illegal, unlawful and against the principles of natural justice. I.T.A Nos. 2143 & 2144/Ahd/2024 Kaushik Narsinhbhai Ragvani, A.Y. 2012-13 & 2013-14 3 1.2 The Ld CIT(A) has grievously erred in law and or on facts in not considering fully and properly the eccentric facts and evidence available with regard to the impugned additions. 1.3 The Ld CIT(A) has grievously erred in law and on facts in not carrying out any inquiry with regard to the applicability of the provisions of Income tax Act and thereby violated the principle of natural justice. Therefore, the appellant shall be granted opportunity to produce additional evidences. 2.1 The Ld. CIT(A) has grievously erred in law and facts in confirming the addition of Rs.24,74,000/- under section 69C when the appellant has clearly demonstrated that the withdrawals were made for payment of labour expenses and staff salaries which is evident from the audited books of accounts. 2.2 That the Ld CIT(A) failed to appreciate that the appellants construction business where substantial cash payments are required to be made for labour and site expenses and the withdrawals were made from a properly documented bank account. 3.1 The Ld. CITIA) has grievously erred in law and facts in confirming the addition of Rs.8,42,000/- under section 69A despite clear evidence that these deposits originated from the same bank account where withdrawals were already made and explained. 3.2 The Ld. CIT(A) ought to have appreciated that when the source of cash withdrawals has been explained as being for business purposes the partial redeposit of such withdrawn amount cannot be treated as unexplained money under section 69A. 3.3 The Ld CIT(A) has failed to appreciate that confirmation of both the additions - the withdrawals under section 69C and the deposits under section 69A from the same bank account leads to double addition of the same money, which is not permissible in law. 4.1 The Ld CITIA) has grievously erred in law and or on facts in net granting opportunity of being heard through video conferencing. 4.2 That in the facts and in the law, the Ld. CIT(A) has failed to appreciate that granting opportunity of video conferencing is mandatory in the newly introduced faceless appeal proceedings. I.T.A Nos. 2143 & 2144/Ahd/2024 Kaushik Narsinhbhai Ragvani, A.Y. 2012-13 & 2013-14 4 It is therefore prayed that both the additions of Rs 24,74,000/- and Rs 8,42,000/- made by the AO and upheld by the Ld CIT(A) may please be deleted in the interest of natural justice considering the facts and circumstances of the case.” 3. We are taking up the assessment year 2012-13 as both the appeals are identical. The assessee filed return of income for assessment year 2012-13 on 09-06-2012 declaring total income of Rs. 4,87,964/-. The assessee is in the business of contracts labour work. The Assessing Officer observed that bank account held with Kalupur Commercial Bank by the assessee. There was cash withdrawal from the account to the extent of Rs. 63,36,000/- was run by the assessee. After recording the reasons and obtaining approval of the Pr. CIT, the provisions u/s. 147 of the Act were initiated and notice u/s. 148 was issued on 25-03-2019. The assessee has not filed return of income in response to notice u/s. 148 of the Act. Subsequently, statutory notices was issued to the assessee but the same was not responded as mentioned in para 4 of the assessment order, therefore, the Assessing Officer passed assessment order dated 28-10-2019 u/s. 144 r.w.s. 147 of the Act thereby making addition of Rs. 60,53,000/- treating the labour expenses as unexplained expenses and also addition of Rs. 60,000/- u/s. 69A treating the same as unexplained money related to cash deposit. 4. Aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. I.T.A Nos. 2143 & 2144/Ahd/2024 Kaushik Narsinhbhai Ragvani, A.Y. 2012-13 & 2013-14 5 5. At the time of hearing, none appeared on behalf of the assessee despite giving notice. Therefore, proceedings on the basis of assessment order and the order of the CIT(A). There is a delay of 111 days in filing the present appeal which seems to be explained by the assessee in From 36 filed us and hence delay is condoned. 6. The ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. We have heard ld. D.R. and perused all the relevant material available on record. It is pertinent to note as per ground nos. 1.3 and 3.1, it was seen that the CIT(A) has not given the proper opportunity of hearing to the assessee and has also not granted any opportunity to produce the additional evidences to prove the assessee’s case. Therefore, it will be appropriate to remand back this matter to the file of the CIT(A) for proper adjudication of the issues on merit after verifying the evidences produced by the assessee. The assessee be given opportunity of hearing by following principles of natural justice. Thus, ITA No. 2343/Ahd/2024 is partly allowed for statistical purpose. 8. As regards ITA No. 2144/Ahd/2024 for assessment year 2013-14, the same is identical and hence the same is also remanded back to the file of the CIT(A) for proper adjudication of the issues on merit after taking cognizance of the evidences filed by the assessee. Thus, ITA No. 2144/Ahd/2024 is partly allowed for statistical purpose. I.T.A Nos. 2143 & 2144/Ahd/2024 Kaushik Narsinhbhai Ragvani, A.Y. 2012-13 & 2013-14 6 9. In the result, both the appeals are partly allowed for statistical purpose. Order pronounced in the open court on 30-05-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 30/05/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "