KEYUR RAJESHBHAI AGRAWAL,AHMEDABAD V. .ITO WARD 5(3)(1), AHMEDABAD, AHMEDABAD

ITA 978/AHD/2024

AI Insights

The case involves Keyur Rajeshbhai Agrawal, who appealed against the orders of the Income Tax Officer and the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The dispute arose from a rectification order under section 154 of the Income Tax Act, 1961, concerning the Assessment Year 2017-18. The primary issue was the addition of Rs.1,58,04,250 as unexplained cash credit due to substantial cash deposits in the assessee's bank account during the demonetization period. The assessee claimed these deposits were from daily collections of selling recharge vouchers and SIM cards, which were allegedly exempt from scrutiny as per a press release dated 24-11-2016. However, the Assessing Officer did not consider this exemption and added the amount as income, subsequently demanding additional tax. The Tribunal found that the lower authorities had not adequately considered the assessee's explanations and the relevant press release, leading to the decision to set aside the previous orders and remand the case for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474806 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 09-05-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Unexplained cash credit; Principle of natural justice; Rectification of order

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Shri T.R. Senthil Kumar, Judicial Member And Shri Makarand Vasant Mahadeokar, Accountant Member Keyur Rajeshbhai Agrawal A-11, Matrushakti Society Opp. Sales India, India Colony Road, Bapunagar, Ahmedbad-380023, Gujarat PAN: BOYPA3966G (Appellant) Vs Income Tax Officer Ward-5(3)(1), Ahmedabad (Respondent) Assessee Represented: None Revenue Represented: Shri B.P. Srivastava, Sr.D.R. Date of hearing : 05-12-2024 Date of pronouncement : 09-12-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 05.04.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the rectification order passed under section 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2017-18. ITA No. 978/Ahd/2024 Assessment Year 2017-18 I.T.A No. 978/Ahd/2024 A.Y. 2017-18 Page No Keyur Rajeshbhai Agrawal vs. ITO 2 2. Today is the 8th time of hearing of this appeal. None appeared on behalf of the assessee in spite of service of notices to the assessee and no authorization given by the assessee to any Representative. 3. Brief facts of the case is that the assessee is an individual and engaged in distribution of Recharge coupons, Recharge vouchers and SIM Card of Airtel Ltd. For the Asst. Year 2017-18 assessee filed its Return of Income on 15-10-2017 showing total income of Rs.4,98,202/-. The return was taken for scrutiny assessment. Since there was huge cash deposit of Rs.1,58,04,250/- in the Savings Bank account with Kalupur Co-op. Bank Ltd., Bapunagar during the course of demonetization period. The assessee was asked to explain the source of cash deposit in the above bank account as well as asked to produce details and documents to substantiate the claim. 4. The assessee vide its reply dated 15-11-2019 submitted that the cash was deposited out of the daily collection received from recharge vouchers and other allied products namely sale of SIM Card and recharge coupons, etc. Thus the assessee was falling in the category exempt by the Press release dated 24-11-2016 and also offered detailed explanation along with the evidences. Without considering the above explanation offered by the assessee, the A.O. treated the cash deposit as unexplained cash credit and made addition of Rs.1,58,04,250/- by passing assessment order dated 26-12-2019 and demanded tax thereon. It is thereafter, the Assessing Officer found that he has not charged the unexplained credit taxable u/s. 115BBE thereby passed a rectification order dated 21-03-2023 raising additional demand of Rs.88,31,592/-. I.T.A No. 978/Ahd/2024 A.Y. 2017-18 Page No Keyur Rajeshbhai Agrawal vs. ITO 3 5. Aggrieved against both the orders, assessee was in appeal before Ld. NFAC. The appellant’s case was fixed for hearing on 09-06-2023, 12-12-2023 and 03-01-2024, however as there was no response from the assessee, thereby both the appeals filed by the assessee were dismissed exparte. 6. Perusal of the assessment order makes it clear, the entire cash deposit of Rs.1,58,04,250/- is added as the income of the assessee before considering the withdrawals or payments made by the assessee to Airtel Ltd. Further as claimed by the assessee, the Assessing Officer is silent about the Press release dated 24-11-2016 which exempt the sellers of SIM Card and recharge coupons in depositing cash during demonetization period. Therefore in the interest of Principle of Natural Justice, the order passed by the Lower Authorities are hereby set aside with a direction to give one more opportunity of hearing to the assessee and then pass assessment order in accordance with the law. Needless to say, the assessee should cooperate by filing all relevant materials, bank statements and Press release dated 24-11-2016 before the A.O. for fresh adjudication. 7. In the result, the appeal filed by the Assessee is allowed for statistical purpose. Order pronounced in the open court on 09-12-2024 Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 09/12/2024 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- I.T.A No. 978/Ahd/2024 A.Y. 2017-18 Page No Keyur Rajeshbhai Agrawal vs. ITO 4 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 अपीलȣय अͬधकरण, अहमदाबाद "