PRAVIN KUMAR, INCOME TAX OFFICER, WARD 4(1), NEW DELHI, I.P.ESTATE, NEW DELHI V. BHASIN JEWELLERS PRIVATE LIMITED, PITAMPURA, DELHI

ITA 4856/DEL/2024

AI Insights

This case involves an appeal by the Revenue against the order of the CIT(A), which pertained to the assessment year 2017-18. The primary contention was regarding the deletion of an addition of Rs. 2,48,21,500 made under section 68 of the Income Tax Act, which was related to unexplained cash deposits during the demonetization period. The AO had initially made this addition, which was later deleted by the CIT(A). The Tribunal found that the CIT(A) had not adequately considered the procedural aspects, particularly the lack of opportunity given to the AO to examine the documents submitted by the assessee. The Tribunal also noted that the additional evidences considered by the CIT(A) were not accompanied by a proper petition under Rule 46A, nor were they sent to the AO for a remand report.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474655 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: CIT vs Sumati Dayal
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHI
• Assessee Lawyers: SURAM SINGH
• Keywords: Set aside; Additional evidence
• Section: 142(1); 143(2)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.4856/Del/2024 (ASSESSMENT YEAR 2017-18) Pravin Kumar Income Tax Officer, 4(1), New Delhi-110014. Vs. Bhasin Jewellers Private Limited, 47, Nishant Kunj, Pitampura, Delhi-110034. PAN-AABCB9364J (Appellant) (Respondent) Assessee by Shri Suram Singh, AR Department by Shri Ashish Tripathi, Sr. DR Date of Hearing 18/02/2025 Date of Pronouncement 18/02/2025 O R D E R PER MANISH AGARWAL, AM: This is an appeal filed by the Revenue against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), dated 23.08.2024 in Appeal No. CIT(A), Delhi-2/10535/2019-20 for AY 2017-18. 2. The revenue has taken following grounds of appeal: “1. Ld. CIT(A) grossly erred in facts & in law in not appreciating the test of Human probabilities in the case of assessee company as defined by Hon’ble SC in the case CIT vs Sumati Dayal and relied upon by the AO in his assessment order. 2. Ld. CIT(A) grossly erred in deleting the addition amounting to Rs. 2,48,21,500/- made u/s 68 of the Act without considering the fact that no valid explanation w.r.t. nature and source of abrupt increase in cash deposits (during demonetization) was made by the assessee. 2 ITA No.4856 /Del/2024 ITO vs Bhasin Jewellers Private Limited 3. The appellant craves leave to add, alter or amend any/ all of the ground of appeal before or during the course of the hearing of the appeal.” 3. Brief facts of the case are that assessee is a private limited company engaged in the business of trading in Gold and Diamond jewellery. The return of income was filed on 26.09.2017 declaring total income at Rs. 22,25,160/-. The assessment was taken up for scrutiny by way of issue of notice u/s 143(2) of the Act. The assessment was completed vide order dt. 31.12.2019 passed u/s 143(3) at a total income of RS 8,00,69,908/- by making additions of Rs. 2,48,21,500/- on account of cash deposit in bank during demonetization and further of Rs. 5,30,23,248/- made on account of adjustments as per ICDS. In first appeal, vide impugned order, ld. CIT(A) has partly allowed the appeal of the assessee where the ld. CIT(A) has deleted the additions made towards cash deposited in bank during demonetization and direct the AO to make verification of certain facts in respect to addition on account of adjustments due to ICDS. Aggrieved from the said order of ld. CIT(A), revenue is in appeal before us wherein the revenue has challenged the deletion of addition of Rs. 2,24,21,500/- and other issue if not challenged. 4. At the outset, from the perusal of the records we find that during the course of the assessment proceedings assessee has not made compliance to the notice issued u/s 142(1) dt. 23-12-2019 which is reproduced at pages 3-4 of assessment order. Thereafter final show cause was issued on 27/12/2019, which is reproduced 3 ITA No.4856 /Del/2024 ITO vs Bhasin Jewellers Private Limited at pages 4-6 of the assessment order. In response to the said show cause notice, assessee vide letter dt. 29.12.2019 had filed the details like purchases bills, stock register, confirmation of certain parties etc., the copy of the said reply is at pages 1 to 5 of the paper book. From the perusal of the order of CIT(A), we find that assessee vide reply dt. 20.3.2020, as reproduced in the CIT(A) order, a table is given according to which majority of details to establish the genuineness of the source of cash deposited in the bank during demonetization were filed on 28/12/2019 and 29/12/2019 however, the AO has not referred any such details claimed by the assessee to have been filed on 28/12/2019. Besides, from the perusal of the paper book filed by the assessee, we find that Item at Sl. No. 10 and 12 as appearing in Paper book index of the assessee were filed before the CIT(A). At Sl. N0. 10 the appellant filed affidavits of the directors and employees of the appellant confirming the fact that they were present in shop on 08/11/2016 onwards till midnight. At sl.no. 12, appellant filed the copies of VAT returns challans. These documents admittedly were not filed before the AO and were filed for the first time before the ld. CIT(A) however, no petition was filed U/R 46A for the admission of same being additional evidences filed before the CIT(A). 5. It is thus clear that majority of the crucial details such as purchases register, stock register etc. regarding source of cash deposited in bank during demonetization were filed by the assessee on 28-29/12/2019 before the AO when the time barring 4 ITA No.4856 /Del/2024 ITO vs Bhasin Jewellers Private Limited limit is almost reached i.e. 31.12.2019, the AO was not in the position to verify all these documents in such a short period of time and finally he passed the assessment order on 31/12/2019. It appears that while deciding the appeal of the assessee, ld. CIT(A) has not appreciated this aspect and allowed the relief to the assessee by presuming that the AO has gone through all the details filed by the assessee during the course of assessment proceedings. Further the ld. CIT(A) has considered the addional evidences as referred above, though no prayer U/R 46A was filed by assessee nor they were sent to AO for remand report. It is a case where no reasonable and sufficient opportunity was given to the AO. In view of these facts in our opinion in the instant case, the AO was deprived of sufficient opportunity to examine the details filed by the assessee. Therefore, in the interest of justice and fair play, we set aside the order of CIT(A) and send the matter back to the file of AO with the directions that CIT(A) send all the material filed by the assessee to the AO who after examining the same, submit a report to the ld. CIT(A) and thereafter ld. CIT(A) would pass the order as per law. At the same time assessee is at liberty to file further details, if required. We are also live to the issue that ld. CIT(A) has given directions of making certain verification with respect to other addition made on account of adjustment as per ICDS but since the revenue has not challenged these findings of ld. CIT(A) before us, thus we are not interfering in the same and the AO is directed to follow the directions of ld. CIT(A) on that 5 ITA No.4856 /Del/2024 ITO vs Bhasin Jewellers Private Limited issue. Accordingly, both the grounds of appeal of revenue are allowed for statistical purposes. 6. In the result, of the revenue is allowed for statistical purposes. Order is pronounced in open court on 18/02/2025. Sd/- Sd/- (MAHAVIR SINGH) (MANISH AGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 18/02/2025 PK/Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "