PRAVIN KUMAR SONKAR,MAU V. NATIONAL FACELESS ASSESSMENT CENTRE, DELHI

ITA 55/VNS/2024

AI Insights

The case involves Pravin Kumar Sonkar, a fruit trader, who appealed against the order of the National Faceless Assessment Centre (NFAC) which had added Rs. 11,10,000 to his income for the Assessment Year 2017-18, citing unexplained cash deposits during the demonetization period. The AO had issued a notice under section 148 due to non-filing of the return and subsequently made additions based on the cash deposits and sundry creditors. The CIT (A) dismissed the appeal ex-parte, leading to the current appeal before the Tribunal. The Tribunal examined the detailed records and found that the cash deposits were consistent with the assessee's business activities and thus, the additions were deleted.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473605 (ITAT-VARANASI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Next Hearing Date: 11-09-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 10-04-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITA MEENA
• Assessee Lawyers: ASHISH BANSAL
• Section: 147

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, VARANASI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No.55/VNS/2024 (Assessment Year :2017-18) Pravin Kumar Sonkar Kasba Khas Ghosi Mirzajamalpur Ghosi, Mau-275 105 Uttar Pradesh Vs. National Faceless Assessment Centre (NFAC) Delhi PAN/GIR No.FZBPS1123M (Appellant) .. (Respondent) Assessee by Shri Ashish Bansal and Shri Subham Singh Revenue by Smt. Kavita Meena Date of Hearing 11/09/2024 Date of Pronouncement 29/11/2024 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 02/02/2024 passed by NFAC Delhi for the quantum of the assessment passed u/s 147 for the Assessment Year 2017-18. 2. At the outset there is a delay of 8 days in filing the appeal. In the petition of condonation, it has been stated that assessment order was sent on e-portal on 02/12/2024 and 60 days have expired on 02/02/2024. Assessee had already filed ITA No.55/VNS/2024 Pravin Kumar Sonkar 2 the filing fees before the due date, however, there was a communication gap between the assessee and the Counsel appointed in collecting the papers and filing the same and therefore, there was delay of 8 days. Looking to these facts that there was marginal delay of 8 days, same is condoned. 3. In the grounds of appeal assessee has challenged the validity of reopening u/s.147 and also addition on account of Rs.11,10,000/- which includes cash deposits of Rs.5,50,000/-. 4. The brief facts are that assessee is an individual who has been carrying on the bussiness of trading in fruits which are mostly perishable in nature. Ld. AO noted that there was a cash deposit of Rs.11,00,000/- during the demonetization period in SBI branch in small town of Mau. Since assessee has not filed the return of income for A.Y.2017-18, therefore, notice u/s.148 was issued on 30/01/2020. In response to the notice assessee e- filed his return of income declaring total income of Rs.5,19,790/- The ld. AO noted that assessee had made following deposits in the bank account:- Sr.No. Bank Account details Date Amount (in Rs.) 1. A/c.No.35622995466 maintained with ABI, Bhiti (Mau) Branch 08.11.2016 5,50,000 10.11.2016 2,00,000 24.11.2016 2,40,000 26.12.2016 1,20,000 TOTAL 11,10,000 ITA No.55/VNS/2024 Pravin Kumar Sonkar 3 5. The ld. Assessing Officer however, added the entire sum of deposits in the bank account of Rs.11,00,000/-, as according to him, assessee could not provide explanation with regard to nature and source of the cash deposits. Apart from that he has also noted that there were certain sundry creditors of Rs. 3,53,675, same too was added u/s.68. The ld. CIT (A) has dismissed the appeal exparte on the ground that there was no response from the side of the assessee without deciding on merits. 6. Before us ld. Counsel submitted that although ld. CIT (A) has passed an exparte order, but assessee being a small fruit vendor was not aware that the notices will be sent through email and already it took three years for ld. CIT (A) to decide the matter and therefore, he requested that appeal should be decided on merits on the basis of records available on record which was filed before the ld. AO. 7. The ld. DR did not file any objection if the appeal is decided on merits. 8. On perusal of the records and finding given in the assessment order it is seen that it is an undisputed fact that assessee was dealing in wholesale trading of fruits in the name of M/s. Maa Ambey Fruit Company and he had a Mandi license to carry on such business. The assessee has maintained bank book and cash book in regular course of business which was filed before the ld. AO alongwith reply filed in response to notice dated 12/08/2021 which was uploaded. Apart from that, assessee has ITA No.55/VNS/2024 Pravin Kumar Sonkar 4 filed details of month wise details of purchase and sales, copy of which has also been placed before us. From the perusal of the trading and profit and loss account it is seen that assessed had shown sales of Rs.2,93,99,980/- and net profit of Rs.5,19,789/-. From the perusal of the cash book and the bank book alongwith bank statement it is seen that assessee has recorded the sales and all the cash sales has been deposited in the bank account. The deposit in the bank account matches with the cash book which fact was duly brought before the ld. AO in the replies uploaded before the ld. AO. The replies alongwith annexure have also been placed in the paper book from pages 4 to131 wherein assessee has given following details:- (i) Audit Report, Balance sheet & Profit Loss Account. (ii) Bank Statement (iii) Computation of Income (iv) Month wise Purchase Ledger (v) Month wise Sales Ledger (vi) Mandi License (vii) Bank ledger in our Books (viii) Cash book (ix) Chart of consolidated cash during the year (x) Purchase Ledger 01.04.20216 to 31.03.2017 (xi) Sales Ledger 01.04.20216 to 31.03.2017 ITA No.55/VNS/2024 Pravin Kumar Sonkar 5 9. The ld. AO despite noting these details still held that the cash deposits remain unexplained. Another important fact which is to be noted that out of Rs.11,10,000/- amount of Rs.5,50,000 was deposited prior to demonetisation. Rs.5,60,000/- were deposited between 10/11/2016 to 25/12/2016 in three trenches. Thus, it cannot be said that it was only post demonetisation assessee had deposited the cash. It is further stated that the cash deposit in the bank account is a regular feature as all the purchases and sales are in cash and it corresponds with the sales register, cash book and the deposits made in the bank account. Under these circumstances, the source of cash deposits are out of assessee’s business of fruit sales and accordingly addition of Rs.11,10,000/- made by the ld. AO is deleted. 10. In so far as sundry creditors are concerned, once assessee had given the list of sundry debtors and sundry creditors and has been duly disclosed in the audited accounts, then ld. AO cannot simply add because assessee could not provide e-mail correspondence and addresses of the parties. Looking to the turnover of the assessee and the nature of business and also that assessee has duly filed a copy of ledger account of the parties, and further it is not the case that it is some old balance, therefore it cannot be held that entire sundry creditors which assessee has liability to pay is to be added as unexplained cash credit u/s.68. Accordingly, addition made by the ld. AO is deleted. ITA No.55/VNS/2024 Pravin Kumar Sonkar 6 11. In the result, appeal of the assessee is allowed. Order pronounced on 29/11/2024. Sd/- (AMIT SHUKLA) JUDICIAL MEMBER Varanasi; Dated 29/11/2024 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Varanasi 1. The Appellant 2. The Respondent. 3. The CIT(A), Varanasi. 4. CIT 5. DR, ITAT, Varanasi 6. Guard file. //True Copy// "