SANJAY AGARWAL,SIKKIM V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3(2), GANGTOK, GANGTOK

ITA 1179/KOL/2023

AI Insights

The case involves Sanjay Agarwal, a resident of Sikkim, whose income tax return was not filed for the assessment year 2017-18 despite substantial cash deposits in his bank accounts during the demonetization period. The AO added Rs. 3,86,96,491 as unexplained cash credit under section 69A of the Income Tax Act and an additional Rs. 43,90,684 as estimated net profit. The CIT(A) partly allowed the appeal by deleting the addition related to estimated net profit but confirmed the addition of unexplained cash credit. The Tribunal, after reviewing the submissions and documents presented, decided to remand the case back to the AO for a detailed examination of the new evidence provided.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 469692 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Unexplained cash credit
• Section: 142(1); 69A; 139

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “डी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH: KOLKATA Įी राजेश क ुमार, लेखा सटèय एवं Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय क े सम¢ [Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member] I.T.A. No. 1179/Kol/2023 Assessment Year: 2017-18 Sanjay Agarwal (PAN: AOQPA 1650 N) Vs. ACIT, Circle-3(2), Gangtok Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 16.01.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 03.02.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से Shri Miraj D Shah, A.R For the revenue / राजèव कȧ ओर से Shri Arun Kanti Dutta, Addl. CIT Sr. DR ORDER / आदेश Per Pradip Kumar Choubey, JM: This is the appeal preferred by the assessee against order of Commissioner of Income Tax (Appeal)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)] dated 31.08.2023 for AY 2017-18. 2. Brief facts of the case of the assessee are that the assessee is a domicile of Sikkim, his case has been selected for scrutiny on the basis of data and information gathered as the assessee has deposited substantial cash in bank account during the demonetization period but did not file income tax return. The notice u/s 142(1) issued 2 I.T.A. No. 1179/Kol/2023 Assessment Year: 2017-18 Sanjay Agarwal the assessee failed to furnish return of income either u/s 139 and failed to furnish income tax return in response to notice u/s 142(1) of the Act. The assessee though not responded initially but submitted only written replies along with VAT return, work orders but failed to submit complete details as asked by the AO, as a result of which, the AO completed the assessment proceedings by making the addition to the tune of Rs. 3,86,96,491/- as an unexplained cash credit and further added Rs. 43,90,684/- on the estimated net profit for an amount of Rs. 54,83,552/- @ 8%. 3. Aggrieved by this order, the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been partly allowed as the addition as net profit of Rs. 43,90,684/- @ 8% of total turnover directed to delete but confirmed the addition of Rs. 3,86,96,491/- u/s 69A of the Act. Being aggrieved and dissatisfied the assessee preferred an appeal before us. 4. The Ld. Counsel instead of arguing the merit of the case has only submitted that AO as well as Ld. CIT(A) has added an amount of Rs. 3,86,96,491/- u/s 69A that the assessee failed to submit the bank accounts, book of account to prove or establish the same. The ld. Counsel before us filed papers with respect to the deposit of money in the banks during that period. The prayer of the Ld. Counsel of the assessee is that the matter be sent back before the AO to verify the same. 5. Contrary to that, the Ld. D.R supports the impugned order but did not raise any objection in sending the case record back to the file of AO. 6. We have perused the order passed by the AO as well as Ld. CIT(A). The AO in its order has held that in response the assessee had submitted details of cash withdrawals and few more bank accounts, one more opportunity was provided to furnish compete details of all its bank account with specific mention to furnish to provide audited books of account with cash book. It has also been mentioned that the assessee has merely submitted VAT returns and certain claims and failed to support satisfactory explanation with respect to entire amount of excess credit. The Ld. CIT(A) has also in its order held 3 I.T.A. No. 1179/Kol/2023 Assessment Year: 2017-18 Sanjay Agarwal that the assessee failed to submit any explanation with regard to the source of the amount of Rs. 3,86,96,491/- and he dismissed the appeal of the assessee by holding that it is on the assessee to prove the money which was found in his bank account but the assessee failed to discharge his burden. 7. Before us, the Ld. Counsel for the assessee has filed following papers: i) Deposit details in State Bank of India A/c from 1st April, 2016 to 31st March, 2017 ii) SBI Sanjay Agarwal Saving Bank Account total received a/c no. 11018779915 from 1st April, 2016 to 31st March, 2017 iii) Total deposit in Axis Bank a/c no. 112010100241311 from 1st April, 2016 to 31st March, 2017 iv) Total deposit in SBS a/c no. 2811199142900297 from 1st April, 2016 to 31st March, 2017 v) Total deposit in Canara Bank a/c no. 3332101002013 from 1st April, 2016 to 31st March, 2017 vi) Total deposit in Canara Bank a/c no. 3332214000004 from 1st April, 2016 to 31st March, 2017 vii) Residential Certificate issued by the Office of the District Collector, East District, Gangtok dated 12.02.2018 along with Secondary Examination admit card viii) Certificate issued from Energy & Power Department, Govt. of Sikkim, Gangtok ix) Trade license issued by Gangtok Municipal Corporation, Deorali, Sikkim x) Memo issued from Energy & Power Department, Govt. of Sikkim xi) Memo issued from Energy & Power Department, Govt. of Sikkim 4 I.T.A. No. 1179/Kol/2023 Assessment Year: 2017-18 Sanjay Agarwal 8. Going over the order passed by the AO as well as the Ld. CIT(A) and the paper filed before us, the interest of justice demands to give an opportunity to the assessee to place his case before the AO. Accordingly, the order passed by the AO confirmed by the Ld. CIT(A) is hereby set aside, the appeal of the assessee is restored into the file of the AO with a direction to verify the transaction of the assessee by going over the documents filed by him and pass an order afresh without being prejudice to this order. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order is pronounced in the open court on 3rd February, 2025 Sd/- Sd/- (Rajesh Kumar/राजेश क ुमार) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 3rd February, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Sanjay Agarwal, Singtam Choti Bank, Sikkim-737134 2. Respondent – ACIT, Circle-3(2), Gangtok 3. Ld. CIT(A)-NFAC, Delhi 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "