SANJAY KUMAR JAISWAL,GHAZIPUR V. INCOME TAX OFFICER, WARD - 3(5), GHAZIPUR

ITA 59/VNS/2024

AI Insights

The case involves Sanjay Kumar Jaysawal, who appealed against the order of the CIT(A) confirming an addition of Rs.32,06,400 to his income for the assessment year 2011-12, under section 40A(3) of the Income Tax Act, due to cash payments exceeding Rs.20,000 for purchase of mobile handsets. The original assessment was reopened based on an audit report indicating these cash payments. The assessee contested the addition, claiming compliance with section 40A(3), but failed to provide necessary documents during the remand proceedings. The Tribunal, noting the lack of original assessment records and documents from both parties, estimated a lesser addition of Rs.1,00,000.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473609 (ITAT-VARANASI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-09-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 16-04-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA MEENA
• Assessee Lawyers: O.P. SHUKLA; AWADHESH DUBEY
• Keywords: Set aside; Assessment record
• Section: 148; 40A(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH (SMC), VARANASI BEFORE: SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA No.59/VNS/2024 (Assessment Year :2011-12) Sanjay Kumar Jaysawal S/o. Shiv Shanker Jayswal Gauspur, Gauspur Mohammadabad Ghazipur- 233 001 Uttar Pradesh Vs. Income Tax Officer Ward-3(5) Ghazipur PAN/GIR No.AEUPJ3176J (Appellant) .. (Respondent) Assessee by Shri O.P. Shukla, Adv. & Shri. Awadhesh Dubey, Adv. Revenue by Smt. Kavita Meena, Sr. DR Date of Hearing 12/09/2024 Date of Pronouncement 09/10/2024 आदेश / O R D E R PER B.R. BASKARAN (A.M): The assessee has filed this appeal challenging the order dated 29-02-2024 passed by Ld CIT(A), NFAC, Delhi and it relates to the assessment year 2011-12. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the addition of Rs.32,06,400/- made u/s 40A(3) of the Act. 2. The facts relating to the above said issue are discussed in brief. The assessee is engaged in the business of purchase and sale of mobile handsets under the name and style M/s S.S. Agency.The original assessment was completed for the year under consideration on 28-02-2014 determining the total ITA No.59/VNS/2024 Sanjay Kumar Jaiswal 2 income at Rs.2,85,250/-. Subsequently, the audit party found out that the assessee has made cash payments aggregating to Rs.32,06,400/- for purchase of mobile handsets in excess of Rs.20,000/- in violation of provisions of sec.40A(3) of the Act. The assessee had purchased goods from M/s Luxmi Communication. Based on the above said information, the AO formed belief about escapement of income and accordingly reopened the assessment by issuing notice u/s 148 of the Act on 27-03-2018. Since the assessee did not comply with the notices, the AO completed the assessment to the best of his judgement by making addition of above said amount of Rs.32,06,400/-. 3. Before Ld CIT(A), the assessee contended that the AO has made the above said addition without providing the material on which the above said addition was made. The assessee also challenged the validity of reopening of assessment. Hence Ld CIT(A) called for a remand report from the AO. The assessing officer stated in the remand report that the original case records were not available. In the remand proceedings, the AO called for ledger account copy of the assessee from M/s Luxmi Communications. Though the proprietor of M/s Luxmi Communication attended the office of the AO, yet he did not furnish any document to the AO. Accordingly, the AO reported that the addition made u/s 40A(3) of the Act should be sustained. Even though the assessee contended that it did not violate the provisions of sec.40A(3) of the Act, yet the Ld CIT(A) confirmed the addition. ITA No.59/VNS/2024 Sanjay Kumar Jaiswal 3 4. I heard the parties and perused the record. The original assessment in the hands of the assessee was completed on 28-02-2014. The AO has reopened the assessment on the basis of audit report, as per which there was cash payments to the tune of Rs.32,06,400/- in violation of sec.40A(3) of the Act. It is the submission of the assessee that all the details were furnished before the AO during the course of original assessment proceedings and there is no violation of sec.40A(3) of the Act. However, the AO has placed reliance on the report given by audit report. It is not clear as to how the audit team got those details. In the remand report, the AO has stated that the original assessment records were not available. Neither the assessee nor the supplier M/s Luxmi Communication has given the ledger account copies. Hence, I notice that the correctness of information given by the audit party could not be examined by the AO.As noticed earlier, the assessee has also not furnished the ledger account copy of Luxmi communications in order to substantiate his contentions that there was no violation of sec.40A(3) of the Act. In the absence of any evidence supporting the stand of both the parties, I am of the view that this issue may be put to rest by estimating the addition to be made u/s 40A(3) of the Act. Accordingly, I estimate the amount of addition for violating the provisions of sec.40A(3) of the Act at Rupees One lakh. Accordingly, I set aside the order passed by Ld CIT(A) on this issue and direct the AO to sustain addition to the extent of Rs.1.00 lakh. (Rupees One lakh) only. ITA No.59/VNS/2024 Sanjay Kumar Jaiswal 4 5. In the result, the appeal filed by the assessee is partly allowed. Order pronounced on 09/10/2024 by way of proper mentioning in the notice board. Sd/- (B.R. BASKARAN) ACCOUNTANT MEMBER Varanasi; Dated 09/10/2024 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// "