SANTOSH DEVIDAS KALGHATGI,BELGAUM V. INCOME TAX OFFICER, WARD-1, BELGAUM, BELGAUM

SA 5/PAN/2025

AI Insights

The case involves Santosh Devdas Kalghatagi, who is engaged in the jewellery business and faced scrutiny under sections 143(3) r.w.s 147 and 250 of the Income Tax Act for the assessment year 2017-18. The Assessing Officer (AO) made additions to the assessee's income based on unexplained cash deposits during the demonetization period and estimated profits from the jewellery business. The CIT(A) upheld the AO's decision, leading to the appeal before the ITAT. The ITAT admitted additional evidence submitted by the assessee and restored the matter to the CIT(A) for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 37879 (ITAT-PANAJI)
• Appeal Type: Stay Application
• Pronouncement Date: 01-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMALRAJPERIYAGOUNDEN..
• Assessee Lawyers: PRAMOD VAIDHYA
• Keywords: Additional evidence
• Section: 143(3); 142(1); 250; 20

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH PANAJI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI G D PADMAHSHALI ACCOUNTANT MEMBER I T A. Nos. 21/PAN/2024 & S A.5/PAN/2025 (A.Y. 2017-18 ) Santosh Devdas Kalghatagi, 287/6,1 st floor,Saibuilding, III Cross, Shashtri Nagar, Shahapur, Belgaum-590003, Karnataka. Vs . I.T.O Ward-1, Civil Hospital Road, Belgaum-590001. Karnataka. . PAN .No. ADMPK2551R (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Assessee by Shri.Pramod Vaidhya.AR Revenue by Shri.Vimalrajperiyagounden..Sr.DR सुनवाई कȧ तारȣख/Date of Hearing 27.03.2025 घोषणा कȧ तारȣख/Date of Pronouncement 01.04.2025 ORDER PER PAVAN KUMAR GADALE, JM: The appeal is filed by the assesse against the order of the NFAC Delhi/CIT(A) passed u/sec 143(3)r.w.s147 and u/sec 250 of the Act. The assessee has raised the grounds of appeal challenging the order of the CIT(A) sustaining the additions made by the Assessing Officer. 2. The brief facts of the case are that, the assesse is engaged in the business of jewellery and notice u/sec148 of the Act was issued. Further in compliance to notice u/sec142(1) of the Act, the assesse has filed the return of 2 ITA. No. 21/PAN/2024 & SA .No.5 /PAN/2025. Santosh Devidas Kalghatagi. Belgaum income on 12.01.2018 for the A.Y.2017-18 disclosing a total income of Rs.12,82,110/-. The Assessing Officer (AO) based on the information from ITBA data, found that the assesse has made cash deposits in the bank accounts during the demonetization period and the A.O has issued notice u/sec143(2) and u/sec 142(1) of the Act and the assessee has submitted the details and information. Whereas the A.O found that the assesse has made cash deposits aggregating to Rs.21,00,500/- in the bank accounts in the F.Y.2016-17 and explanations were called to substantiate the deposits and there was no proper compliance and further the assessing officer has dealt on the jewellery business transactions and VAT returns in respect of sales and estimated profit@8% of the turnover. Finally the A.O was not satisfied with the explanations and made addition (i) income as per the provisions of section44AD of the Act of Rs.18,44,198/- and (ii) cash deposits u/sec69A of the Act of Rs19,50,100/-and assessed the total income of Rs.37,95,200/- and passed the order u/sec 143(3) r.w.s147 of the Act dated 29.09.2021. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts, findings of the AO and submissions of the assesse but has confirmed the action of the Assessing officer and dismissed the assessee 3 ITA. No. 21/PAN/2024 & SA .No.5 /PAN/2025. Santosh Devidas Kalghatagi. Belgaum appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal. 4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the A.O overlooking the facts and submissions of the assessee in the proceedings. Further the Ld.AR submitted that the assessee has a good case on merits and has filed an application for admission of the additional evidence under Rule 29 of ITAT rules. Per contra, the Ld. DR submitted that the evidences were not examined by the lower authorities and the Ld. DR supported the order of the CIT(A). 5. We heard the rival submissions and perused the material on record. The sole crux of the disputed issue that the CIT(A) has erred in confirming the addition made by the A.O. u/sec44AD and u/sec69A of the Act as the transactions are not supported with the documentary evidences. The Ld.AR emphasized that the assessee has submitted the details as called for by the authorities. The assessee is filling the application for admission of additional evidences under Rule 29 of ITAT rules with the separate statements showing RD and URD purchases during F.Y.2016-17, date wise purchase statement and sample copies of sales invoices which could not be submitted before the lower authorities. Further the evidences play a important role in decision making in the adjudicating proceedings. Therefore considering the facts, 4 ITA. No. 21/PAN/2024 & SA .No.5 /PAN/2025. Santosh Devidas Kalghatagi. Belgaum circumstances and additional evidences, the assessee should not suffer for non filing of material information, as the evidences play a vital role in decision making and we admit the additional evidence. Accordingly, to meet the ends of justice, we restore the disputed issues along with the additional evidence to the file of the CIT(A) to verify and adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of appeal. And, we allow the grounds of appeal of the assessee for statistical purposes. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. 7. S.A.No.5/PAN/2025(A,Y,2017-18). The Ld.AR submitted that the assessee has paid tax demand of Rs.7,71,630/- which is more than 20 % of total tax demand of Rs.28,58,072/- and the same is not disputed by the revenue. Further the assessing officer has issued notice u/sec226(3) of the Act dated26-02-2025 on the three bank accounts of the assessee maintained with (i) Daivadnya sahakara bank Niyamit shahapur Belagavi (ii)HDFC Bank, shahapur Belagavi and (iii)The Sankeshwar Souhard credit sahakari Ltd,kadolkar Galli,Belagavi. We considering the facts, circumstances and submissions of the both the parties are of the view that in the quantam appeal, the assessee has filed the additional evidence and 5 ITA. No. 21/PAN/2024 & SA .No.5 /PAN/2025. Santosh Devidas Kalghatagi. Belgaum was admitted and restore to the file of the CIT(A) to verify and adjudicate on merits dealt in the above Paragraphs 5&6. Further the assessee has deposited more that 20% of total tax demand, which is not disputed by the Ld.DR. Hence, we direct the assessing officer to withdraw attachment under section 226(3) of the act on the above three bank accounts of the assesse and further direct not to take any coercive action for recovery of balance tax demand and we order accordingly. Order pronounced in the open court on 01.04.2025. Sd/- Sd/- (GD PADMAHSHALI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Panaji Dated: 01/04/2025 Copy of the Order forwarded to: 1. The Appellant, 2. The Respondent 3. The CIT(A)- 4. CIT 5. DR, ITAT, 6. Guard file. //True Copy// BY ORDER, (Asstt. Registrar)ITAT, Panaji 6 ITA. No. 21/PAN/2024 & SA .No.5 /PAN/2025. Santosh Devidas Kalghatagi. Belgaum Date Initial 1. Draft dictated on PS 2. Draft placed before author PS 3. Draft proposed & placed before the second member PS 4. Draft discussed/approved by Second Member. PS 5. Approved Draft comes to the Sr.PS/PS PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Dictation Pad is enclosed "