The assessee, Keyur Rajeshbhai Agrawal, has appealed against the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] for the assessment year 2017-18.
It was the 8th time the case was posted for hearing, and no authorized representative had appeared on behalf of the assessee.
In this case, the assessee is engaged in the distribution of Recharge coupons, Recharge vouchers, and SIM cards of Airtel Ltd. The assessee filed its income tax returns showing a total income of Rs. 4.98 lakhs.
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During the scrutiny proceedings, it was noted that there was a huge cash deposit of Rs. 1.58 crores in the assessee’s savings bank account. The assessing officer (AO) asked the assessee to explain the source of cash deposits and was asked to produce details and documents t.
It was submitted by the assessee that the cash was deposited out of the daily collection received from recharge vouchers and other allied products, namely the sale of SIM cards and recharge coupons, etc.
The assessing officer (AO) did not accept the explanation which was provided by the assessee and made an addition of Rs. 1.58 crores as unexplained cash credit. The AO, found that he had not charged the unexplained credit taxable under Section 115BBE and passed a rectification order raising an additional demand of Rs. 88.31 lakhs.
Although the assessee appealed before the CIT(A), the appeals were dismissed ex-parte as there was no response on the part of the assessee.
The ITAT noted that the assessment order treats the entire cash deposit of Rs. 1.58 crores as income without considering withdrawals or payments made to Airtel Ltd. and that it failed to acknowledge the press release dated 24-11-2016, which provided relief to SIM card and recharge coupon sellers during the demonetization period.
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The ITAT set aside the orders passed by the lower authorities and directed to give the assessee another opportunity in the interest of principles of natural justice.
The ITAT, comprising Makarand V. Mahadeokar (Accountant Member) and T.R. Senthil Kumar (Judicial Member), allowed the appeal filed by the assessee for statistical purposes.
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